The works council in the event of collective dismissals plays a crucial role in the protection of employees and in decision-making within a company. Employers who want to dismiss staff for business reasons must not only inform the UWV, but also consult the works council (OR) in a timely manner. The employment law lawyers at Arslan Advocaten explain what the legal rules are, how the procedure works and what consequences non-compliance can have.
What is collective dismissal?
A collective dismissal occurs if an employer wants to dismiss at least 20 employees within one work area within three months. This falls under the Collective Dismissal Notification Act (Wmco). The purpose of this law is to protect employees, trade unions and the Works Council against sudden mass dismissals and to give them the opportunity to influence decision-making.
Obligation to report to the UWV and consult with the Works Council
Before an employer may implement a collective dismissal, he must report this to the UWV, the trade unions and the works council. The notification includes:
- The reasons for the dismissal;
- The number of employees involved;
- The positions that will be eliminated;
- The period in which the dismissals take place;
- The criteria for selection and redeployment.
Without notification to the Works Council or UWV, the dismissal is not legally valid. Employers who skip this step risk having the dismissal annulled by the court.
The role of the works council (OR)
The works council has a legal right to be advised on important decisions by the employer (Article 25 of the Works Council Act). works councils). This unmistakably includes a collective dismissal. The employer must therefore first submit the proposed decision in writing to the Works Council, with all relevant information.
What should the Works Council assess?
- The necessity of the dismissal (economic or organizational)
- The selected selection criteria for dismissed employees
- The measures to enable redeployment or training
- The social consequences for the staff and the social plan
The Works Council may then issue advice. The employer may only proceed with the dismissal after this advice has been issued and the one-month waiting period has expired. If he does so earlier, he is acting contrary to the law.
Right of advice and appeal to the Enterprise Chamber
If the employer ignores the advice of the Works Council, the Works Council can appeal to the Enterprise Chamber of the Amsterdam Court of Appeal. The Enterprise Chamber can suspend or annul the employer's decision if it is contrary to the principles of reasonableness and fairness.
The judge looks, among other things, at:
- The care of the decision-making;
- The substantiation of the business economic necessity;
- The involvement of the Works Council and employee representation;
- Any agreements in the social plan.
Social plan and negotiation with trade unions
In the event of a collective dismissal, a social plan is usually drawn up. This contains the agreements about reassignment, transition compensation, outplacement, training budgets and guidance to new work. The trade unions and works council often negotiate the content of this plan together with the employer.
A social plan is not legally required, but in practice it is essential. It shows that the employer takes his duty of care seriously and prevents lengthy legal proceedings.
Obligations of the employer
- Timely notification to UWV, Works Council and trade unions (at least one month before the dismissals)
- Consultation about alternatives to dismissal
- A written motivation of the business economic necessity
- Respecting the right to advice of the Works Council
- Compliance with the social plan
Consequences for non-compliance
If the employer violates the right of consultation of the Works Council or ignores the reporting obligation, this can lead to:
- Nullification of the dismissal decision by the court
- Fines imposed by the UWV
- Damage to reputation and unrest within the organization
- Additional costs due to reinstatement of employment relationships
Practical example
In a recent case, the judge ruled that an employer decision to reorganization had to be reversed because the works council had not been consulted in time. The company had already dismissed employees before the Works Council advice was issued. The judge found this to be contrary to the Wmco and required reinstatement of employment with payment of wages.
Frequently asked questions about the role of the Works Council in collective dismissals
What is the difference between the right to advice and the right of consent?
The right to advice means that the Works Council may give advice before a decision is made. The right of consent only applies to specific topics, such as working hours or working conditions. In the event of collective dismissals, the right to advice applies.
Can an employer ignore the advice of the Works Council?
Yes, but the Works Council can then appeal to the Enterprise Chamber within one month, which can suspend or annul the decision.
When does collective dismissal occur?
If an employer wants to dismiss twenty or more employees in the same work area within three months. This applies regardless of the size of the company.
What should be included in a social plan?
A social plan contains agreements about compensation, guidance and redeployment. This plan is often drawn up in consultation with trade unions and the Works Council.
Arslan Advocaten helps with collective dismissals
The employment law specialists of Arslan Advocaten guide employers and works councils through reorganizations and collective dismissals. We help with drawing up social plans, conducting consultations and complying with legal obligations. Would you like to know whether your company complies with the Wmco rules? Contact us for legal advice.