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 if you reorganise or merge your company. When you need to let go 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.

What is in a social plan?

In the social plan, you put the agreements you must keep to in case of dismissal or transfer of employees. For example, the reason for the reorganisation, transition payments, guidance, and transitional arrangements.

Do you have a collective labour agreement (CAO)? Find out if there is anything about a social plan in it. A CAO sometimes tells you what you have to put 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 employee transfer, the social plan goes into other matters, such as workplace changes when relocating.

Parties involved

You can negotiate a social plan with:

• trade unions: the union members need to approve of the social plan
• the works council: put this in the employment contract. Your employee must agree to this

You can also decide to draw up a social plan on your own. If you do, your employee has to accept the arrangements in the social plan before it can take effect.