Interior Minister Guusje Ter Horst made the statement in a letter to parliament attempting to clear up uncertainty on the highly controversial issue.
Until now religious school boards faced legal proceedings if they expelled homosexual teachers.
The law was unclear as two constitutional rights clashed: freedom of education and freedom of sexual orientation.
Christian values
In her letter, Ter Horst said schools are entitled to demand that their staff adhere to the school's principles. In the case of strict Christian schools, this means they are entitled to reject applicants or sack teachers if their sexual orientation conflicts with the school's Christian values.
Nevertheless the minister stressed that in general homosexuals cannot be sacked or refused employment purely on the basis of their sexual orientation.
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This gets around the anti-discrimination Universal Equal Treatment Act (AWGB), which states that religious schools are not allowed to sack an employee because of the "single fact" of a homosexual nature or a homosexual relationship but can make a distinction on the grounds of "additional circumstances".
Last May, a Christian primary school in the Dutch town of Emst suspended a gay teacher on the grounds that his sexual orientation conflicted with the mission of the school. Religious schools in the Netherlands are state-funded in the same way as non-religious schools, based on the principle of freedom of education.
In June, the Council of State, the Netherlands highest advisory body, ruled that although schools are not allowed to discriminate, they can make specific demands of their staff.
The minister's letter is at odds with education minister Ronald Plasterk's view that schools have no right to dismiss teachers for being openly gay.
In her letter, Ter Horst admitted that existing laws are confusing, although there are no plans to change legislation on this matter. She said her letter was intended to clarify matters.



