If an employer intends to dismiss 20 or more employees (employed within one working area*) within a period of three months on commercial grounds, the employer must notify the trade unions and the UWV of such collective redundancy.

The number of 20 employees can be composed of:

• termination of employment agreements after UWV applications for dismissal;
• termination proceedings at the subdistrict court (until 1 July 2015); and
• termination agreements by mutual consent.

Commercial reasons

Commercial reasons justifying a dismissal may be: a poor financial situation, decrease in work, organisational reasons, technological changes, termination of business activities, relocation of the business or the expiry of labour costs or other subsidies.

Termination of the employment agreement

In the event of a collective redundancy, the employer cannot give notice to terminate the employment agreement of an employee until one month after the intention to do so has been notified to the UWV, and any trade unions involved have been consulted. If applicable, also a consulting process with the works council must have taken place.

Consequences of non-compliance with the WMCO (the Dutch Collective Redundancy (Notification) Act)

If an employer has not notified the UWV of the proposed collective redundancy, has not consulted the trade unions and, in so far as applicable, the works council, this could have the following consequences:
The notice to terminate the employment agreement after an application to the UWV to dismiss, can be annulled.
The subdistrict court can revoke the termination of an employment agreement.
The termination agreement can be annulled.

In the above situations, the employment relationship will be restored and the employees will become entitled to payment of their wages.

*”Zuid-Holland and Zeeland”, “Friesland, Groningen and Drenthe’, ‘Overijssel and Gelderland”, “Noord-Brabant and Limburg”, “Flevoland and Utrecht” and “Noord-Holland”.