The works council in collective redundancy plays a crucial role in protecting employees and in decision-making within a company. Employers wishing to dismiss staff for economic reasons must not only inform the <UWV, but also consult the works council (OR) in good time. The labour law lawyers of Arslan Advocaten explain what the statutory rules are, how the procedure works and what consequences non-compliance can have.
What is collective redundancy?
Collective redundancy is when an employer wants to dismiss at least 20 employees within one work area within three months. This falls under the Collective Redundancy (Notification) Act (Wmco). The aim of this law is to protect employees, trade unions, and the OR from sudden mass redundancies and to give them the opportunity to influence decision-making.
Obligation to report to the UWV and consult with the OR
Before an employer can implement a collective redundancy, he must notify the UWV, the trade unions, and the works council of this. The notification includes:
- The reasons for the dismissal;
- The number of employees involved;
- The functions to be cancelled;
- The period during which the dismissals take place;
- The criteria for selection and redeployment.
Without notification to the OR or UWV, the dismissal is not legally valid. Employers who skip this step risk having the dismissal annulled by the court.
The role of the Works Council(OR)
The OR has a statutory right to advise on important decisions by the employer (article 25 Works Councils Act). A collective redundancy is undoubtedly one of these. The employer must therefore first submit the proposed decision in writing to the OR, with all relevant information.
What should the OR evaluate?
- The necessity for dismissal (economic or organisational)
- The chosen selection criteria for dismissed employees
- The measures to enable redeployment or training
- The social consequences for the staff and the social plan
The OR may then issue advice. The employer may only implement the dismissal after this advice has been issued and the waiting period of one month has expired. If he does so earlier, he is acting in violation of the law.
Right to advise and appeal to the Enterprise Chamber
If the employer ignores the OR’s advice, the OR can appeal to the Enterprise Chamber of the Amsterdam Court of Appeal. The Enterprise Chamber can suspend or annul the employer’s decision if it is contrary to the principles of reasonableness and fairness.
The judge will look at, among other things:
- The care taken in decision-making;
- The justification of the economic necessity;
- The involvement of the OR and employee representation;
- Any agreements in the social plan.
Social plan and negotiation with trade unions
A social plan is usually drawn up in the event of a collective redundancy. This includes agreements on redeployment, transition compensation, outplacement, training budgets, and guidance to new work. The trade unions and OR often negotiate with the employer about the content of this plan.
A social plan is not legally required, but it is essential in practice. It shows that the employer takes his duty of care seriously and prevents lengthy legal proceedings.
Employer’s obligations
- Timely notification to UWV, OR, and trade unions (at least one month before the dismissals)
- Consultation on alternatives to dismissal
- A written motivation of the economic necessity
- Respect for the OR’s right to advice
- Compliance with the social plan
Consequences in case of non-compliance
If the employer violates the OR’s right to advice or ignores the obligation to notify, this can lead to:
- Annulment of the dismissal decision by the court
- Fines imposed by the UWV
- Reputational damage and unrest within the organisation
- Additional costs due to the restoration of employment contracts
Example from practice
In a recent case, the court ruled that an employer had to reverse the decision to reorganise because the works council had not been consulted in good time. The company had already dismissed staff before the OR advice was issued. The court found this contrary to the Wmco and required reinstatement of the employment contracts with payment of wages.
Frequently asked questions about the OR’s role in collective redundancy
What is the difference between the right to advise and the right to consent?
The right to advise means that the OR may give advice before a decision is made. The right to consent only applies to specific matters, such as working hours or working conditions. The right to advise applies in collective redundancies.
Can an employer ignore the OR’s advice?
Yes, but the OR can then appeal to the Enterprise Chamber within one month, which can suspend or annul the decision.
When is there a collective redundancy?
When an employer wants to dismiss twenty or more employees in the same work area within three months. This applies regardless of the size of the company.
What should be included in a social plan?
A social plan contains agreements regarding severance payments, guidance, and redeployment. This plan is often drawn up in consultation with the trade unions and the OR.
Arslan Advocaten assists in collective redundancies
The labour law specialists of Arslan Advocaten assist employers and works councils in reorganisations and collective redundancies. We help with the preparation of social plans, the conducting of consultations and compliance with legal obligations. Do you want to know if your company complies with the rules of the Wmco? Contact us for legal advice.
