Successive terms of employment

Under the Dutch Civil Code, an employer may only offer three fixed-term employment contracts for a period totalling a maximum of 36 months. This rule also applies to successive employment contracts between an employee and various employers who, with regard to the work involved, should reasonably be deemed to succeed one another. This is, however, conditional upon the fact that under the new contract the skills and responsibilities required are the same as for the previous contract. A standard example is the situation in which a person, firstly as a temporary worker and then as an employee on an employment contract, does (practically) the same work for the same company. The provisions regarding "successive terms of employment" are in principle intended to prevent abuse and to protect the employee. In the case law, opinions differ as to the scope of successive terms of employment. It contains many examples of a broad interpretation, as well as of a more restrictive interpretation of successive terms of employment.

An example of a broad interpretation is the so-called Boekenvoordeel judgment. The Dutch Supreme Court decided in this case that the newly offered fixed term contracts of employees who lost their jobs due to an insolvency of the company, were included in the "chain" [keten] of contracts from the insolvent employer, because the relaunched company is deemed to be a "successive employer".

However, in its Van Tuinen judgment, the Dutch Supreme Court recently narrowed this interpretation by concurring with the case law on trial periods. Any new employer (the Van Tuinen judgment concerned the transfer of a concession for taxi services) that has not had any "link" with the former employer, now seems to have no reason to fear "successive terms of employment" and can negotiate a "new" contract with the employees freely and flexibly without being stuck to the "chain" passed on by the previous employer. Van Tuinen was of the opinion that "successive terms of employment" applied, and therefore he believed that his new contract, offered by the next concession holder, was one for an indefinite period. Unfortunately for him, however, that didn't wash. After all, the previous employer and the new one had nothing to do with each other except for the fact that they were rivals, which brought the Supreme Court to decide that they were not successive employers.

The Dutch Supreme Court's decision in this case is a particular relief for organisations involved in procurement. What it means for "relaunched" companies has yet to become clear in practice.

Employers faced with the issue of "successive terms of employment" must therefore pay attention to two aspects: 1) whether the work in involved has remained (practically) the same and also 2) whether there is a link between the new employer and the former one. If there is no link (which link does exist between, for example, a relaunched company and the employer within the group as a whole), the employer will not be impeded by the anti-abuse provision and can freely offer the employee a new and flexible contract.