As of 1 October 2021, the support measures of the UWV (Employee Insurance Agency)- including the Temporary Emergency Measures for Bridging Employment (“Noodmaatregel Overbrugging Werkgelegenheid”) – have been repealed. This means that employers will no longer receive financial support for the adverse effects of the coronavirus on the economy. The Netherlands Bureau for Economic Policy Analysis (CPB) recently announced that between 65,000 and 180,000 employees kept their jobs during the corona crisis because of the support granted to employers by the government. It is therefore expected that – with the repeal of the support measures – some employers will be forced to implement job cuts via a reorganization in the near future.
In the near future, we will inform you in a series of blogs about the most important topics concerning the reorganization dismissal. The following topics will be discussed: the procedure for dismissal due to reorganization, business economic reasons, reflection principle and reassignment and as last the rights of employees in the event of business economic dismissal.
An employer may decide to reorganize his company for various reasons. Given the present state of affairs, lower turnover, a reduction in work and/or a poor financial situation will often make changes unavoidable. This often results in the loss of a number of jobs within the company.
Permission UWV
For the dismissal of employees in connection with a reorganization, the employer in principle needs permission from the UWV. The employer sends an application to the UWV, in which the employer must demonstrate that there are good (economic) reasons to reorganize and that the employees cannot be employed elsewhere within the company. The UWV will only grant permission if all legal requirements have been met. After the employer has received the permission, the employment contracts with the employees concerned can be terminated with due observance of the notice period.
Trade Unions and Works Council
Sometimes, the employer must involve the trade unions and/or the Works Council in the decision to reorganize. The trade unions must in any case be involved if there is a case of collective dismissal (20 or more employees within the same working area within three months). The applicable collective agreement (if any) may also provide that trade unions must be involved in the decision or at least be informed about it. Often the employer and the trade unions will then draw up a Social Plan together, setting out the agreements/conditions involved for the dismissal. If a Works Council has been established, its advice on the intended decision to reorganize must be requested. This advice must be requested before the final decision is taken.
Settlement agreement
Usually, the employer will first try to terminate the employment contract by mutual agreement. If the employee is willing to agree to a dismissal by mutual consent, the arrangements made in that context will be included in a settlement agreement. If an employee does not agree to a settlement agreement, the UWV procedure will still have to be followed.
Experienced lawyers
The lawyers of Blenheim regularly assist employers and employees who are faced with a reorganization. We provide tailored advice and guide the process from the preparation to the settlement of the dismissal. We often offer the possibility to agree on costs in advance, such as a fixed price per employee or phase in the process.
Do you have questions about dismissal and reorganization? Please contact our lawyers of the Labour Law team.