Collective redundancies in The Netherlands with a Dutch works council

Table of Contents

💡 This guide has been created by a tech worker with extensive experience negotiating collective redundancies at companies with a Dutch works council.

Disclaimer: This document is intended for informational purposes only and does not constitute legal advice. For specific legal guidance or to address individual cases, please consult a qualified legal professional.

What are collective redundancies in the Netherlands? #

In the Netherlands, labour law provides strong protections for employees during collective redundancies (collectief ontslag). The Dutch Civil Code and the Collective Redundancy (Notification) Act govern the process.

Key points:

A collective redundancy occurs if 20+ employees are dismissed within 3 months.
The employer must notify the works council and the Employee Insurance Agency (UWV) in advance.
A mandatory consultation period must occur before layoffs are finalized.
Employees are entitled to fair severance and proper procedural treatment.

Role of the works council #

The works council (ondernemingsraad) is a legally mandated body in companies with at least 50 employees. Its primary function is to represent the interests of both the business and the employees by ensuring their rights are respected in situations such as restructuring, layoffs, and collective redundancy. The works council has specific rights during these processes, and while it does not have the power to halt redundancies directly, its consultation and advisory rights can significantly influence outcomes.

Rights of the works council #

In the absence of a union, the works council takes on an enhanced role in protecting the rights of employees, especially during difficult times like collective redundancy. Through its rights to information, consultation, consent, and legal recourse, the works council can ensure that redundancies are handled fairly and transparently, with proper attention to employees’ rights and welfare.

1. Right to information (Informatierecht) #

One of the primary rights of the works council is to receive timely and accurate information from the employer. This is crucial in helping the Council understand the company’s situation and the necessity for decisions like redundancy.

Employer’s obligation: Before any decision can be made on matters like restructuring, collective redundancy, or significant changes to working conditions, the employer must provide the works council with detailed information. This includes:

The reasons for the redundancies (financial or operational causes).
The number and categories of employees likely to be affected.
The selection criteria for determining who will be made redundant.
The timeline for the redundancies.
Any measures to reduce the impact on employees, such as redeployment or retraining programs.

The works council has the right to demand further clarification or additional information if it feels the provided data is insufficient or unclear.

2. Right to consultation (Adviesrecht) #

The works council has a formal right to be consulted on major decisions that affect employees, including collective redundancy. This is not just an opportunity for dialogue—it’s a legal requirement.

Mandatory consultation: Before the employer can implement a decision like collective dismissal, they must consult the works council. The employer cannot finalize or enforce the decision without first allowing the Council to provide its advice. This process includes:

Discussing alternatives: The works council can propose alternatives to redundancy, such as reducing working hours, redeploying staff to other roles, or voluntary severance.
Impact assessment: The works council can evaluate the potential social and economic consequences of the redundancies on employees and provide suggestions to mitigate these effects.

While the works council cannot stop redundancies outright, the employer is legally required to take its advice seriously. If the works council opposes the decision or believes the process is unfair, it has legal recourse.

3. Right to delay (Opschortingsrecht) #

If the works council believes that the employer’s decision is premature, lacks proper justification, or is being rushed, it can request a delay.

Delay via the enterprise chamber (Ondernemingskamer): If the employer disregards the works council’s advice or proceeds without proper consultation, the works council has the right to file a petition with the Enterprise chamber (Ondernemingskamer) of the Amsterdam Court of Appeal. This court handles disputes between the works council and the employer. The Council can request that the court delay the decision to allow for further consultation or evaluation of the redundancy plan.

The Enterprise Chamber can:

Suspend the employer’s decision.
Annul the employer’s decision if it finds that the works council’s rights were violated.
Require further consultation between the employer and the works council.

While the right to consent is not applicable directly to redundancies, the works council holds a right to consent for significant changes to working conditions, employee policies, and employment benefits. If collective redundancy leads to changes in these areas, the employer must obtain the works council’s approval.

For example, the works council has the right to approve or reject changes to:

Workplace regulations
Working hours or shift schedules
Training and retraining policies
Pension schemes or employee benefits

If the works council does not give its consent, the employer can appeal to the court, but the court must consider the works council’s objections carefully.

