Specialists in reorganizations for employees

The social plan in a reorganization

A social plan often determines what you receive in a reorganization: your compensation, support in finding new work and the terms on which you leave. Whether the plan binds you, and whether more is possible, is not always what it seems.

What is a social plan?

This page explains the social plan (sociaal plan) under Dutch employment law, for employees who work in the Netherlands, including highly skilled migrants and other internationals. A social plan is a package of arrangements about the consequences of a reorganization for employees. It covers, for example, the compensation, the support towards other work and the order in which positions are cut.

Not a legal obligation

Your employer is not legally obliged to draw up a social plan. In many larger reorganizations one is agreed anyway, because the consequences are then negotiated with trade unions or the works council.

If there is no social plan, you fall back on your statutory rights, such as the transition payment and your employer's obligation to seek reassignment.

Who agrees it?

A social plan is often agreed with trade unions. In addition, an employer can make arrangements with the works council or draw up a social plan itself. Who sat at the table largely determines whether the plan binds you personally. We discuss that difference below.

In brief

  • Sets compensation, support and terms in a reorganization
  • Not legally required, but common in larger reorganizations
  • Agreed with trade unions and/or the works council
  • Whether it binds you depends on who agreed it
  • Often a starting point, not always the maximum
  • Have your options assessed before you sign anything

What a social plan contains

The content differs from plan to plan. The following elements often recur and together determine what your departure yields.

Compensation

Usually a severance payment, often calculated as a factor on top of the statutory transition payment. The amount and the calculation vary considerably from plan to plan.

From work to work

Support towards other work, such as outplacement, a training budget or help in finding a suitable position inside or outside the company.

Voluntary departure

A voluntary departure arrangement, or a place-maker arrangement in which you voluntarily make way for a redundant colleague. These can seem attractive, but the compensation is sometimes lower and the effect on any unemployment benefit (WW) deserves attention.

Hardship clause

A hardship clause makes it possible to depart from the social plan in exceptional personal situations. There is often also an advisory or appeals committee where you can put your situation forward.

Are you bound by the social plan?

This is the most important question, and the answer determines your room to negotiate. Whether a social plan binds you depends on who agreed it and on your own situation.

Agreed with trade unions

If the plan is agreed with one or more trade unions, it may have the status of a collective labour agreement (CAO). If you are a member of a union involved, it applies to you directly in principle. Even if you are not a member, you may be bound by it, for example through a reference to the CAO in your employment contract (an incorporation clause), a provision that has been declared universally binding, or other contractual arrangements.

Agreed with the works council

If the plan is agreed only with the works council or drawn up unilaterally by your employer, it does not bind you automatically in principle. The works council cannot lay down arrangements about your employment terms on your behalf. You then record your own departure in a settlement agreement, and that is something you can negotiate.

Even a plan that does not formally bind you can carry weight in certain circumstances. Whether there is room for a better arrangement depends on your situation. That is precisely why it pays to have this assessed before you sign anything.

Why this matters

  • Bound by a CAO: less room, but clear rights
  • Not bound: you sign yourself, so often more room to negotiate
  • Many employees wrongly think they simply have to agree
  • A hardship clause can create room even within a binding plan
  • First have it established whether and how you are bound

A social plan is often a floor, not a ceiling

The amount in the plan is not always the maximum, and may under conditions differ from the statutory transition payment. Both sides deserve a check.

Your statutory transition payment

In a dismissal for business economic reasons you are in principle entitled to the statutory transition payment (Article 7:673 of the Dutch Civil Code, BW). A social plan often adds something on top, for example an extra factor, from-work-to-work support or a training budget.

Watch the replacement of the transition payment

A social plan that qualifies as a CAO may, under conditions, put another provision in place of the statutory transition payment (Article 7:673b BW). Since 1 January 2020 that provision need not be equal to the amount of the transition payment, and the value of, for example, support or training may be set off against it. It is therefore not a given that you receive the full amount you would be entitled to without a plan.

Room for a better arrangement

If you are not strictly bound by the plan, there may be room to agree a better individual arrangement. And even within a binding plan, a hardship clause can offer a solution where your situation is exceptional, for example due to illness, care responsibilities or your position on the labour market.

Where value can be gained

  • Does the calculation of your compensation match your service and salary?
  • Has the transition payment been validly replaced by another provision?
  • Is the support concrete, or does it remain a promise?
  • Does the voluntary arrangement suit your situation and your WW?
  • Can you rely on the hardship clause?

What you can do now

If you are faced with a social plan, it is wise to take the steps below before you sign anything. The sooner you know your position, the more room there is.

  • Ask for the full text of the social plan and its annexes
  • Find out with whom it was agreed and whether you are strictly bound by it
  • Check the calculation of your compensation against your length of service and salary
  • See whether the support, training and notice period are concretely laid down
  • Do not sign a settlement agreement without having the plan and your own situation assessed

We assess whether the social plan applies to you, whether you are receiving what you are entitled to and whether there is room for a better arrangement. If it concerns a larger reorganization that falls under the rules on collective dismissal, we also look at the reflection principle and the reassignment. Please feel free to contact us to discuss your situation.

Frequently asked questions

Do I have to sign the social plan?
Not without more. You often only record your departure in a settlement agreement, which you can have assessed. Whether you are bound by the plan depends on who agreed it.

Can I get more than the plan offers?
That is possible, depending on your situation and whether you are strictly bound. A hardship clause or an individual arrangement can create room.

Do I receive the transition payment on top of the plan?
That depends on the content of the social plan. Usually the compensation in the plan is also intended as the transition payment, and a plan that qualifies as a CAO may, under conditions, put another provision in its place. A check is worthwhile.

What if there is no social plan?
Then your statutory rights apply, such as the transition payment, the obligation to seek reassignment and the rules on collective dismissal.

Received a settlement agreement? Get a free review.

Upload your agreement and we will assess your situation, free and without obligation. On business days we respond within 1 hour. Your legal fees are usually covered by your employer.

Start free review