When employing local staff for your business activities in the Netherlands such employment relationships are usually governed by Dutch labor law. Even if you specifically choose another country's law in your employment contract, certain mandatory Dutch law provisions that protect the employee will nevertheless apply to the contractual relationship between you and your employee(s).
Therefore, the best strategy to adopt is folllowing the rules of Dutch labor law as closely as possible in areas such as recruiting and dismissing personnel, employee participation in management decisions, employment conditions and minimum wage provisions.
The first step to avoiding problems is using the right type of employment contract in each specific situation. Apart from the frequently used Contract for an Indefinite Period, it may be that other contract types recognized by Dutch labor law such as a Contract for a Fixed Period, a Projects-related Contract or a Free-lance Contract will suit your specific business situation better.
Regardless of which contract type is chosen, the importance of using a well drafted employment contract which conforms to the dictates of Dutch labor law cannot be neglected. One of the most common pitfalls foreign businessmen create for themselves is to insist on using their standard employment contract with Dutch staff, not realizing that many of its clauses will be unenforceable under controlling Dutch labor law. Therefore, in order to avoid surprises, you need to make sure that all relevant aspects of the employment relationship such as Job Description, Duration, Trial Period, Remuneration, Non-Competition, Confidentiality, Inventions and Copyright Provisions and Termination have been properly addressed within the Dutch legal context.
Finally, in case you need to dismiss one or more employees it is mandatory to strictly follow the proper procedures with either the Regional Labor Market Agency ("Regionaal Bestuur voor de Arbeidsvoorziening" or "RBA") or the Dutch court ("kantonrechter") in order to limit the termination costs to the minimum.
