Collective Layoffs in the Netherlands

What a collective layoff means for you

When your employer dismisses twenty or more employees within the same UWV work area within a period of three months, this constitutes a collective layoff. The Collective Redundancy Notification Act (Wet Melding Collectief Ontslag, or WMCO) then imposes additional obligations on your employer beyond standard dismissal law.

During a collective layoff, your employer must notify UWV and the relevant trade unions of the intended dismissals. A waiting period of at least one month applies, intended to give trade unions the opportunity to consult with the employer about alternatives and about the terms of a social plan.

When counting toward the threshold of twenty employees, all forms of employer-initiated termination are included, including terminations through settlement agreements. Only dismissals for economic reasons count — dismissals on personal grounds are excluded.

For you as an individual employee, this means additional safeguards apply. But it also means you are not solely dependent on what is agreed collectively: depending on the circumstances, individual negotiation may yield additional arrangements.

Additional protection during collective layoffs

Notification to UWV and trade unions required
Minimum one-month waiting period
Works council must be consulted
Social plan with additional arrangements
Reflection principle must be correctly applied
Redeployment obligation remains mandatory
Possibility to invoke voidability if WMCO not followed

The WMCO procedure and what it means for you

Notification and waiting period

Your employer must simultaneously notify UWV and the trade unions. After notification, a waiting period of at least one month applies. During this period, UWV will not process individual dismissal applications. The waiting period gives unions the opportunity to negotiate a social plan.

The social plan

During collective layoffs, a social plan is usually drawn up in consultation with trade unions. A social plan contains additional arrangements beyond statutory rights: a severance formula, outplacement, retraining and job-to-job guidance. The content varies per reorganization and depends on the employer's financial position.

Individual negotiation

Even when a social plan applies, you can often negotiate individual terms. A social plan is not automatically binding on individual employees unless registered as a collective labor agreement. Your personal circumstances — such as age, years of service, labor market position or specific additional costs — may justify deviation from the standard package.

Hardship clause

Many social plans include a hardship clause for employees who are disproportionately affected by the standard arrangement. This applies to older employees with long tenure, employees with limited labor market prospects or employees with specific personal circumstances. If the social plan does not do justice to your situation, it is worth investigating whether the hardship clause applies to you.

WMCO non-compliance

What if the employer does not follow the rules?

If your employer fails to comply with WMCO obligations — no notification to UWV, no consultation with trade unions, no waiting period observed — this can have far-reaching consequences.

You can invoke the voidability of the dismissal within six months. This can lead to the employment contract being revived and salary claims arising.

UWV will generally not process individual dismissal applications until the WMCO obligations have been met. This applies to both the notification requirement and the consultation obligation.

Checking whether your employer has correctly complied with the WMCO is therefore one of the first steps we take during a collective layoff.

The role of the works council

In addition to WMCO obligations, the works council has advisory rights on reorganization and collective layoff decisions. The employer must submit the intended decision to the works council for advice.

If the employer makes the decision without works council advice, or deviates without adequate justification, the works council can appeal to the Enterprise Chamber. The Enterprise Chamber can require the employer to withdraw or suspend the decision.

For you as an individual employee, it is relevant to know whether the works council was consulted and what the advice was. If the works council advised negatively and the employer proceeds anyway, this can strengthen your individual negotiating position.

Your transition payment during collective layoffs

Every employee dismissed in a collective layoff is entitled to the statutory transition payment: one-third of a gross monthly salary per year of service. The calculation also includes variable salary components, such as the average of bonuses over the past three years, holiday allowance and a fixed year-end bonus.

If a social plan applies, the severance in the social plan may exceed the statutory transition payment. Whether there is individual room for a higher payment depends on your personal circumstances and the procedural risk for the employer.

The settlement agreement during collective layoffs

In many cases, the employer offers a settlement agreement (vaststellingsovereenkomst) during a collective layoff. You are not obligated to sign. After signing, you have a 14-day statutory cooling-off period (21 days if the employer does not inform you in writing about the cooling-off period).

It is essential that the VSO is correctly drafted to protect your WW (unemployment benefit) rights. The agreement must show that the initiative for termination came from the employer. The end date must account for the applicable notice period to avoid a gap in your income.

Always have the settlement agreement reviewed by a legal professional, even if the offer appears reasonable at first glance. Employers regularly offer a contribution towards legal costs as part of the VSO.

What you should do during a collective layoff

During a collective layoff, it is important not to go along with the employer's rush. Take the time to have your position assessed. The combination of the WMCO and standard dismissal law provides employees with additional protection during collective layoffs. ReorgLegal assesses your situation and advises you on the possibilities and room for negotiation.

Your employer announces a collective layoff