When a reorganization is declared within a company, there will often be forced layoffs, whether or not combined with the introduction of new positions that existing staff can apply for. In this blog more about a reorganization with forced layoffs.
Business reason for dismissal
It is important to know that an employer can only let jobs go if there is an economic reason for dismissal. Think of bad financial circumstances or a change of organization. The economic reason is tested by the UWV in a dismissal procedure.
Assessment by UWV
UWV tests very strictly, employers are by no means always allowed to dismiss due to reorganization. After determining the reason for dismissal, the employer must apply the correct order of dismissal. First, the flexible layer (temporary workers, self-employed workers and temporary contracts shorter than 26 weeks) must be eliminated before the dismissal of permanent staff can take place.
Then, in principle, the employer must reflect on the permanent staff. This means classifying employees within a certain job category based on age and length of service. Then a calculation takes place that evenly determines which employees are eligible for dismissal.
The employer is not there yet, because an employer has an obligation of effort to redeploy employees within the entire company or group and must do his best to do so. UWV checks these main rules, and many other obligations of the employer, very carefully. Employers often don't feel like doing that, so settlement agreements are offered.
Settlement Agreement
If an employee is offered a settlement agreement in the context of a reorganization, the termination arrangement must be somewhat more favorable than what the employee is entitled to if the employer goes to the UWV and obtains permission for dismissal. If the arrangement in the settlement agreement is simply the legal minimum (i.e., transition compensation and notice period), then agreeing to a settlement agreement does not make much sense. In that case, it is (financially) more favorable to go through the UWV procedure and put up a defense. However, the UWV procedure often takes several months, so the employee will be out of work later, while he or she usually does not have to work anymore because of the loss of the job.
Negotiations
There is usually room for negotiation in the event of dismissal due to a reorganization, even if there is a social plan. Consider, for example, higher severance pay, longer notice periods or a budget for training or outplacement. If an employee does not agree with the loss of the job, i.e. dismissal, and wants to continue working for the employer, it is advisable to file a defense with UWV. Even if the employee is not vindicated by UWV, he or she can then go to the subdistrict court, where an appeal can be lodged.
Arguments an employee might use as to why dismissal due to reorganization is unjustified include:
- the decline of my employment is not at all necessary, my employer could have made other choices
- the correct order of dismissal was not established, as 1 or more colleagues were wrongly excluded
- I am sick and there is a notice requirement
- my employer has not made an effort to redeploy me within the organization or to another company within the group
It is wise to seek the advice of a lawyer specializing in labor law when reorganizing.
This blog was written by Mr. Stijn Blom, employment lawyer at Arbeidsadvocaat.nl B.V. Stijn has extensive experience in employment law and assists entrepreneurs daily with a wide range of employment-related matters. From dismissal cases to drafting watertight contracts and policies – with his practical and personal approach, he helps employers and employees move forward. Want to know more?Visit Stijn's page.
Arbeidsadvocaat.nl is happy to think with you if you have questions about business dismissal. Please feel free to contact us.
October 2024
