COLLECTIVE DISMISSAL/REDUNDANCY

Termination of the contract of employment by the employer affecting a group of employees at the same time, usually as a consequence of reorganization, merger, cutbacks or bankruptcy . Under the Notification of Redundancy Act (1976), any employer in the Netherlands who is proposing to dismiss more than 20 employees within a period of three months is required to send notification of that intention, stating the reasons, to the Director of the District Employment Services Authority and to the relevant trade unions, and must also consult the works council. The Director must then allow one month to elapse before processing the employer's applications for permission to terminate employment in respect of the individual employees concerned. This gives time to explore the possibilities of reducing or averting the imminent unemployment by means of labour-market policy measures.

In addition to notifying the relevant unions, the employer must also invite them to participate in consultation on the matter. The outcome of this consultation, for example the fact of whether or not a severance payment has been arranged, may influence the Director in granting authorization for the dismissals. In cases of bankruptcy, the one-month waiting period and the obligation to consult with the unions are waived.

The Notification of Redundancy Act came into being in implementation of the EC Directive on redundancy.