In the Netherlands, there are several grounds on the basis of which an employer can dismiss an employee. One of those grounds is a dismissal based on business economic reasons. An employer needs to request permission for such a dismissal at the Employment Insurance Agency (UWV). In this blog, we briefly explain what business economic reasons are under Dutch Law. Thereafter, we discuss how the UWV assesses these types of dismissal requests and what your options are as an employee.
What are business economic reasons under the Dutch Law?
There are different business economic reasons that can justify a dismissal. The most common examples are:
- poor financial situation of the employer;
- structural reduction in work or turnover within the employer’s organization;
- organizational reasons (for example reorganizations); and
- termination of (part of) the activities of the employer.
How does the dismissal request procedure go at the UWV?
The employer has to fill in three forms: A, B and C. These forms must be forwarded to the UWV. An employer can decide to only send form A and ask the UWV for an extension of 14 days to negotiate with the employee for a possible settlement agreement. After receiving the dismissal request, the UWV first sends a letter with the copy of the employer’s request to the employee. In the letter, the UWV sets a term of two weeks. This term is either for the employee to submit a rebuttal or an extension for the employer to complete the dismissal request. If the employee does not submit a rebuttal within the term, the UWV will base her decision on the employer’s information. This is the so-called ‘first round’ of the dismissal request procedure.
If the employee does submit a rebuttal within the term, the UWV can set a new term for the employer to reply to the rebuttal. After that, the employee can once again submit reasons as to why the dismissal request should be denied. This is the ‘second round’ of the dismissal request procedure. In total, there can be three rounds at the UWV for this procedure. Each party has a term of seven days during the second and third round. If the UWV considers that she has all the necessary information, she will render a decision within four weeks. If the UWV grants the permission for dismissal,
In any case, the UWV looks at whether all the legal requirements for a dismissal on business economic reasons are met. These are the following:
- there must be one or more business economic reasons;
- the employer must follow the reflection principle;
- the employer must demonstrate that reassignment of the employee to another position within a reasonable timeframe, with or without training, is not feasible.
What are your options as an employee?
As stated above, it is possible that you and your employer negotiate a settlement agreement. It is also possible that you, as an employee, a rebuttal to the dismissal request. After the UWV has rendered a decision, both the employer and employee can initiate an appeal procedure at the subdistrict court. The court will reassess the case and pay attention to what the UWV has said in her decision. Although the aforementioned requirements seem to be straightforward, this is not the case in practice. There is an abundance of case-law on the topic of dismissals on the basis of business economic reasons. The court may rule differently than the UWV or not.
Since the terms of the UWV procedure are relatively short and the dismissal case can be complex, it is recommended to assign a lawyer. Especially since the dismissal request procedure may have three rounds. A lawyer can advise you throughout the procedure, including the appeal procedure and/or act as your legal representative.
If you have any questions about dismissal (requests) on the basis of business economic reasons after reading this blog, please feel free to contact our office via telephone number 030 230 0230 or e-mail at: info@amice-advocaten.nl