Reorganizations

Reorganisation in the Netherlands

A reorganisation is a drastic measure in which a company adjusts its structure, processes or workforce to save costs, operate more efficiently or respond to changes in the market. This may result in job losses, job changes or changes in terms of employment.

In the Netherlands, strict legal rules apply to a reorganisation, especially if it results in redundancies. Both the Unemployment Insurance Act (WW) and the Civil Code (BW), as well as rules from the UWV and collective bargaining agreements (CAOs), can play a role in this.

In Nederland zijn strikte wettelijke regels van toepassing op een reorganisatie, met name als dit leidt tot ontslagen. Zowel de Werkloosheidswet (WW) als het Burgerlijk Wetboek (BW), maar ook regels vanuit het UWV en cao’s (collectieve arbeidsovereenkomsten), kunnen hierbij een rol spelen.

Reorganisation: the procedure

A reorganisation leading to dismissal must be carefully prepared and carried out. The steps include:

Reason for reorganisation: the employer must be able to clearly justify why a reorganisation is necessary, e.g. due to business economic circumstances such as loss of turnover or profit.
Downsizing principle: if there are compulsory redundancies, the employer must, in principle, follow the downsizing principle This means selecting employees on the basis of age groups and job categories in order to distribute the number of compulsory redundancies as fairly as possible.
Re-employment possibilities: employer must also examine within the (group) of the company whether there are re-employment possibilities.
UWV permission: before an employer may dismiss someone for economic reasons, the UWV must give permission. The employer must demonstrate that the dismissal is necessary.
Social Plan: in larger companies, a social plan may be drawn up, setting out agreements on compensation, redeployment or other provisions for dismissed employees.

The importance of an attorney for employers

It is very important for employers to involve an attorney during a reorganisation for several reasons:

Compliance with legal rules: as an attorney, I can ensure that the reorganisation complies with legal requirements, such as the downsizing principle and the duty to redeploy. This prevents legal conflicts or delays.
UWV procedures: I can help submit a correct dismissal request to the UWV and make sure it is well-founded. An incomplete or incorrect application can lead to rejection, resulting in unnecessary costs and time lost by the employer.
Mitigate risks: A reorganisation involves risks such as legal claims from employees or mistakes in the procedure. I can help mitigate these risks and protect the company’s reputation.

The importance of an attorney for employees

For employees, reorganisation is often an uncertain and invasive process. Involving an attorney can be very important here to protect the employee’s rights:

Checking for compliance with rules: I can check whether the employer is following the correct procedures, such as the downsizing principle or the redeployment obligation. Failure to do so may result in wrongful dismissal.
Negotiating a settlement agreement: often, the employer offers a settlement agreement instead of a formal dismissal procedure. I can help assess this proposal and negotiate better terms, such as higher severance pay or outplacement arrangements.
Securing unemployment benefit: it is essential that a settlement agreement is drafted in such a way that the employee’s right to unemployment benefit is secured
Guidance on legal action: if the employee does not agree with the dismissal or reorganisation, I can help file an objection with the UWV or start proceedings with the subdistrict court.

Conclusion

Reorganisation is a complex legal process with major consequences for both employers and employees. Following the correct procedure and complying with the law is essential to avoid conflicts, legal claims and financial damage. Engaging an attorney is crucial for both parties to protect their interests, follow the right steps and negotiate fair agreements.

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The information on this page is for informational purposes only and should not be considered specific legal advice. For personalized advice, please contact Ok Legal. Please note that the content of this page may change without notice and Ok Legal is not liable for any inaccuracies and/or missing information.