A collective redundancy arises where an employer intends to terminate the contracts of twenty or more employees in one region within a three-month period for business economic reasons. A notification duty and a consultation duty then apply.
Legal basis
The Collective Redundancy (Notification) Act implements Directive 98/59/EC. Article 3 requires the employer to notify the intention to the UWV and to the relevant trade unions, setting out the reasoning, the numbers, the roles and the timing. All forms of termination count: notice through the UWV, termination by the subdistrict court and settlement agreements, provided at least five dismissals run through the UWV or the court. Article 5a provides that the UWV will not process dismissal applications until notification has been given and the unions have been consulted. Article 6 imposes a one-month waiting period after notification, which lapses if the unions declare they have been consulted and do not object. Failure to comply renders the notice voidable under Article 7.
How it works in practice
The process runs in parallel with the request for advice to the works council and with union talks on a social plan. In practice the order is: proposed decision, notification, union consultation, works council advice, final decision, and only then the individual dismissals. Reversing that order risks the decision being set aside by the Enterprise Chamber.
Where it goes wrong
Employers do not count settlement agreements and so believe they fall below the threshold; wrongly. A second error is offering termination agreements before notification. Third, the concept of region is drawn incorrectly; it follows the UWV’s division rather than the company’s own site structure.
Related terms
Collective redundancy connects to the UWV dismissal procedure, the works council and the settlement agreement.
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