Employment contract check

You are about to enter into an employment contract. What do you need to check? Is the agreement sufficiently recorded? And are the terms legally valid?

As a member you may contact our advisers free of charge. They can assess whether you have been offered a fair contract. Below are some tips on the topics that are usually dealt with in an employment contract.

Is a Collective Labour Agreement (CAO) applicable

First of all, check whether a CAO applies to the employment contract. If it does, it will usually be included in the employment contract itself. Read the CAO carefully and check the employment contract against the CAO. Rules agreed upon in the CAO apply to all employees and do not need to be included separately in the employment contract.

Fixed term or indefinite term

The duration of the contract must be clearly defined. A contract for an indefinite period of time offers the employee the most security, but nowadays many employers prefer a temporary contract for an initial, probationary period.

A fixed-term employment contract must clearly state when the employment contract will end. This can be stated as or defined by :

• A date
• A specified period (for the duration of one year).
• A description of the project to be completed.
• The date of return of an identified, sick employee.

The law states that an employer and employee may conclude a maximum of three consecutive temporary employment contracts. The fourth consecutive temporary agreement is deemed an employment contract for an indefinite period of time by operation of law. If the consecutive temporary contracts taken together are for a period longer than 36 months, an employment contract for an indefinite period will also be implied by operation of law.

**Please note **: that some collective agreements contain deviating arrangements, for example, that an employer may conclude more or fewer consecutive temporary employment contracts before such contracts are converted to a permanent contract.

Position, number of working hours, location and salary

These are the essentials of an employment contract. It must, of course, be clearly agreed what position you will occupy, for how many hours per week, at what salary, and where the work will usually be carried out. There should be no misunderstandings about this. Regarding the position, it is often additionally stipulated that the employer can assign other tasks if necessary. And regarding working hours and salary it is often stated whether or not there will be an overtime allowance and how this will apply.

Probationary period

A probationary period is a common clause in an employment contract. The law sets requirements for such a clause, namely:

• The probationary period must be agreed in writing and of equal length for both parties.
• The probationary period for an employment contract of less than two years may not exceed one month.
• And in case of an employment contract of more than two years, a maximum of two months.

Period of notice

The duration of the notice period is regulated by law. For the employee, the period of notice is always one month. For the employer, the notice period increases with the duration of the employment contract.

• If employment contract has run less than 5 years, the notice period is 1 month.
• For employment contracts that have run between 5 and 10 years, the notice period is 2 months.
• For employment contracts that have run between 10 and 15 years, the notice period is 3 months.
• And for employment contracts that have run longer than 15 years, the notice period is 4 months.

You can agree a different notice period with your employer, but the notice period applying to notice given by the employer must then be twice as long as the period of notice to be given by the employee.

A CAO may also stipulate notice periods that deviate from the law. If your company falls under a CAO such deviating notice periods will apply.

Pension

An employer may often have a standard pension scheme with a pension fund or insurer, which is non-negotiable and applies to all employees. This is covered in the employment contract. And it can be a complicated subject. Developing some familiarity with this aspect is advisable. Especially as regards the question of who pays the pension premium. (This is usually done together, according to a stated employer/employee split.) It is also important to know whether it is a defined benefit or defined contribution system. Under the first, the level of the pension benefit is more or less agreed and with the second, only the level of the pension contribution is agreed, while the level of the pension benefit is more uncertain.

Holiday leave

The statutory minimum is four times the number of workdays per week. For a full-time employee, the statutory minimum is therefore 20 days. It is often agreed in the CAO or the individual employment contract that extra days off are granted on top of the statutory leave days.

Non-competition clause + penalty clause

Employers often insist on such a clause being agreed, but for employees it can be a serious obstacle when changing jobs if they are not allowed to work in the same sector or for similar companies. Employees should therefore be well aware that by signing a non-competition clause they are severely disadvantaging themselves, also with regard to the penalty clauses which often apply when an ex-employee goes to work for a more or less competitive business.

This list of topics and accompanying explanations is, of course, far from complete. Moreover, many variations are possible, depending on the wishes of the parties. A thorough knowledge of labour law is necessary for drafting a sound employment contract. Well drafted and clear employment contracts prevent unnecessary problems and disputes. VHP2 can advise you on this.