Amendment to the rules governing collective dismissals

“In the event that an employer wishes to dismiss more than 19 employees for commercial reasons it is required to comply with the rules stipulated in the Dutch Collective Redundancy (Notification) Act and the Dutch Dismissals Decree (Ontslagbesluit). Article 4.2 of the Dismissals Decree includes the proportionality principle (referred to in Dutch as the afspiegelingsbeginsel, pursuant to which redundancies must affect all age groups of the employed staff equally), which the employer must take into consideration when it selects the employees who qualify to be made redundant. On the basis of the current proportionality principle, employees who hold interchangeable positions are divided into age groups, within which it is necessary to determine which employees entered the companys employment most recently. Those employees will be the first that qualify to be made redundant (last in, first out).

As from 1 April 2014, one part of the proportionality principal will be changed. An employee who is entitled to retirement benefits under the Dutch General Old Age Pensions Act (Algemene Ouderdomswet) will be the first to be dismissed. That will avoid a situation in which an employee who is entitled to retirement benefits is able to keep his job, while an employee who is not entitled to those benefits will lose his. It will also help to limit the number of employees who can apply for unemployment benefits.

An explanatory example:

At an employers company 30 jobs will be eliminated due to dismissals for commercial reasons. At the company there are 40 employees who are entitled to retirement benefits. In accordance with the new proportionality principle, the latter employees who were hired most recently will be the first to qualify for dismissal.

If you like to learn more about this subject please call one of our lawyers, who would be happy to provide you with a brief explanation (tel: +31 (0)20 344 61 00)

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