Working outside the Netherlands
According to the ‘European regulation on contractual obligations’ the applicable law for an employment contract is the law of the country in which the employee usually works.
This rule will still apply even if the employment contract states that the law of a different country is applicable, and irrespective of whether the employee is temporarily assigned to another country, for example, an employee usually works in the Netherlands but undertakes several business trips abroad every year.
Working in various countries
If, due to an employee working regularly in more than one country, it is not possible to identify in which country the employee usually works (for example when an employee works 50% of the time in the Netherlands and 50% of the time in Germany) then, the law of the country in which the employer is located will be applicable.
However, the two aforementioned rules will not apply if it can be shown that, taking all circumstances into account, the employment is clearly more closely connected to another country. This is the so-called ‘expat clause’ for temporary assignments and something you must be aware of when dealing with any contractual issues, especially dismissal.
An example in practice
A UK employee is assigned to the Netherlands for two years. The letter of assignment includes specific expat conditions such as repatriation to the UK at the end of the assignment, a housing allowance and UK social security and pension entitlements.
The inclusion of such conditions could result in the employment being construed as ‘more closely connected’ to the UK. Consequently UK law will be applicable to the contract and would remain so during the employee’s assignment in the Netherlands.
It is not always easy to determine whether an employee ‘usually’ or ‘temporarily’ works in a certain country. It is also difficult to identify which circumstances will lead to the conclusion that the contract is ‘clearly more closely connected’ to another country.
Tips for expats
Be aware that your employer should respect Dutch and international law even though your contract may state otherwise.
Do not sign an employment contract before obtaining legal advice from an expert.
Do not sign any termination agreement before obtaining advice from an expert and contact a lawyer as soon as your employer mentions that they intend to dismiss you.