It is important for companies to making adapting to changing market conditions a regular business practice. This may result in specific organisational changes, possibly coupled with forced dismissals. Organisational changes may be based on a variety of commercial reasons, such as:
- a worsening financial position;
- reduced workload;
- organisational changes/reorganisation.
A business does not have to be loss-producing to implement a reorganisation.
However, it is crucial that organisational changes should be made with all due care and in accordance with the reorganisation rules. A reorganisation plan will be needed to avoid as much delay as possible.
Reorganisation plan
Briefly put, the following steps must be taken based on the reorganisation rules:
- If necessary, the works council must be asked for a formal opinion before a resolution is passed that will effect an organisational change (Section 25 Dutch Works Councils Act (WOR)).
- An assessment must also be made regarding whether the Dutch Collective Redundancy (Notification) Act (WMCO) will apply, based on which any trade unions involved may also have to be consulted.
- An employer will also have to substantiate its need to take the proposed measures for commercial or organisational reasons (the business case);
- In this regard, a prima facie case will have to be made that the elimination of the positions is necessary.
- A determination must then be made of which employees will be eligible for dismissal and why certain positions will be eliminated. If the issue is cutbacks within a group of interchangeable positions, the reflection principle must be applied at each branch of the company. This means that employees who hold almost identical (read: interchangeable) positions must be divided into five age categories ###(15-25, 25-35, 35-45, 45-55, and 55+)###. The age categories within which these dismissals must be effected will be determined by how many employees must be dismissed. Within the relevant age categories, those who have been most recently hired will be the first ones eligible for dismissal. Before this, however, temporary and hired-in employees (such as temps hired from agencies) must first be dismissed, followed by employees whose positions will be eliminated and who have reached Dutch State Pension retirement age.
- Furthermore, the employer must make a prima facie case that no other positions will become available within a reasonable period of time, even if additional training were offered. In this regard, the employer may sometimes be required to apply the ‘reverse reflection principle’. The reasonable period for reassignment is the same length as the statutory notice period.
- If no termination agreement can be reached, the dismissal must be effected via the UWV. In this regard, the aforementioned steps will be taken and the employer will be prohibited from hiring any new staff for the positions that will be eliminated for a period of 26 weeks after any approval which the UWV issued with regard to terminating the employment contract unless this position is offered first to the employees who have been dismissed (the ‘recommencement of employment condition’).
- Employees who are ill will be protected by a prohibition on termination. The same will be true in the case of a reorganisation, unless an employer will be discontinuing all of its commercial operations.
Legal advice regarding organisational changes
Do you need advice or assistance with an organisational change? Please contact us at +31202351150 or via the contact form. We would be glad to help.