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Amendment of the Collective Redundancy Notification Act

March 2012 - Employment. Legal Developments by Kennedy Van der Laan.

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On 1 March 2012 the Collective Redundancy Notification Act (Wet Melding Collective Outslug, "WACO") will be amended. What changes does this involve?

Termination Agreements Counted In when Deciding Number of Redundancies
At present, an employer who wishes to 'make an end to' the employment of 20 employees or more working within one territory on commercial grounds, must report this to the UWV WERKbedrijf and to the representative trade unions. Terminations by mutual consent, however, are not included in the calculation at present. Under the amended act such terminations will also be counted in.

All Petitions for Rescission Counted In
All petitions for rescission are counted in. At the moment, the rule still applies that petitions for rescission only count in if there are more than five; this rule will be repealed. The amended Act further provides that the Subdistrict Court, when assessing a petition for rescission on commercial grounds (e.g. redundancy), has to ascertain whether the WMCO applies. If it does, the employer will have to prove that he has fulfilled his obligations under the WMCO. If the employer has not fulfilled these obligations, the court will not rescind the employment agreement.

Reporting to Trade Unions no Longer Suffices; Consultation Required
Under the new Act, the trade unions must actually be consulted rather than just informed. This is only different if the trade unions expressly waive their right to be consulted in writing. Furthermore, the UWV may decide not to apply the obligation to consult if this would jeopardize the re-employment of the employees threatened with redundancy, or the employment opportunities of the other employees. Consultation does not imply that it is also necessary to reach agreement about the projected collective redundancy and the supporting policy.

The employer is deemed to have fulfilled his obligation to consult the trade unions if the trade unions do not accept a written invitation for consultation, provided that this invitation was received by the trade unions at least two weeks before the proposed date of consultation, or if the trade unions have declared in writing to waive their right to be consulted.

Sanction
At present, the sanction for non-compliance with the obligations in the WMCO is that the UWV will not consider the applications for dismissal until the employer has fulfilled his obligations. Under the new Act, the employee will be able to nullify the termination of the employment agreement by notice given or by a termination agreement, if the employer has not complied with the obligation to report or to consult. Within six months after the notice was given or the termination agreement was concluded, the employee may rely on this ground for nullification. If the notice given is successfully nullified, the employee remains employed with retroactive effect, and may bring an action for back wages plus statutory interest and increase. So, suppose an employer has to lay off employees due to economic circumstances, and he concludes a termination agreement to that end with ten employees. A month later, the employer applies again for dismissal permits due to economic circumstances for another ten employees, without consulting the trade unions. In that case, the ten termination agreements may be nullified by the employees and the procedure to obtain the ten dismissal permits will be halted until the employer has fulfilled his obligations.

No Retroactive Effect
The legislative change will enter into force on 1 March 2012. Notices and termination agreements dating from before 1 March 2012 will not be counted in – even if the actual termination date is after 1 March 2012 – for purposes of the numerical criterion of 20 employees.

Tips

  • Alertness is in order for companies with several branches, because all redundancies on commercial grounds within three months within an UWV territory are counted in.
  • Termination agreements and all (formal) rescissions are counted in for purposes of the numerical criterion of 20 redundancies.
  • Consult the trade unions in good time and put everything down in writing. So if trade unions are not interested in consultations, let them put this down in writing.
  • Consultation means deliberation, not agreement; in other words, the consent of the trade unions is not required.

For more information please visit www.kvdl.nl

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