15 January 2025
Since August 1, 2022, employers in the Netherlands must comply with the Transparent and Predictable Working Conditions Act.
This law ensures that employees have better insight into their employment terms, allowing them to make more informed decisions. It also encourages employers to offer fulltime contracts or permanent employment agreements. Under the Act, employees can request to convert their fixed-term contract into a contract for an indefinite period
A recent case before the Limburg District Court involved an employee who had started a fixed-term contract on November 9, 2021. The contract was renewed twice, reaching the legal maximum number of consecutive fixed-term contracts. The last contract was set to end on August 8, 2023. At that point, the employer had to either offer a permanent contract or let the employment end.
On June 20, 2023, during the term of the final fixed-term contract, the employee formally requested in writing to convert their contract into a permanent one.
On July 7, 2023—just over a month before the end date of the fixed-term contract—the employer informed the employee in writing that their contract would not be renewed, allowing it to automatically end on August 8, 2023. However, the employee argued that the termination was not legally valid, referring to the Transparent and Predictable Working Conditions Act, which is intended to provide employees with greater job security.
Under the Flexible Working Act, employees can request their fixed-term contracts to be converted into permanent ones. Employers with more than ten employees must respond in writing and provide reasons within one month of the employee’s request. For employers with fewer than ten employees, the deadline is three months.
If the employer does not respond within the specified timeframe, the contract is automatically adjusted in line with the employee’s request—for example, converting a fixed-term agreement into a permanent one.
The court ruled in favor of the employee. The employer, who had more than ten employees, failed to provide a timely and motivated response to the employee’s request. Consequently, the contract was automatically converted into a permanent agreement as of July 20, 2023.
In this case, the employer argued that the company could not accommodate another permanent position and stated that the notice of non-renewal should be considered an implicit response to the employee’s request. The employer had earlier sent the employee such a notification of non-renewal of the contract.
The court rejected this argument. A notice of non-renewal does not constitute a motivated response to a request for a permanent contract. Additionally, the employer did not respond within the required one-month period, rendering the company’s operational constraints irrelevant.
This case demonstrates that the law enables employees to request a permanent contract, and if the employer fails to respond on time, the request is automatically granted. A permanent employment agreement is then established. To avoid the automatic granting of the employee’s request for a permanent contract, employers are advised to evaluate such requests promptly and provide a written, well-reasoned response to either approve or reject the request.
Do you need advice on a similar matter or want to learn more about the Transparent and Predictable Working Conditions Act? Feel free to contact us for assistance.
This article was originally published in HR Rendement.
