Employment Update Netherlands February 07

13 February 2007

Stella Evers

New legislation

Child Care: Legislation providing for a new financing regime for child care came into force on 1 January 2007. Employers’ required contributions to the state social security system for each of their employees has been increased. This contribution is due with respect to all employees and is not dependent on employees actually having children who require child care. All working parents with children requiring child care are now entitled to a state contribution, consisting of both a fixed and income-dependent sum. The new system is intended to replace any voluntary schemes existing within an employer’s businesses. Employers that currently operate voluntary schemes are required to amend them in line with the changes. Companies are still at liberty to grant additional allowances for child care to their employees.

Working hours: New legislation relating to working hours will come into force on 1 April 2007. This new legislation provides for a reduction of the large number of mandatory rules. The new legislation provides employers with greater flexibility to negotiate suitable arrangements with employees and/or their representatives. Existing arrangements in collective bargaining agreements will remain in force until their expiry or until 1 January 2008, whichever is the earlier.

Employment conditions (workplace): From 1 January 2007 new workplace health and safety legislation came into force. The legislation reduces the number of existing rules and regulations and thus allows employers to develop policies suitable to their places of work.

Case update

Employer liable for damages due to employee “burn-out”: In a recent case an employee claimed damages from his employer, stating that he had suffered from burn-out syndrome due to prolonged exposure to excessive stress at work. The cantonal judge appointed a medical expert who found that the burn-out syndrome was work-related. The employer was unable to demonstrate that he had taken sufficient measures to prevent the health problem resulting from the working conditions. As a consequence, the cantonal judge awarded damages to the employee.

Slip of the pen in competition clause: In another recent case an employment contract contained a non-compete clause in which the Dutch word “niet” (meaning “not”) was missing. Literal interpretation of the provision therefore led to the employee not being bound by any prohibition to compete. The cantonal court decided that the statutory provisions which require non-compete clauses to be agreed in writing do not allow for courts to ‘repair’ incomplete wording if this would be detrimental to an employee. The consequence of the omission therefore was that the employee was considered not to be bound by any prohibition to compete.