A) Applicable Law
The question which law applies to an expat employment contract is easily asked but not so easily answered. It may be the law of the Netherlands or the law of the head office of the employer.
Furthermore the answer depends on what has been agreed and how parties have executed the contract. As time goes by the result might even change.
Thus the drafting of an expat employee contract is more complicated than the average employee contract. Likewise regarding the resolution of disputes.
B) Applicable Law Within EU
- EU regulations state that the applicable law for an employment contract is the law of the country in which the employee usually works.
- Even if the employment contract stipulates that the law of another country is applicable.
- Regardless if the employee is temporarily assigned to another country.
C) Working In Several Countries
If the expat works in several countries and he does not usually work in one country, then the law of the country where the employer is located will be applicable.
D) Exception By Expat Clause
The mentioned general rules do not apply if it can be proven that the expat’s work is more closely connected to another country. Then the law of that other country applies.
E) Interpretation Of Facts
It is not always easy to determine which of the described situations is at hand. When drafting the contact or in case of resignation and such it is good to be aware thereof beforehand.
F) When To Sign A Contract?
- When all legal, tax and pension issues have been stated and phrased in the best possible way for you.
- In case of multi national aspects, be highly alert.
- Not using specialists in order to prevent costs might be expensive.