The obligation to give notice means that the employer informs the employee in writing, at least one month before the fixed-term contract ends, whether the contract will be extended and, if so, under what conditions.

Exceptions to the obligation to give notice

The obligation to give notice only applies to fixed-term contracts where the end date is already fixed. For example, the obligation to give notice does not apply to an employment contract entered into for the duration of a project, where the employment contract does not end on a particular (already fixed) calendar date. Nor does the obligation to give notice apply to employment contracts that last less than six months and to temporary agency contracts with a temporary agency clause.

Penalty

If the employer does not fulfil the obligation to give notice, the employer owes the employee compensation in lieu of notice of not more than one month’s salary.

But what if the employment contract does not have a clause stating that it will automatically continue if it ends? Has the employer complied with the obligation to notify in that case? No. This is also apparent from a ruling by the sub-district court in Limburg dated 23-10-2017, ECLI:NL:RBLIM:2017:10269.

Case

In this case, the employer entered into an employment contract with the employee for one year, effective from 1 June 2016 and with an end date on 31 May 2017. The employment contract included the following:

“The employer confirms, in the context of Article 7:668(1)(a) and b of the Dutch Civil Code, that the employment contract will not automatically be continued when it comes to an end. The employer thus complies with the obligation to notify. The employee is therefore no longer entitled to continued payment of salary or compensation after the end date of this employment contract.”

On 5 May 2017, the employee asked the employer by email what was going to happen with his employment contract. The employer never responded to this. A few days later, on 10 May 2017, the employer verbally indicated to the employee that the employment contract would be converted into an indefinite employment contract. On 24 May 2017, the parties signed a new employment contract.

One month later, the employee resigned and asked for compensation in lieu of notice. According to the employee, the employer had not complied with the obligation to give notice. The employer contradicted this, stating that the employment contract stipulated that at the end of the contract it would not be automatically continued. According to the employer, this meant that it had complied with the obligation to give notice.

The findings

The court found that by signing a fixed-term employment contract, the parties had accepted that it would end on 31 May 2017. The notice clause contained in the employment contract is a revocable offer. For example, at the latest one month before the contract of employment ends, the employer could have revoked, in writing, the end of the contract of employment. The employer’s verbal notice of 10 May 2017 is not meaningful, because the notice must be given in writing.

Conclusion

The sub-district court, therefore, considered that the employer had not complied with the obligation to give notice. The employer should have informed the employee in writing before 1 May 2017 about the continuation of the employment contract. Since the obligation to give notice had not been fulfilled, the employer owed the employee compensation in lieu of notice of not more than one month’s salary.

Advice

Employers should, therefore, inform employees in writing one month before the end of the employment contract entered into for a duration of longer than 6 months, whether it will be continued, and if so, under what conditions. This prevents the employee from successfully invoking compensation in lieu of notice.

Do you have any questions about the obligation to give notice? Then contact Arbeidsrecht Amsterdam on 020-3584207 or fill out the contact form.

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