You’ve decided to hire staff for your business. This means you have considered the type of employee you need, if you can afford it, if your workplace is safe and accessible for staff, and you know your responsibilities as an employer. After having recruited someone, it is highly advisable that both parties sign a written agreement for this employment, containing all terms and conditions of the working relationship. 

In this article we list different types of contracts, the most important terms and conditions that a contract should include and other things to keep in mind when writing an employment agreement.  

We will elaborate more on working hours and termination of contracts in a future newsletter.

Is a contract really necessary? 

Yes, because it defines all duties, responsibilities, rights and benefits that come with the job. It also protects both parties and provides a form of stability for the foreseeable future. Verbal agreements are technically also legally binding but can be hard to prove. If you want to avoid any discussion and misinterpretation, be crystal clear about the terms and conditions and put them in writing. Make it easy for yourself: Once you have a good contract template set up, you can use it as a starting point for all your future employments. 

Legally binding terms and conditions

A contract being legally binding means that there are consequences for breaking it (for both parties!). But as an employer you can’t just make up all your own terms and conditions. Both employer and employee must at all times comply with the regulations stated in the Labor Law (Arbeidswet BES 2000). If a topic is not mentioned in the contract or it differs from the law on that matter, it’s what’s stated in the law that counts in the end.

What to include and what to leave out?

You can include terms and conditions that are not particularly stated in the law (or only as a rough guideline) as long as they are not in violation with the law. Such terms are legally binding once agreed upon.

You can choose to leave out certain terms and conditions because they are stated elsewhere, such as in the labour law, a collective agreement (like trade unions of staff associations), a company handbook or your house rules. It is the employer’s duty to make sure the employee knows about and understands these documents. Therefore, it is wise to refer to them in the contract. A company handbook is legally binding when approved and stamped by the Court of First Instance (Gerecht van Eerste Aanleg) and when a copy is given to Labour Office.

You can leave terms unmentioned in the contract because they are implied and mutually assumed (or common sense, so to speak). For example, a valid driver’s license is needed for a truck driver’s position and stealing from the employer is not allowed.

Information that every contract should include:

• Full name of both employer and employee
• Job title or description of the work
• Job location
• Starting date and ending date
• Type of contract
• Probation period and conditions*
• Notice period*
• Number of working hours and days per week*
• How much and how often the employee gets paid
• Sick pay and procedures*
• Other paid leave (e.g. vacation and maternity leave)*
• Other benefits and obligations (e.g. job vehicle, working clothes or uniform, severance pay)
• Reference to the applicable law(s)

If applicable:

• Pension arrangement or plan
• Confidentially clause
• Non-compete-clause

* The law is very specific about these topics. Make sure you comply with it.

Types of contracts

There are different types of employment agreements. We’ve listed the most common ones below.

Temporary or fixed-term contract

The name speaks for itself: this contract has a specific duration, such as 6 or 12 months. The employer has the right to extend or terminate the contract after this period, keeping in mind a certain notice period. he needs to inform the employer about this decision usually at least one month in advance. A temporary contract can be extended 2 times (or passing 36 months); after that, the employee has the right to a permanent contract.

The notice period is the period during which the employee continues to work after resigning or being informed that the contract will not be extended. This gives the other party time to make any necessary arrangements. The minimum notice period by law is one month but may be longer depending on the company and the employee’s length of service. The employee must serve the notice period, unless exempted or mutually agreed otherwise.

Permanent contract

A permanent contract has no set expiration date and continues until one of the parties decides to terminate it or by mutual agreement.

Flexible or part-time contract

The employee only works when he is needed. This way, his worked hours may vary per week or per month. It is advised to agree upon an hourly or daily wage and a minimum and/or maximum number of hours per week. Only when an employee works less than 8 hours per week, you could call it a ‘zero-hour-agreement’. Similar to a temporary contract, the agreement has a specific end date and can only be extended 3 times (or last 36 months in total) before the employee has the right to a permanent contract.

Did you know?

• An employer is obliged to pay the employee at least 3 hours when he is called in to work, even when he worked less than 3 hours.

• An employer does not have to pay overtime to an employee as long as his working hours don’t exceed the maximum of 40 hours per week.

• An employer is not allowed to ask employees about their health conditions nor religion (or pregnancy), during the recruitment process nor the employment.

Keep a clear administration

Try to keep a clear overview and administration of all your personnel files and contracts. Keep them together, up-to-date, and save them digitally. Set reminders in your calendar one or two months before contracts end (depending on the notice you agreed upon). This way, you won’t forget to review the employment in time and inform the employee about either the termination or the renewal of the agreement. 

For advice, please contact your local social affairs department (SZW) or a legal counsel. 

Disclaimer

We would like to inform you that the contents of our articles (including any legal contributionas) are for non-binding informational purposes only and do not in any way constitute legal or financial advice. It is not intended to replace individual and binding advice from e.g. a lawyer or an accountant that addresses your specific situation.