The Dutch government recently introduced the ’Employment Emergency fund ’ (Noodfonds Overbrugging Werkgelegenheid; NOW) and other measures to address the consequences of the COVID-19 outbreak. Pursuant to NOW, employers can submit an application for a substantial contribution towards labour costs. More information on NOW can be found [here]. Nevertheless, the COVID-19 outbreak may require employers to contemplate more radical measures over the coming months. This blog provides a summary overview of the process of collective dismissals in the Netherlands.
If an employer intends to dismiss 20 or more employees within a period of three months, the Act on the Notification of Collective Dismissals (Wet Melding Collectief Ontslag) is applicable. According to this Act, the employer has to notify the Employee Insurance Agency (UWV), the works council and the labour unions concerned of the intended dismissals. The employer is required to consult about its decision and its social consequences with the works council and the unions. It should be noted that, pursuant to the Works Councils Act, almost all collective dismissals will also lead to a right for the works council to give advice on any decision the employer proposes to make.
In the information provided to the UWV and the labour unions, the employer must, inter alia, set out the reasons for the proposed decision, accompanied by a (detailed) list of the number of employees involved and the date of termination of their contracts, and the way in which any severance payments will be calculated. In addition, the employer must inform the labour unions of the consultation process with the works council.
After the information has been provided to the UWV, a waiting period of one month applies. During this waiting period, dismissal permits obtained from the UWV may not be used, new dismissal permits cannot be requested and no valid termination agreements can be agreed upon. The waiting period does not apply in situations of insolvency or if the trade unions confirm that they (i) have been consulted and (ii) agree with the dismissals. However, any such statement by the trade unions does not affect the obligation on the employer to give the works council the opportunity to give advice on the decision, which may lead to delay. Should the works council advise against the intended collective dismissal another one month waiting period applies. During this time period the works council can appeal the employer’s decision in court.
Once the obligations under the Act are complied with and the works council consultation process is finalised, the employer can request the respective dismissal permits from the UWV. This will take approximately two months (or longer if the UWV has received a large number of requests in the same period).
Please note that the UWV will take NOW into account when determining whether requests for dismissal permits will be granted. This means that when applying for dismissal for economic reasons, the employer will have to substantiate that the dismissal cannot be prevented by appealing to the NOW. This is in line with the aim of the NOW that dismissals should be prevented as much as possible.
If a dismissal permit is granted, the employer can give notice before the end of the month period. The notice period has to be taken into account, reduced by the period of the UWV procedure but with a minimum of one month notice applying. Alternatively, after the waiting period the employment agreements can be terminated by mutual consent.
If the employer has ignored the obligation to inform and consult with the UWV and trade unions, or the one month waiting period, employees may bring a claim at court to annul the termination of their employment agreements within six months after their respective employment agreements have been terminated.
We are happy to assist you with questions relating to (collective) dismissals, the NOW-measure or other issues you encounter due to the COVID-19 outbreak. Do not hesitate to contact one of our team members.