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Global Employment briefing: Netherlands, October 2018

  • Netherlands
  • Employment law


New official guidance on the duty to reassign employees affected by business-economic dismissals has been issued, but complexity remains for international employers.

New operational rules regarding dismissals for business-economic purposes

As of 1 August 2018 the new operational rules of the Dutch Employee Insurance Agency (the ‘UWV’) have entered into force. With these rules the UWV has tried to clarify the way they process applications for dismissal permits based on business-economic reasons. One of the most helpful additions to the previous operational rules is how the UWV processes these applications when it involves a company operating internationally or a group of companies. One of the elements of the dismissal permit is that the employer has a duty to try to reassign an employee whose position has become redundant due to business-economic reasons (the ‘Reassignment Duty’). The general Reassignment Duty and international aspects of the Reassignment Duty as explained in the UWV’s operational rules are set out below.

General Reassignment Duty

The Dutch Civil Code stipulates that the employer may only dismiss an employee if there is a reasonable ground for dismissal and the duty to try to reassign the employee within a reasonable period of time (the ‘RPT’) has been fulfilled. The RPT is equal to the notice period which is applicable to the relevant employee. The RPT starts running from the day on which the UWV issues a decision regarding the dismissal permit. Please note that the Reassignment Duty starts running before the RPT starts running, namely from the day on which the employer becomes aware of the (upcoming) redundancy of the employee.

In case of a reorganization, the reasonable ground would be (a) business-economic reason(s). The employer shall subsequently try to reassign the employee in a vacant position which is interchangeable with their current position or in an entirely different position. In practice, this means either offering the employee a suitable position or drawing their attention to vacant positions and giving them the opportunity to apply with a transparent and thorough application process. The term ‘vacant position’ includes all current vacant positions and positions that will become vacant within the RPT, including not only positions in the company but also those in the group. Another group of positions that fall within the definition of ‘vacant position’ is the group consisting of temporary workers, employees of a pensionable age and pseudo self-employed persons (schijnzelfstandigen); the so-called ‘plaatsmakers’ (employees who shall ‘make place’ for redundant employees). When trying to reassign the employee to a position which is not interchangeable with their own, the employer has to determine whether or not this employee is suitable for this position. If the employee’s skills, knowledge and experience do not qualify them for the position and this cannot be changed within the RPT by offering the employee education, the employer may come to the conclusion that there are no suitable vacant positions for the employee.

Only when the employer has fulfilled the Reassignment Duty and the employer has provided documents to substantiate that all appropriate steps in the Reassignment Duty have been taken, shall the UWV issue a permit to dismiss the employee.

International aspects of the Reassignment Duty

In companies that operate internationally , it may be difficult to put together a global list of all vacant positions. To effectively go about this task, the UWV suggests that the employer and employee plan a so called ‘reassignment meeting’, which in our opinion does not have to be a physical ‘meeting’. This way, the employer will be aware of the kinds of positions which the employee is open to, thus narrowing the search grid. Criteria such as the preferences and limits regarding location, salary and company division can be discussed during this meeting. In order for the UWV to verify the adequacy of this process, the employer is required to attach a list of vacant positions in the international organization which fall within the limits which the employee has set during the reassignment meeting.

In conclusion

The new guidelines from the UWV have provided further clarity for employers who are preparing for a reorganization. However for companies operating on an international scale this process is still complex.