Starting your own company? Top 6 tips for employment contracts

Part of this process includes hiring staff. Below you will find the top six tips to keep in mind when offering an employment contract.

1. Collective labour agreement

A collective labour agreement (CLA) often contains agreements about the duration of the employment contract, the minimum salary, the number of vacation days, working hours, end-of-year benefits etc. Some CLA’s apply by definition to the employment relationship, regardless of whether the parties have specifically agreed to this in the employment contract.

Tip: Always check first if your company is covered by a collective labour agreement.

2. The duration of the employment contract

You can offer an employment contract for a fixed period (temporary) or for an indefinite duration. Both options have advantages and disadvantages. A major difference is, for example, that a temporary employment contract ends by operation of law at the end of the period. An employment contract for an indefinite period, on the other hand, only ends after the intervention of the judge or the UWV. However, shortages in the labour market can also make it strategically smarter to offer an open-ended contract.

Furthermore, it is good to know that parties can choose themselves whether a temporary employment contract may be terminated prematurely or not. In the latter case, both parties are bound by the entire contract duration.

Tip: Consider for yourself the advantages and disadvantages between an employment contract for an indefinite one for a fixed period, and decide what best suits your company.

3. Job description

I often see that an employment contract only contains the function of the employee. This can cause problems later on, if the employee does not perform well. For instance, a discussion could arise about the precise content of the job, and what is expected of the employee.

Tip: Give a precise description of the employee’s position in the employment contract.

4. Trial period

A trial period (probationary period) can be included in the employment contract. There are rules attached to this. The trial period must be the same for both parties. The trial period of an employment contract for an indefinite period may not exceed two months. The same applies to a temporary employment contract if it lasts two years or longer. If the temporary employment contract is shorter than two years, only a trial period of a maximum of one month may be included. A trial period may not be included if the temporary employment contract lasts six months or less.

Please note: if these rules are not followed, then the trial period is invalid and you cannot invoke it. It is however possible to deviate from these rules based on a collective labour agreement.

Tip: if the employment contract is extended and the employee starts to perform a new position that clearly requires different skills, you can include a new probationary period. A judge does test this strictly.

5. Non-competition and relationship clause

Many employers want to prevent an employee from moving to a competitor or going to work directly for a client after the employment has ended.

Please note: a non-competition and/or relationship clause in a temporary employment contract is in principle not valid. This may be different if you properly substantiate in the employment contract why a non-competition clause is required for that specific position. A non-competition / relationship clause in an employment contract for an indefinite period is in principle valid. Don’t forget to include a (reasonable) penalty clause.

Tip: If you include a non-competition clause and relationship clause in a temporary employment contract, justify the underlying reason comprehensively.

6. Help with drawing up an employment contract

Would you like to know what else is important? Or do you need help with drafting an employment contract? I would be pleased to assist you. Above, I have briefly mentioned a number of things that often go wrong in practice or about which questions are asked. Obviously, more is involved when drawing up an employment contract.

Because we use different model agreements, I can prepare your employment contract at a competitive rate. It is also possible to provide customised work when the situation requires it. I can also advise you on this.

I would like, together with you, to jointly consider the best approach for your company. Do not hesitate to contact me without obligation!

Tip: Contact us. Call +31 (0)70 3615048 or submit our online contact form.