Hiring employees from outside the EU/EEA offers organisations many growth opportunities. At the same time, it comes with specific obligations. In practice, we see that Dutch immigration law and employment law do not always align seamlessly. This can result in situations where employers are unexpectedly faced with ongoing obligations.
Residence rights and employment contracts are separate
A common misconception is that an employment contract automatically ends when an employee’s residence permit expires. However, the absence of a valid permit does not mean that the employment relationship terminates by operation of law. Dutch employment law continues to apply in such cases, meaning that the standard dismissal rules must be followed to terminate the employment. In many cases, this requires a formal procedure through the UWV or the subdistrict court, or a mutual termination agreement.
It may also occur that salary must continue to be paid, even though the employee is no longer legally allowed to perform work in the Netherlands without a valid permit. This is particularly the case where the inability to work is not attributable to the employee’s sphere of risk.
Finally, we note that the employer may act as the (recognised) sponsor for the employee’s residence permit. This raises the question of whether the employer is obliged to maintain the residence permit for as long as the employment contract has not been formally terminated.
Dismissal prohibitions may limit termination options
The situation becomes more complex when additional employment law protections apply. A common example is illness. During an employee’s illness, a dismissal prohibition applies, meaning the employment contract generally cannot be terminated. As a result, an employer may have a continued obligation to pay salary, even if the employee no longer holds a valid permit. The combination of these rules can lead to complex and potentially costly situations in practice.
The importance of a well-structured employment contract
The way an employment contract is structured plays an important role in these matters. For initial residence permit applications, the validity period is typically aligned with the duration of the employment contract. This differs where an employee is already residing in the Netherlands based on an existing residence permit.
For example, if an employment contract for an indefinite period is concluded without considering the remaining validity of the residence permit, this may significantly limit flexibility in case of termination.
It is therefore important to carefully consider the relationship between the employee’s immigration status and the employment terms in advance. In some cases, it may be advisable to include additional provisions that allow for termination of the employment contract through the subdistrict court, for example in relation to the right to work in the Netherlands.
However, such provisions must be drafted carefully from a legal perspective. As a general rule, including a resolutive condition in the employment contract is void. In other words, a clause stating that the employment contract automatically ends if the employee no longer holds a valid residence and/or work permit will not result in a legally valid termination.
Thinking ahead helps mitigate risks
Many risks arise because insufficient consideration is given in advance to potential scenarios. Examples include the non-renewal of a residence permit, long-term illness, or organisational changes. If these situations occur without prior planning, this may result in limited options and ongoing obligations for the employer. A proactive approach, in which such scenarios are considered in advance, helps mitigate these risks.
Working with labour migrants requires careful alignment between immigration law and employment law. Both areas directly impact one another, while in practice they do not always operate in sync. By taking this into account when structuring employment contracts and internal processes, employers can avoid common pitfalls and maintain control over their obligations.
Want to know more?
It is advisable to seek timely guidance on procedures and compliance risks, for example when entering into new employment relationships, extending residence permits, or in cases of illness or termination.
We can support you with:
- assessing the appropriate residence permit
- monitoring permit validity and compliance obligations
- identifying risks related to changes in employment or personal circumstances
- coordinating with your HR or legal department
Please feel free to contact us for further information.
