Collective redundancies

Do you run a company in the Netherlands do you need to dismiss a large number of employees for business economic reasons (collective redundancy)? You must follow the rules for collective redundancies in the Collective Redundancy (Notification) Act (Wet melding collectief ontslag, WMCO). Whether the dismissal is compulsory or with mutual approval is irrelevant. 

Conditions for a collective redundancy 

Collective redundancy occurs when: 

• you have genuine business reasons for the collective redundancy
• you need to dismiss at least 20 employees within 3 months
• your employees facing dismissal all work in a single WMCO-region (in Dutch) 

Employer's obligations in a collective redundancy 

If you meet the conditions for collective redundancy you must first:

• notify the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV)
• consult each trade union with members working in your business
• discuss the proposed redundancy with your works council, if you have one 

Your consultation with the trade unions must cover: 

• ways to avoid redundancies
• how to keep the number of dismissals to a minimum
• how to limit the effects for the employees involved, for example by drawing up a social plan

If you fail to take any of these steps first, your dismissals may be legally annulled. 

Method of selection for redundancy 

In a collective redundancy, you must first dismiss your external staff, such as temporary agency workers and posted workers. Then the reflection principle (afspiegelingsbeginsel, in Dutch) determines the order of dismissal. You divide employees with similar positions into age groups. The most recent hires in each age group are selected to be dismissed first. 

You can contact the Employee Insurance Agency for access to their reflection principle tool to help you determine the order of redundancy within your company. 

Terminating or dissolving employment agreements 

The UWV only accepts your request when you have complied with the duty to report, and consulted the trade unions and possibly your own works council. You can only terminate or dissolve the employment agreements a month after reporting the intention. This is not required if the trade unions have declared in writing that they have been consulted and that they agree with the collective redundancies.