The chain rule is the legal regulation stating that in certain situations an employment contract for an indefinite period of time arises. This is the case if the employer and employee have entered into a fourth fixed-term contract or as soon as the total duration of these contracts exceeds three years (an alternative arrangement may apply on the basis of a CAO). This chain is only interrupted (restarted) if there has been a period of more than three months between contracts.
In practice, it happens that an employer offers an open-ended contract at the end of the chain, but at the same time requires the employee to sign a settlement agreement at the end of the open-ended contract.
The Supreme Court ruled on 9 January 2015 on such a situation. Click here for the judgment.
The employer was only prepared to enter into an employment contract for an indefinite period of time if it was clear in advance when it would end (by means of a settlement agreement). The employee signed this termination agreement, but in fact had no choice. In essence, the Supreme Court ruled that the intention of the parties was decisive. In this case, it is in fact a case of a new fixed-term employment contract and this is contrary to the law.
In short, the Supreme Court ruled that the chain regulation cannot/should not be circumvented in this way.
Work and Security Act
As of 1 July 2015, the rules on succession of fixed-term employment contracts will be amended on two points. The employment contract for an indefinite period of time will start as soon as the total duration of the employment contracts has exceeded 24 months. The chain regulation will only start anew after an interruption of more than 6 months. The rules for the regulation of the succession of fixed-term employment contracts will therefore change, but even under the new law, evasion of the rules for the succession of fixed-term employment contracts in the manner described above will not be approved by the Supreme Court.