Drawing up a social plan

Is a social plan mandatory?

A social plan is not required by law. Usually, agreements are made about this in the collective labour agreement (CAO). If you do not have a social plan, you must inform the works council about the consequences of a possible reorganisation for your staff.

When to draw up a social plan

You can use a social plan if you have to dismiss people. Or in the event of a reorganisation or merger. When you need to dismiss 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 also draw up a social plan if you intend to dismiss only a few employees.

Contents of a social plan

The social plan contains the agreements you must observe in case of dismissal or transfer of employees. For example, the reason for the reorganisation, transsition payments, guidance, and transitional arrangements.

Do you have a collective labour agreement (CAO)? If so, it may determine what you must include in the social plan.

• In case of dismissal, the social plan describes matters such as the transition payment or a substitute allowance if this is arranged for in the CAO. Your employees can use this money to retrain for a different job, for example.
• In case of transferral, the social plan specifies other matters, such as workplace changes when relocating.

Parties involved

You negotiate a social plan with:

• the trade unions, the union members need to approve of the social plan
• the works council, this should be previously agreed upon with your employee in their employment contract

You can also decide to draw up a social plan by yourself. Your employee needs to accept the arrangements in the social plan before it can take effect.