15 December 2015

Reorganization and collective dismissal in the Netherlands

Reorganization and dsimissal: the Rabobank example

Reorganizations of businesse is sometimes unavoidable. Reorganizations of companies usually result in redundancies that make (collective) dismissals of employees inevitable. For instance, Rabobank recently announced a restructure which would lead to the loss of 9000 jobs between 2016 and 2018. This is almost 25% out of the total jobs within the company.

Legal advice in relation to reorganisations and dismissals

A reorganization exmple is Dutch Rabobank who was planning a restructuring in the Netherlans, a so-called Social Plan needs to be drafted, setting out, amongst other things, the consequences of the reorganization on the employees e.g. redundancy packages, termination date and any offers of outplacement or redeployment. The employer in question may also be required to consult with the relevant trade unions and, where applicable, the company’s works council (for companies with 50 or more employees) or employee representatives in relation to any dismissals and while drafting the Social Plan. In most cases the trade unions and/or the works council will actively negotiate with the employer over a redundancy package and the content of the Social Plan.

In case a reorganization for economic reasons involves the dismissal of 20 or more employees within a period of three months, the dismissal is considered a collective dismissal for the purposes of Dutch employment law and will fall within the scope of the Dutch Collective Dismissals Reporting Act (in Dutch Wet Melding Collectief Ontslag, WMCO).

Collective dismissal and Dutch regulations

Under the Dutch Act, an employer intending on carrying out a collective dismissal affecting 20 or more employees within a time frame of three months is under an obligation to notify the relevant trade unions and the Dutch Employee Insurance Agency (UWV). The employment agreements may only be terminated once the UWV has been notified and the trade unions have been consulted. This can be done in several ways (see employment termination proceedings in The Netherlands), however in most cases the employer makes a proposal to terminate the employment agreement by mutual consent on the basis of the Social Plan.

Blenheim’s employment lawyers assist both employers and employees on issues surrounding reorganizations. We can draft a reorganisation plan and assist with dismissal proceedings and negotiations with the trade unions and works council (‘ondernemingsraad’). We also assist works councils and employees edfected by the reorganization.

Feel free to contact one of Blenhei’m’s employment attorneys.