Extend it one more time? The chain provision continues to apply 📝

It's so easy: an employee gets a one-year contract, the year is over, and you simply extend it “one more time.” Practical, flexible, and everyone can continue. However, in labor law, “one more time” is not endless, not even for people of retirement age. The chain provision determines how often and for how long temporary employment contracts may follow each other. And if you exceed the maximum term or the maximum number of contracts, the temporary nature of the contract automatically changes into something you may not have intended: a permanent employment contract.

That is exactly what is happening in this case. The employee had been working for the employer since October 5, 2016 (after reaching retirement age) and was always given a fixed-term employment contract for one year. The last contract expired on July 31, 2025. After that, the employer assumed that the employment relationship would “simply” end due to the expiry of the term. The employee was no longer scheduled to work, did not work anymore, and was no longer paid.

The employee raised the alarm, and due to the chain provision, a permanent employment contract has now been created. After all, nine years had passed! Although the ruling does not mention this, an exception to the standard chain provision (three contracts and a maximum of three years) applies to employees who are eligible for state pension, namely a maximum of six contracts for a maximum of four years. And what the employer is doing now has nothing to do with a “termination by operation of law,” but is a termination. The employee is claiming fair compensation because, in his opinion, the termination is contrary to the law.

The subdistrict court judge goes back to basics: is this still a fixed-term employment contract, or has the chain provision resulted in a permanent employment contract? The employee points out that he has been receiving annual contracts for years. The employer even acknowledges that the chain provision would “in principle” mean that a permanent employment contract has now been created.

However, the employer then tries to find a way out via sector rules. This case concerns education: the employee was a teacher in the International Transition Class and was not formally qualified to teach. The employer argues that the Secondary Education Act 2020 and the collective labor agreement VO 2024-2025 stipulate that unqualified teachers cannot be employed on the basis of a permanent employment contract. In other words: “Yes, chain provision, but in our case that is not actually possible.”

The subdistrict court judge did not agree. According to the subdistrict court judge, the chain provision is an essential labor law protection rule (and is also included in the collective labor agreement). That rule cannot be set aside by an industry provision that is primarily concerned with optimizing the quality of education. The message is clear: it is up to the employer to apply the rules in such a way that they are complied with. If this is not properly organized, it cannot be passed on to the employee.

Because the employer gave notice, stopped providing work and paying wages after July 31, 2025, and the employee stopped performing work, the subdistrict court ruled that this constituted termination. Because this termination was in violation of the law, it is unlawful and the employee is entitled to fair compensation, which the subdistrict court judge set at € 15,000 gross, slightly more than five months' salary including vacation pay. This is how long the employment contract would have continued if it had not been unlawfully terminated.

Think of the chain provision as a kitchen timer: if it runs too long, “temporary” automatically changes to “permanent,” and that realization often comes at the most expensive moment.

Finally, the bill “more security for flex workers” is still under consideration. One of the proposed changes concerns the chain provision. If the bill is passed, the interval between successive employment contracts will be extended from 6 months to 5 years. Something to keep an eye on.

Do you have any questions? Please contact Tessa Sipkema, Elke Hofman-Bijvank, or Dennis Oud.

You can read the ruling here.