Better protection of employees in case of bankruptcy and restart

What changes?

Are you going to petition for bankruptcy for your business, and will you make a restart? If so, new rules will apply. The Transfer of Undertakings in Liquidation Act (Wet overgang van onderneming in faillissement, Wovof) will provide better protection for your employees if your company makes a restart.

The most important changes:

• When you restart your business, you must rehire most of your employees.
• A restart cannot be the reason to refuse to offer employees a contract.
• Do you have commercial reasons to take fewer employees with you? Such as less customers, a relocation, or automation? In that case, you may take fewer employees with you. You must, however, determine who you take with you based on objective criteria. For example, number of years of service, position, or department. This is done on a similar basis to selection in the event of dismissal outside of bankruptcy. The supervisory judge checks if you made the selection in a correct and fair manner.

The rules do not apply to companies with less than 20 employees, unless you participate voluntarily.

Also:

• The non-compete clause automatically expires if an employee does not receive a new employment contract.
• The works council or staff representation may advise on the restart.

For whom?

• entrepreneurs who take over a bankrupt business and make a restart

When?

It is not yet known when the change in the Transfer of Undertakings in Liquidation Act will take effect.

Please note: The effective date of this measure is not yet final. Entry into force is subject to its passing through the Lower and Upper Houses (Tweede en Eerste Kamer) of parliament. After publication in the Staatsblad or Staatscourant (Government Gazette, in Dutch) the law can take effect.