💡 The works council’s involvement ensures that employee interests are considered when crafting the social plan, and it can negotiate for better terms, especially when no union is present.

A social plan is an agreement between the employer and employees (or their representatives) outlining how redundancies will be handled and how employees will be supported. Although unions typically negotiate social plans, the works council can also play a key role in establishing a social plan during collective redundancy.

A social plan usually covers important aspects such as:

Severance packages beyond statutory requirements.
Retraining or redeployment options.
Support for finding new employment (such as outplacement services).
Compensation for employees nearing retirement.

6. Right to Initiate Investigations (Initiatiefrecht) #

In addition to responding to employer-initiated proposals, the works council has the right to take the initiative and make proposals on its own, including during times of restructuring or redundancy.

Proposing alternatives: The works council can propose measures that may help reduce the impact of collective redundancy, such as:

Introducing flexible working arrangements or reducing working hours.
Offering early retirement packages to certain employees.
Proposing internal job transfers or offering retraining to equip employees for different roles within the company.

This proactive role allows the works council to influence company policy and protect employees’ jobs to the fullest extent possible.

7. Protection against retaliation #

It’s important to note that members of the works council are legally protected against dismissal as a result of their involvement in Council activities.

Legal safeguards: Council members cannot be dismissed, disadvantaged, or discriminated against due to their activities on behalf of the works council. This ensures that they can perform their duties without fear of retaliation, even during times of restructuring or redundancy.

8. Right to legal counsel #

The works council has the right to seek legal counsel to assist in its functions and to navigate complex legal matters related to collective redundancy. This ensures that the Council can effectively fulfill its advisory and consultative roles, and adequately protect the interests of employees.

9. Role in communication and support for employees #

Without a union, the works council often becomes the primary source of information and support for employees. It:

Informs employees about their legal rights and the redundancy process.
Acts as a liaison between the employer and the workforce, promoting transparency.
Provides emotional and practical support to employees affected by redundancy.

The works council can hold information sessions or distribute materials that clarify employee rights, severance packages, and the timeline for redundancies, helping employees navigate the process.

The process of a collective redundancy Request for Advice (RFA) #

1. The Entrepreneur (representative of the company) submits an official Request for Advice to the works council #

This document outlines the employer’s intention to implement collective redundancies, including the reasons behind the decision, the number of employees involved, and the potential consequences for the workforce.

2. The Entrepreneur holds a consultation meeting with the works council to present the Request for Advice #

The employer is required to meet with the works council to explain the Request for Advice in detail. This meeting provides an opportunity for the works council to ask questions, seek clarifications, and begin the consultation process.

3. The works council reviews the Request for Advice #

The works council will analyze the Request for Advice and the information provided by the employer. This includes assessing the necessity of the redundancies, the justifications provided, the criteria for selecting employees for redundancy, and the potential impact on the remaining workforce.

The works council may request additional data or documents from the employer to fully understand the situation, such as financial statements, alternative solutions considered, and any proposed social plan or mitigation measures.

4. Consultation period begins #

During the consultation period, the works council and the employer will engage in discussions aimed at exploring alternatives to redundancy. The works council may suggest measures to prevent or reduce the number of dismissals, such as retraining employees, offering voluntary severance, or internal transfers.

Both parties discuss the selection criteria for employees at risk of redundancy and any compensatory measures, such as a social plan that addresses severance, redeployment, or training.

5. The works council issues formal advice #

After reviewing the information and conducting consultations, the works council will provide its formal advice to the employer in writing.

If the works council agrees with the employer’s plan, it may recommend proceeding with the redundancy, possibly with adjustments or conditions.
If the works council opposes the plan, it can propose alternatives or issue a negative advice, recommending changes or suggesting different actions.

6. Employer’s response to the advice #

The employer must consider the works council’s advice carefully. If the advice is not followed, the employer must explain why it chose to deviate from the works council’s recommendations. In cases where the works council disagrees, the employer must wait at least one month after providing its decision to allow for further discussions or potential legal action.

