Redundancy in the Netherlands

What does redundancy mean under Dutch law?

Redundancy (boventalligheid) occurs when your employer determines that your position or role is no longer needed. Under Dutch law, this is classified as dismissal on economic grounds — the a-ground under Article 7:669 of the Civil Code.

Being declared redundant does not mean your employer can simply let you go. The employer must demonstrate that the redundancy is genuinely necessary due to economic circumstances, technological changes or organizational restructuring. Where applicable, the selection of which employees become redundant must follow the legally mandated reflection principle (afspiegelingsbeginsel). Incorrect application of the reflection principle is one of the most common reasons for UWV to reject dismissal applications.

Before proceeding with dismissal, the employer is also obligated to investigate whether you can be redeployed to another suitable position within the organization, including positions at other group companies. Only if redeployment is genuinely impossible can the employment be terminated, for example through a settlement agreement or a UWV dismissal procedure.

Legal requirements for redundancy

Genuine economic or organizational ground
Correct application of reflection principle
Redeployment investigation completed
Works council consulted (if applicable)
UWV permit or settlement agreement
Transition payment offered
Dismissal prohibitions respected

The reflection principle (afspiegelingsbeginsel)

When multiple employees hold the same or interchangeable positions, Dutch law prescribes a specific selection method. The reflection principle protects the age composition of the workforce and prevents arbitrary selection.

1

Identifying interchangeable positions

The first step is to identify which positions are interchangeable. Positions are considered interchangeable if they are comparable in terms of content, required knowledge, skills, competencies, level and remuneration. Positions that appear different on paper may still be interchangeable if the actual work is similar. Artificially narrowing function categories to circumvent the reflection principle can be rejected by UWV or the courts.

2

Distribution across age groups

Employees in interchangeable positions are divided into five age brackets: 15-24, 25-34, 35-44, 45-54 and 55+. Redundancies must be distributed across these brackets so that the age composition of the workforce remains as balanced as possible — reflecting the situation before the reorganization.

3

Last in, first out

Within each age bracket, the employee with the shortest tenure is selected first for dismissal. This is the last-in-first-out principle. The employee who was most recently hired within the age group is the first to be considered for redundancy.

4

Exceptions to the principle

The reflection principle does not always apply. It does not apply to unique positions, non-interchangeable roles or when an entire function category is eliminated. In specific circumstances, the employer may deviate — for example, for employees with essential specialized knowledge or skills. Certain protected employee categories may also be subject to different rules. CAO (collective labor agreement) provisions can supplement or modify the standard rules.

The redeployment obligation

What does the obligation entail?

Before your employer can proceed with dismissal, they are legally obligated to investigate whether you can be redeployed to a suitable position. The redeployment obligation follows from Article 7:669 of the Civil Code and further dismissal regulations, and is a precondition for dismissal.

A suitable position is one that matches your education, experience and capabilities. A position one level below your current role may also be considered suitable. The employer must also consider positions that are attainable after a short orientation period or additional training. UWV and the courts assess suitability based on the specific circumstances of the case.

The redeployment obligation applies not only within the employer's own organization but also at other companies within the group. The employer must proactively search for opportunities and cannot simply claim there are no vacancies without substantiation. Positions expected to become available within the reasonable redeployment period must also be taken into account.

The redeployment obligation is an obligation of effort, not of result. The employer does not need to guarantee that redeployment succeeds, but must demonstrate that a genuine search was conducted. UWV carefully assesses whether sufficient redeployment efforts have been made: insufficiently documented efforts are a common reason for rejecting dismissal applications.

Warning signs of insufficient redeployment

No consideration of positions at other group companies
Vacancies not actively offered to redundant employees
No retraining or upskilling offered for attainable positions
A new position created that closely resembles your eliminated role
Employer cannot provide documentation of redeployment efforts

If your employer has not made sufficient redeployment efforts, this can have consequences for the assessment of the dismissal request. UWV may reject the dismissal application on these grounds.

Dismissal routes after redundancy

Settlement agreement (VSO)

In many reorganizations, the employer offers a settlement agreement. You are not obligated to sign. After signing, you have a 14-day statutory cooling-off period. The agreement must be correctly drafted to protect your WW eligibility.

UWV procedure

If you do not agree to a settlement, the employer can apply to UWV for a dismissal permit. You have the right to submit a written defense. UWV assesses whether the economic necessity is proven, the reflection principle is correctly applied and redeployment efforts were adequate.

Subdistrict court

If UWV refuses the permit, the employer can turn to the subdistrict court within two months. After termination with UWV permission, you can request the subdistrict court within two months to reinstate the employment or award a fair compensation (billijke vergoeding).

Dismissal prohibitions

Certain employees are protected: those who are ill (first two years), pregnant employees, those on maternity leave and works council members. These prohibitions do not prevent the reorganization but do mean that these employees generally cannot be dismissed as long as the prohibition applies.

What can you do?

If you have been declared redundant, it is important not to act hastily. Do not sign any documents without legal advice. Take the time to have your position assessed: is the reflection principle correctly applied, has your employer made adequate redeployment efforts, and is the economic necessity properly substantiated?

In many cases, there is room to negotiate better departure terms. Even if the redundancy is legally correct, the employer may have an interest in a swift and smooth resolution, which can give you negotiating leverage.

Always ask for written substantiation of the redundancy declaration: why specifically your position was eliminated, how the reflection principle was applied and what redeployment efforts were made.

The transition payment

Upon dismissal after redundancy, you are entitled to a transition payment (transitievergoeding). This amounts in principle to one-third of a gross monthly salary per year of service, with partial years calculated on a pro rata basis. The transition payment often serves as the starting point for negotiations. Whether there is room for additional arrangements or a higher payment depends on the circumstances, such as the existence of a social plan, procedural risk for the employer and your position in the labor market.

Timeline after redundancy declaration

Immediately: Do not sign any documents without legal advice. Have your situation assessed.

Week 1-2: Analysis of the redundancy declaration, reflection principle application and redeployment efforts.

Week 2-4: Negotiation of departure terms or preparation for UWV procedure.

After agreement: Review of settlement agreement on all points. Signing with preservation of cooling-off period.

Social plan

In larger reorganizations, a social plan is often drawn up. A social plan is not legally mandatory but typically contains additional arrangements beyond statutory rights, such as enhanced severance, outplacement or retraining. Verify whether a social plan applies to your situation.