What does the Dutch Law about a balanced job market entail?
In 2021, 61% of total employment in the Netherlands was part-time; for women, this was 78% in that same year (Worldbank, 2022). Thus, it is no surprise that the Netherlands has extensive laws surrounding the job market. The government frequently updates the country's laws to ensure that both employees and employers are protected from unemployment. But what does this labour law exactly state, and what effort does the government make to keep the job market in balance?
The ‘law on the labour market in balance’, in Dutch often referred to as 'WAB' (Wet Arbeid in Balans). The law aims to have a balance between flexible and permanent labour. The following are some of the most critical aspects of the Law mentioned by the Dutch government (Rijksoverheid, n.d.):
Unemployment premium: employers in the Netherlands pay a monthly premium so that when their employee loses their job, the government can give them unemployment benefit. With the WAB, employers pay less of a premium if the employee has a permanent position. This is to stimulate employers to offer more permanent contracts.
Transition fee: in the Law on the labour market balance, it is also stated that employers must pay a transition fee to fired employees from the first day of work onwards. This is also the case when the employee is fired during probation.
On-call employees: employees that work on an on-call basis need to be informed four days before their shift if they need to work. They are not obligated to come in if they are told after this period. Moreover, after 12 months of being an on-call employee, the employer must offer a permanent contract with a certain amount of working hours.
Chain rule: the chain law states that employers have a maximum of part-time contracts they can offer their employees. In three years, the employer can submit a maximum of three contracts. After the third, the employee automatically has the right to a permanent contract.
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Are you thinking of (re)locating your business? The Netherlands is a great country to establish your company. Because labour laws are extensive, employees and employers are well protected, providing a safe environment for companies to grow. However, moving to a new country can be challenging, and local laws and regulations, a different language, and another culture could make it a little more complicated. Thus, it is advisable to have support so you can focus on your business.
Q-Business Support has a team of multilingual, highly skilled professionals dedicated to supporting you in implementing your business in the Netherlands. They create solutions tailored to their client's needs, enabling them to focus on what matters: their business. With over 25 years of international experience, Q-Business Support has been able to support companies with corporate services, accounting and financial reporting and compliance.