Change in the Collective Redundancy (Notification) Act

On 1 March 2012 the Collective Redundancy (Notification) Act (the 'WMCO') changed. The most significant change is that the WMCO now applies to all forms of employment contract termination. Previously, the WMCO only applied to the termination of employment contracts after obtaining a permission to terminate employment from the UWV WERKbedrijf or through dissolution by the courts.

The most important sanction is that a dismissal or an agreement to terminate the employment contract can be declared null and void if the obligations of the WMCO have not been met. In that case the employment contract is 'revived'. It is therefore advisable to observe the obligations under the WMCO correctly.

The WMCO's scope of application

The subject matter of the WMCO is the implementation of the European Directive on collective redundancy. Under the provisions of this directive, notification of planned collective redundancies must be given to the trade unions concerned and to the competent authority - in the Netherlands this is the UWV WERKbedrijf - in a timely manner.

On the basis of the WMCO the employer must give notification of any planned redundancy of 20 or more employees within a period of three months. Previously, this only applied to termination through the UWV WERKbedrijf or the sub-district court. As a result of the amendments to the WMCO all redundancies by means of a termination agreement fall under the WMCO's scope of application. So, it now makes no difference how the employment contract is terminated. All methods of employment contract termination now fall under the WMCO's scope of application. It is therefore no longer possible to circumvent the WMCO's number criterion of 20 employees – thus avoiding the obligations of the WMCO – by terminating all (or some) of the employment contracts by mutual consent.

Notification of collective redundancy

The employer must notify the trade unions of the planned redundancy. A copy of the notification must be sent to the UWV WERKbedrijf. Furthermore, the employer must consult the trade unions concerned – and the Works Council, where appropriate. It is not necessary for this consultation to lead to an agreement on the planned redundancy.

The WMCO lists the information that must be given. This information primarily relates to the consequences of the redundancy and the measures that will be taken to deal with these. If the employment contracts are to be terminated as a result of the employer's going bankrupt then the content of the notification is subject to less stringent requirements.
The employer cannot give less than a month's notice from this notification that it is terminating the employment contracts, even by mutual consent. This also applies to dissolution by the courts, which cannot take place until a one-month waiting period has been observed. The one-month wait does not apply if interested trade unions issue a statement to the effect that they have been consulted and agree to the termination of the employment contracts.

Permission to terminate employment

The UWV WERKbedrijf will only deal with requests to issue a permission to terminate employment once notification has been given and it is evidenced by a written statement that the trade unions and Works Council have been consulted. If the employer makes a reasonable case that complying with that obligation would jeopardise the reinstatement of the employees threatened with redundancy or the jobs of the other employees in the company, the UWV WERKbedrijf will deal with the requests immediately after notification.

Annulment and revoking of the termination

If the employer has failed to comply with the terms and conditions imposed by the WMCO, the employee who has been made redundant can annul the termination of the employment contract within six months. This will result in the employment contract being 'revived' and regarded as never having been terminated. This is obviously undesirable, because continuing the employment contract is not to the employer's advantage. It is therefore advisable to observe the terms and conditions of the WMCO correctly.

In brief;

  • For the purposes of calculating the termination of 20 or more employment contracts within three months, those employment contracts terminated by mutual consent will also be included from now on.

  • If the trade unions are not consulted and the employer goes ahead with the termination of the employment contracts on the basis of a consensual agreement that determines the legal relationship between both parties, these agreements are subject to annulment. This may have far-reaching consequences, since redundancy pay will have to be paid back in the event of annulment and the employment contract will have remained valid throughout.

Authors

Picture of Tjeerd Hoekstra
Tjeerd Hoekstra
Advocaat
Amsterdam