7. Possibility of legal recourse #

If the works council believes that its advice was not properly considered, or if it disagrees with the employer’s final decision, it has the right to appeal to the Enterprise Chamber (Ondernemingskamer) within one month of the decision. The Enterprise Chamber can review the employer’s actions, and if the works council’s objections are valid, the court may halt the redundancy or require further consultation.

8. Implementation of the redundancy plan #

After the consultation process is complete and all legal requirements are fulfilled, the employer may proceed with implementing the redundancy plan. Employees will be informed of their redundancy status, severance packages, and any support measures, such as outplacement services or retraining opportunities.

🗓️ A note on timeline #

💡 Depending on the complexity of the Request for Advice it can take from weeks to months for the process to be complete.

There is no set timeline or maximum duration for the collective redundancy process in Dutch law. The length of the process can vary significantly on several factors, including:

The complexity of the redundancy plan
The scale of the layoffs
The time required for the works council to thoroughly review the Request for Advice (RFA)
The duration of the consultation between the employer and the works council
Potential legal challenges or appeals by the works council

Both parties are encouraged to proceed in a timely manner, but the process must be thorough to ensure all legal obligations are met, and that the interests of the employees and the company are carefully considered.

Your legal rights during collective redundancy #

1. Right to notification and consultation #

Collective Redundancy (Notification) Act: Employers must notify the UWV and inform the works council. They are also required to consult with employees or their representatives regarding the dismissals (such as works councils or unions).
The consultation process gives employees (via works council or unions) a chance to offer input or alternative suggestions, such as redeployment or voluntary severance packages.

2. Protection from unfair dismissal #

Dutch labour law requires that the dismissals be conducted fairly. This means:

Selection criteria: In the Netherlands, the Proportionality Principle (Afspiegelingsbeginsel) is the key method used for selecting employees for redundancy. It ensures that the selection is made fairly by distributing dismissals proportionally across different age groups and functions. The goal is to maintain a balanced workforce.

The employer must divide the workforce into five age categories:

15-24 years
25-34 years
35-44 years
45-54 years
55+ years

Within each category, the “Last-In, First-Out” principle applies, meaning the most recently hired employees are laid off first, but dismissals must be spread evenly across the age groups to avoid disproportionately affecting any one group. Exceptions may apply (like essential skills).

Social plan: In some cases, companies may create a social plan in consultation with the works council to determine additional compensations or measures (e.g., retraining, redeployment).

3. Transition payment #

Under Dutch law, transition payment (transitievergoeding) is the base legal right for employees who are made redundant. This is the minimum compensation that must be provided as part of any separation package.

In most cases, employees are entitled to transition payment:

Employees who have worked for more than 2 years are entitled to transition payment.
The transition payment amount is calculated based on length of service and salary (approximately 1/3rd of the monthly salary per year of service).
There are exceptions for employees who are at the statutory retirement age.

In many cases, the overall separation packages go beyond this minimum, and can include additional compensation or benefits negotiated through a social plan or other arrangements. Separation packages are not restricted by a minimum of 2 years’ tenure and can apply to employees with shorter service periods.

4. Support from the UWV #

If you are made redundant, you can apply for unemployment benefits through the Employee Insurance Agency (UWV):

Unemployent benefits (WW-uitkering): This unemployment benefit is based on your work history and salary.
You must register with the UWV and actively seek new employment to receive these benefits.

5. Right to challenge a dismissal #

Employees have the right to challenge their dismissal if they believe it was unfair or not properly handled. This can be done by:

Seeking legal counsel: Consulting an employment lawyer to evaluate the legality of the dismissal and explore options.
Filing a claim: Employees can file a claim with the Dutch court (kantonrechter) to contest the dismissal. The court can order reinstatement or compensation if the dismissal is found to be unjust.

Sources for Dutch labour laws and works council acts #

Government websites #

Official Dutch government site with information on employment laws, redundancy, and works council rights.

Employee Insurance Agency (UWV) #

The Employee Insurance Agency handles unemployment benefits and collective redundancy processes.

Provides resources on the role of works councils and employment laws.

SER - Role of works council (NL)

Dutch Law Institute (dutch-law.com) #

Offers practical guides to Dutch employment laws and collective redundancies.

Dutch Law Institute - Collective redundancy (EN)