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When our clients face unforeseen circumstance when employing abroad, they turn to us for a solution using our in-country experts who are familiar with the regulations. This is one of the core services with the Shield GEO employment solution.
For example, we had a client with an employee on assignment in the Netherlands who wanted to secure a mortgage with a local lender. The problem was that the new employee was still on probation, so the lender could not approve the mortgage (because the employment was still not confirmed).Subscribe to get more insights like this.
In Netherlands, probation periods are not mandatory, but they can be helpful if an employee does not work out on an assignment. Without probation, normal termination notice and severance rules will apply. So, essentially probation protects the employer.
We told our client that they could waive probation for this employee, and allow them to get the mortgage, but they needed to understand how this would affect the employment relationship under Netherlands law.
Without probation, if the employee was repatriated or terminated then the following options are available:
Under this option, our client would have to give notice according to statutory periods, that are determined by length of service (unless a different notice period is in the contract). Notice periods range from one to four months.
This option eliminates the issue of notice, but our client might still need to pay severance. That can be negotiated if the termination is amicable, but if not then the severance rules under Netherland law would apply.
This example illustrates how complex foreign employment laws can be, and how easily an employer can be facing unexpected costs or legal issues. In this case, a part of our service was to explain the consequences of waiving probation and possible scenarios. The best approach would be to just ask the employee to wait until the end of their probation to apply for the mortgage, and avoid legal complications.Need help employing in Netherlands? Get in touch!
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