Reorganizations in 2023

Reorganizing in 2023? This month, the UWV (Dutch labor office) introduced new implementation rules for dismissal for economic reasons. We list the most important changes and additions.

• Multiple business economic reasons for the same reorganization: the UWV clarifies that an employer may cite multiple business economic reasons for the same reorganization. Examples include a reduction in work, an organizational or technical change and a poor financial situation. In principle, therefore, there is nothing new under the sun, but the UWV explains this possibility in more detail.
• Dismissal protection for sick AOW-entitled employees: the dismissal protection for sick AOW (state pension)-entitled employees is expected to be shortened from 13 weeks to 6 weeks as of July 1, 2023. This means that an employer is expected to be able to terminate the employment contract with a state pension entitled employee after 6 weeks with respect to new cases of illness arising on or after the intended transition date of July 1, 2023. This envisaged change will end the current transitional law. Incidentally, this envisaged change refers to changing the prohibition on notice itself. Thus, the changed situation will not only apply to termination on business economic grounds, but also to termination on other grounds.

If an employer intends to terminate employment contracts of 20 or more employees (the number criterion), working within one so-called working area, within a period of three months, we speak of collective redundancy under the Collective Redundancy Notification Act (“WMCO”). The WMCO imposes additional requirements in the context of this collective dismissal in addition to regular dismissal law. With the new implementation rules, the UWV has changed and/or clarified the following in the field of collective dismissal:
• Statement from trade unions: the UWV explains clearly what it means if, in the case of collective redundancies, the employer has submitted a statement from the trade unions indicating that the number of jobs to be lost proposed by the employer is necessary for efficient management.
• Expanding the scope of “redundancy”: the UWV explains that it follows from the case law of the EU Court of Justice that there may also be “redundancy” within the meaning of the WMCO if an employer unilaterally proceeds to a substantial modification of essential elements of the employment contract for non-personal reasons. Examples include part-time dismissal, an offer of transfer or reassignment under the threat of dismissal.
• On-call contracts: the UWV explains under what circumstances the reduced or no longer calling up of on-call workers may be regarded as termination of the employment contract within the meaning of the WMCO. For example unilateral reduction of the number of minimum hours, which qualifies as (part-time) dismissal. This termination will then count toward the number criterion.
• Regulation of debt restructuring of natural persons: the WMCO already provided that dismissals resulting from bankruptcy fall under the notification obligation of the WMCO. The UWV adds that this also applies to dismissals due to application of the debt restructuring scheme for natural persons.
• Provisional application: in line with case law of the EU Court of Justice, a provisional application for dismissal for business economic reasons (part A) also counts towards the number criterion. The idea behind this is that the submission of part A is considered an act by which the employer expresses that he wants to terminate the employment contract.
• Assessment moment of the UWV: the dismissal rules state that after receiving a dismissal request for business economic reasons, the UWV assesses whether there is a collective dismissal within a period of three months. Based on European case law, any three-month period surrounding one of the actions to terminate the employment contract can be considered. This has been clarified in the new implementation rules.
• “Employee in disguise”: if an employee argues that the employer also discharges independent contractors, who are in fact employees (“employees in disguise”), who should count towards the number criterion, the UWV will not investigate this as long as the court has not (yet) ruled that there is an employment contract. Does the court rule that this is the case? Then the UWV will count the termination of that employment relationship towards the number criterion.
• No dismissal intention yet: the dismissal rules further explain that if a dismissal request shows that the job of another employee has been lost but that the employer will not dismiss that employee within a period of three months, there is not yet an intention to dismiss within the meaning of the WMCO.

These are the most important changes and further explanation from the UWV. Do you have questions or are you curious how this might affect your reorganization plans? Please contact us, we will be happy to help you.