Particularly amongst the older generation, a permanent job is still the ultimate goal. However, there are now more than 1 million self-employed people in the Netherlands – whether or not they have been somewhat forced into this situation by (economic) circumstances. Many young people are used to working as agency workers or on temporary contracts. And they don’t always see that as a problem. After all, a temporary contract gives you flexibility; it gives you freedom: work for a while, travel for a while or just relax.
Fixed-term employment contract
A fixed-term employment contract is an employment contract entered into for a specific period. When entering into a fixed-term employment contract, a specific date is agreed upon at which the contract will end. It then ends automatically by operation of law. A contract of indefinite duration does not contain an end date, except in the case of reaching state pension age.
Since 1 January 2015, employers have been required to provide, in the case of a fixed-term employment contract with a duration of 6 months or more, a duty to give notice. No later than one month before the end of the term, the employer must inform the employee whether or not the employment contract will be renewed. If no notice is given, or if it is given too late, the fixed-term employment contract will still end by operation of law on the end date specified in the contract. In that case, however, the employee is entitled to compensation.
Long-term fixed-term employment contract
A fixed-term employment contract often lasts a few months. One-year contracts are also quite common. However, it is also possible to enter into a fixed-term employment contract for a period of, say, 4 or 5 years.
In that case, a permanent employment contract will not be created after two years. This rule applies where there is a chain of fixed-term employment contracts. Under the chain provision, an employer may not enter into more than three fixed-term contracts. Furthermore, the chain may not last longer than 24 months. Upon the fourth fixed-term contract, or once the 24-month period has been exceeded, a permanent employment contract is automatically created.
However, a long-term fixed-term contract is merely a single contract, not a chain of contracts. Exceeding the 24-month term therefore does not result in the creation of a permanent employment contract.
Transitional job
Such a long-term fixed-term employment contract is also referred to as interim role. This is of interest to employees who do not wish to commit themselves for such a long period. The advantage for the employer is that a contract lasting 4 or 5 years would keep employees on their toes. After all, with the end of their contract in sight, employees would make a greater effort to maintain a strong position in the labour market. They would then have a good reason to keep their knowledge and skills up to date – or, better still, to develop them further.
Suitable?
Of course, a long-term temporary contract is by no means the right solution in every situation. But employees may need one. And for employers, it can be a useful part of workforce planning, as they continue to seek the right mix of permanent and flexible staff.