Collective redundancies

If you run a company in the Netherlands and plan to dismiss, for business economic reasons, at least 20 employees within one geographical work area within 3 months, this is called collective redundancy. Whether it concerns compulsory dismissal or dismissal with mutual approval is irrelevant. The rules that apply to collective redundancies are laid down in the Dutch Notification of Collective Redundancies Act (Wet melding collectief ontslag, WMCO).

Employer's obligations

The intention to proceed with collective redundancies means you have the following obligations:

• You must report the intention to the trade unions and the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV).
• You consult the trade unions.

If you do not comply with the duty to report, this can lead to the annulment of the dismissals.

Your consultation with the trade unions must cover:

• ways to avoid redundancies
• how to keep the number of dismissals to a minimum
• how to limit the effects for the employees involved, for example by drawing up a social plan

Method of selection for redundancy

In a collective redundancy the 'last in first out' principle determines the order of dismissal. To do so, you divide your employees with similar functions into age categories. Employees with the shortest length of service per category are selected to be dismissed first.

Terminating or dissolving employment agreements

The UWV only accepts your request when you have complied with the duty to report and consulted the trade unions and possibly your own works council. You can only terminate or dissolve the employment agreements a month after reporting the intention. This is not required if the trade unions have declared in writing that they have been consulted and that they are in agreement with the collective redundancies.