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If you run a company in the Netherlands, major changes such as business restructuring, relocation, downsizing or bankruptcy, may have serious consequences for your staff. If you have to dismiss some of them, you could establish collective arrangements and provisions for both remaining and departing personnel in a social plan.
Social plan not compulsory
A social plan is not required by law. Usually the CAO (Collective Labour Agreement) contains provisions with regard to drawing up a social plan. In any event, you must be able to show your works council what measures you will take with regard to your staff while restructuring.
When to draw up a social plan
You need a social plan if you have to dismiss people. If this involves 20 people or more, it is called a collective dismissal. You must report a collective dismissal to the Employee Insurance Agency (Uitvoeringsinstitiuut Werknemersverzekeringen, UWV) and your employees' trade unions. You must also consult the trade unions regarding a social plan. You can, however, also draw up a social plan if you intend to dismiss only a few employees.
Usually, you negotiate a social plan with the trade unions. However, you could also agree upon a social plan with your works council. Finally, you could decide to draw it up by yourself.
Contents of a social plan
For employees that will be made redundant, the social plan regulates matters such as the transition payment. For the remaining employees, the social plan regulates other matters, such as workplace changes, for example when relocating. The CAO can also determine which aspects should be included in your social plan.
Changes to dismissal rules
A new law came into force on 1 January 2020 to regulate flexible work, dismissal and the financing of unemployment benefit. Through the Balance Employment Market Act (Wet arbeidsmarkt in balans, WAB), it is more attractive for employers to offer a fixed contract rather than a flexible one. At the same time flex workers have more stability in their job and income. The new law effects:
- Dismissals and transitional payments
- Temporary employees and chain provision
- Payroll staff and stand-by workers
The new law also means cumulative grounds for dismissal is to be added to the list of reasonable grounds for dismissal. Find out more about preparing for the Balance Employment Market Act.