The notification obligation – FAQs answered

For many employers, the notification obligation still raises questions. The (financial) consequences due to mistakes or unclarities are easily avoidable though. Below we answer the most frequently asked questions on this topic.

1. What is the notification obligation?
The notification obligation is an information obligation and applies to fixed-term employment agreements of six months or longer. It concerns that the employer must inform the employee in time whether the contract will be extended or not after its agreed duration. This notification must take place in writing, no later than one month before the end date of the fixed-term agreement.

2. What happens if the employer does not comply with the notification obligation?
If the employer fails to inform the employee (or does so too late), a notification compensation is due:

• No notification given: one month’s salary.
• Notification given too late: a pro-rated monthly salary.

Monthly salary refers to the agreed base monthly salary, excluding holiday allowance, reimbursements, bonuses, or variable wage components.

3. Does the employment agreement still end?
In case of a late or missing notification, the employment agreement still ends by operation of law. Unless the employee continues working after the agreement’s end date.

4. Is an oral notification sufficient?
Notification must always be given in writing. Strictly speaking, the employer is also liable for the notification compensation if no written notification has been given — even if it was otherwise clear to the employee that the agreement would not be renewed and/or the employee suffered no disadvantage as a result.

Therefore, a notification should always be made in writing or at least be confirmed in writing. If oral agreements are made, it is recommended to conform them in writing.

5. Does the employer also have to notify if they intend to offer the employee a new contract?
Yes, the notice obligation means that the employer must inform the employee whether they will extend the contract, and if so, under what conditions. So even if the employer intends to keep the employee, it is strictly speaking required to notify the employee.

6. Is a notification at the start of the employment (prior notification) sufficient?
Many standard employment contracts include a clause with prior notification, for example: “The employer hereby informs the employee that this fixed-term employment contract will not be extended after the agreed duration.”

Such prior notification is generally permitted and binding. However, caution is advised. A recent court ruling shows that prior notification included in the contract may not be sufficient in the case of successive fixed-term contracts. In this case, the court ruled that prior notification in an employment contract — which had already been extended twice — could no longer be regarded as a serious notification for the following agreement. The employer should have informed the employee in good time that the final (third) notification would be applied. By failing to do so (or only priorly) the required clarity and certainty for the employee was missing. As a result, the employer had not fulfilled the notification obligation and was required to pay notification compensation.

It is therefore advisable to be extra clear when notifying employees in the case of consecutive employment contracts.

7. Does a notification need to be sent individually, or can it also be communicated via an online HR system?
The employer is responsible for ensuring that the employee receives the notification. The employer must also be able to prove this if necessary — for example, by sending a registered letter, an email with a read receipt, or a WhatsApp message with ‘blue check marks’ (indicating the message has been read).

In practice, notifications are sometimes only posted in an online system, without informing the employee separately. The employer then assumes that the employee checks the system regularly. This is risky and could result in non-compliance with the notification obligation — and therefore liability for the notification compensation.

Our recommendation for employers: always inform the employee about the sending of the notification and ensure that you can prove the employee has received the message, even if the notification takes place via an online HR system. A small effort saves costs!