Terms of employment & contracts

Salary, position, working hours, bonuses, holidays, pension: there are countless subjects which an employer and employee have to reach agreement on. Some agreements will apply for the duration of the employment contract, while others continue to have effect after termination of the employment contract, such as a non-compete/business relations clause or a confidentiality clause.

How should these agreements be laid down in an employment contract? Can you depart from a collective labour agreement? And can you still change these agreements?

Additional agreements – individual employment contract

There is room for customisation within the framework of the law and any applicable collective labour agreement. If special interests are at stake within an organisation, additional agreements may be made on, for example, the diplomas or certificates required, longer notice periods, variable staff conditions, sick leave and recovery reporting, study costs, social media policy, etc.

Tailor-made employment contracts

Our specialists will be happy to help you with advice and/or a model agreement that will do justice to your situation. Do you have doubts about your current employment contracts or the applicable regulations? We can screen them and adapt them (where necessary) to current legislation and to your wishes.

Collective Labour Agreement (CAO)

The majority of employees still have to deal directly or indirectly with a CAO. A CAO lays down important agreements on employment conditions such as wages, bonuses, payment of overtime, working hours, probationary period and notice period.

Are you bound or not bound by a CAO?

Do you know if a CAO applies to your situation and what is regulated by it? Practice shows that it is not always clear to those concerned whether or not they are bound by a collective agreement. This can have far-reaching consequences.

Interpretation

It is not always clear whether a collective agreement applies. In addition, there is often discussion about the interpretation of individual CAO provisions. An incorrect interpretation can have far-reaching consequences. In such a case specialist legal knowledge is often required.

Non-compete and business relations clauses

Employees and employers sometimes underestimate the effect of the non-compete clause. If a non-compete clause has been agreed in writing in an employment contract for an indefinite period, the employee is, in principle, bound by it.

Breaching such a clause can have unpleasant consequences for the employee, particularly if a penalty is attached to the breach. Under certain circumstances, the new employer may also be blamed for the breach. There are, however, ways of restricting this clause in whole or in part through legal action.

Flexible employment relationships

How can you hire a self-employed person and prevent them from being regarded as an employee afterwards? Clients are (rightly) cautious because of the risks such as continued payment of wages during illness, payroll taxes, pension participation, protection against dismissal, or severance pay for a supposed contractor.

Clear agreement

Anyone wishing to outsource work on the basis of a contract for services must ensure that the contract is sound. What names or terms the parties use in the agreement to refer to each other (e.g. ‘contractor’, ‘self-employed person’ or ‘freelancer’) is not decisive. It is much more important that the agreement is formulated in such a way that it is clear that it does not constitute an employment contract.

What distinguishes a contractor from an employee?

What matters most is the actual performance. Contractors are free to determine how they carry out their work. Thy use their own materials. They may, under certain conditions, be replaced by others. Contractors are not paid during holidays and illness. They bear entrepreneurial risks and must pay VAT.

In short, anyone who actually treats a contractor as a third party will avoid a court or other authority ruling afterwards that the actual performance points to an employment contract.

Assessment of Employment Relationships (Deregulation) Act

Under this Act (to be revised), client and contractor can shape their employment relationship using special model contracts. This allows them to obtain clarity from the Tax and Customs Administration in advance. In addition, individual agreements that suit the situation can still be made.

Directors under the articles of association

Directors under the articles of association have both a corporate and employment law relationship with the company. A double legal relationship, therefore, which can lead to complex situations and a lack of clarity about what should prevail and when.

Our employment lawyers and corporate lawyers provide advice and assistance with regard to:

  • Appointment and dismissal of directors under the articles of association
  • Management agreement
  • Remuneration issues and the Standards for Remuneration Act (WNT)
  • Pension
  • Fair remuneration
  • Occupational disability
  • Management and accountability
  • Management and Supervision Act (WBT)
  • Directors and Major Shareholders (Insurance Obligation) Designation Regulations

Pension

Not every employer is obliged to offer pensions to their employees. Nevertheless, about three quarters of the working population participate in a pension scheme.

In several sectors, such as the public sector, healthcare, construction, transport and retail, it is often a matter of mandatory pension participation in an industry-wide pension fund. A company can also have its own pension fund, or conclude a pension scheme with a pension insurer or a premium pension institution.

The parties concerned

There are three parties involved: the pension provider, the employee and the employer. The employer concludes the pension agreement with the employee. The pension provider enters into an administration agreement with the employer in order to fulfil the pension commitment. And the employee accrues, has accrued, or will accrue pension at some point.

Difficult issues

There have been many changes in pension law, resulting in the Pension Agreement and the Future Pensions Act in 2020. As an employment condition, pension gives rise to many, sometimes difficult, issues that may lead to amendment of the pension agreements. But apart from that, it may be said that pension is an important and costly employment condition, and therefore worthy of attention.

Experience in pension law

Hekkelman lawyers have experience in dealing with pension issues such as:

  • Mandatory participation in sectoral pension funds
  • Exemption procedures
  • Contribution disputes
  • Pension aspects of corporate takeovers
  • Pension and privatisation
  • Disability pension
  • Pension and hired personnel (e.g. self-employed and temporary workers)
  • Care and information obligations for employers and pension providers
  • The pension agreement and its implementation in legislation and regulations
  • Conditions for pension participation
  • Modification of the pension plan
  • Pension and dismissal
  • Early retirement, continued employment after retirement and senior staff  schemes

Want to know more?

Our specialist lawyers provide advice on a wide range of employment matters. If you have any questions, please feel free to contact us. We will be happy to help you.