In many industries, it is difficult to find new staff. One solution can be found in retaining or hiring retired employees. Can these retired employees be offered a fixed-term contract?
Six contracts in four years is allowed
Under the chain-contract rule (Section 7:668a of the Dutch Civil Code), a maximum of three employment contracts may be entered into within a period of three years. The fourth contract automatically becomes a permanent one. A wider chain-contract rule applies to employees who have reached state pension (AOW) age. An AOW pensioner may enter into six fixed-term employment contracts within a period of four years.
There are also further advantages to employing AOW pensioners. They are entitled to thirteen weeks of continued pay during illness, instead of two years. Less strict reintegration obligations also apply to AOW pensioners. In addition, an AOW pensioner’s net pay is higher, since only wage tax needs to be withheld – social security contributions do not. Moreover, the notice period is only one month, and no transition payment needs to be paid when the employment contract ends.
Employing AOW-entitled employees therefore brings meaningful advantages.
Questions about the above?
Please contact one of Sørensen Advocaten’s employment lawyers. Call: +31 (0)10-2492444
