A collective dismissal occurs when at least 20 employees are dismissed for economic reasons within three months at a department or branch of a company. In that case, a social plan is often drawn up. Read more about the social plan below.
What is a social plan?
A social plan is a document that describes the provisions offered to employees in the event of collective redundancy. The social plan regulates all the conditions relating to the dismissal of employees, from financial compensation to the establishment of other provisions such as assistance in finding alternative work.
What requirements must a social plan meet?
In principle, there are no obligations regarding the content of a social plan. Sometimes a social plan only covers a few pages and other times it is a thick book. Things that almost always return in a social plan are:
– The reflection principle and the disappearance of jobs. Read more about it here .
– Explanation of how the employer will help the redundant employee internally to find a new job. This is an important part of the social plan. It is not the intention that an employer can simply dismiss staff; it must be ensured that they can quickly find new work. This can be internal or external. The employer will first try to find a suitable position internally or at a related company. The position must therefore match the knowledge, skills and salary of the current position. The employer can also help with the external placement of its employees. If this does not work or the employee refuses the suitable position, dismissal will still follow.
– External support through outplacement. The employee who becomes redundant can often receive help from an outplacement agency in finding a new job. Through an outplacement program you will be helped with personality tests, searching for vacancies and job application training. This guidance is often reimbursed by an employer and this is then stated in the social plan. An extensive outplacement process often takes six months or longer and often costs around EUR 5,000-6,000. In this way, your employer helps you increase your chances of finding a new job.
– The amount of the severance payment: more about this later.
Who draws up a social plan?
The employer takes the initiative to draw up a social plan. The employer also decides whether trade unions and the works council will be involved in completing the social plan. A social plan that has been drawn up with input from both trade unions and the works council usually has more authority and value than a plan that lacks this involvement. Trade unions play an active role in reorganisations, especially when they have strong representation among employees. They negotiate on behalf of employees to obtain favorable conditions in the social plan. When trade unions are involved, the social plan becomes binding. This means that employees will have to adhere to the social plan. If procedures are to be conducted in the subdistrict court, this will often not deviate from the social plan in the case of a social plan with binding effect. It is therefore also to the advantage of the employer that the trade unions are involved. Some collective labor agreements also require the involvement of the unions in drawing up a social plan.
A social plan that has been drawn up without coordination with trade unions has no binding effect. Such a plan has less support among the subdistrict court.
Social plan and settlement agreement
When an employee is dismissed as a result of the social plan, this dismissal is usually arranged for each individual employee via a settlement agreement. This agreement records the agreements as agreed in the social plan. However, it is essential that employees have this agreement assessed before they agree. In doing so, they must pay attention to whether the severance payment has been calculated correctly, whether the notice period is sufficient, whether the employee is entitled to unemployment benefits, etc. It is important to have the settlement agreement checked by a lawyer before you sign it. In almost all cases, the social plan stipulates that the employer will reimburse the legal costs for having the settlement agreement checked.
If you sign the settlement agreement, you cannot in principle return to it later if, for example, it turns out that not all wage components have been included in the calculation of the transition payment. Unfortunately, we see this happen too often. Now that a legal budget is almost always arranged, it is better to be safe than sorry and it is wise to outsource the audit of the settlement agreement to a lawyer. Have you received a settlement agreement? Respond here for a free and quick check of the settlement agreement by Brons Legal Dismissal Law.
Social plan: transition compensation
There are no fixed rules about the amount of severance pay in the event of a collective dismissal and social plan. The compensation in a social plan is usually higher as the employer is in a better financial position. In general, the compensation described in a social plan is also (slightly) higher than when an employer arranges dismissal for business reasons through the UWV. The social plan often includes a severance payment of about 1.5 to 2 times the transition payment. A quick signing bonus is also often offered if you want to sign the settlement agreement quickly.
The voluntary departure scheme
Many social plans have a voluntary severance scheme. Suppose you can remain employed by your employer on the basis of the reflection principle , but you would actually like to leave. You can then request to make room for an employee who is eligible for dismissal. It is up to the employer to determine whether he agrees to this request. You will usually not receive a higher severance payment for your good will, so you will have to take the severance payment into account in the social plan.
Social plan example
Below you will find a link to the most recent social plans of (large) companies, with answers to the most frequently asked questions. See the links for an example social plan in case of reorganization.
Not signing a settlement agreement? Then dismissal via UWV
If you decide not to sign the settlement agreement, the employer must apply for a permit for dismissal from the UWV for business economic reasons. This could be an option if you do not agree with the dismissal and have good reasons to believe that your dismissal is not justified. The employer must then submit extensive substantiation to the UWV stating the reason for the dismissal and a (financial) substantiation. Keep in mind that if your employer receives a permit from the UWV for dismissal for business reasons, this is often disadvantageous compared to signing a settlement agreement. The social plan often offers a higher severance payment. For this reason, many employees opt for dismissal through a settlement agreement. In that case, your employer no longer has to go to the UWV for a dismissal permit.
Are you dealing with a collective dismissal and have you received a settlement agreement?
Have your settlement agreement checked for free by Brons Legal Dismissal Law. Brons Legal Dismissal Law only helps employees and is therefore on your side! We are happy to help you with a thorough check of all parts of the settlement agreement and ensure that you are sure that you are getting what you are entitled to. upon your discharge. Contact us immediately and speak to an experienced dismissal lawyer about your situation without obligation.
FAQ Social Plan
Frequently Asked Questions
What counts as a “collective dismissal” under Dutch law?
A dismissal is considered collective when an employer intends to terminate the employment contracts of 20 or more employees within a period of three months in the same business area.
In those cases the employer must notify the UWV and trade unions.
Is a social plan mandatory when there is a collective dismissal?
While there is no absolute legal obligation to always have a social plan, it is strongly expected in cases of large reorganisations or collective dismissals and typically included in negotiations with trade unions or works councils.
The article by Brons Legal discusses how in practice a social plan often accompanies collective dismissal procedures.
What must a social plan cover in the context of collective dismissals?
A social plan should include agreements on:
- The reason and scope of the reorganistaion or dismissal
- Severance/transition payments beyond statutory minimums
- Support measures (outplacement, retraining, job-search assistance)
- Criteria for how employees are selected for dismissal, and possibly priority for internal vacancies
What is the role of the UWV when collective dismissals are involved?
The UWV must be notified when 20 or more employees are to be dismissed within three months in the same area.
The UWV assesses whether the employer’s request complies with legal grounds (economics, reorganisation) and procedures like the “reflection principle”.
How are employees protected during this process?
Employees have several protections:
- The employer must explore alternatives to dismissal (transfer, retraining) before moving ahead.
- There are special protections for employees who are ill, pregnant, on parental leave, works-council members, etc.
- The employer must consult trade unions or works councils and provide information about the plan’s impact.
What happens if the correct procedures are not followed?
If the employer fails to notify the UWV or follow the collective dismissal rules, the dismissal may be invalidated or the employee(s) may receive fair compensation.
Also, if the social plan is inadequate or not negotiated when expected, this may weaken the employer’s position or lead to disputes. (As discussed in the article)
