News

Reorganization: new rules published by UWV (Employee Insurance Agency)

September 2020 – Barbara Spliet

UWV has published new implementation rules on redundancy. These rules are effective as of 1 September 2020. The major changes over the former rules are the following:

1. Prohibition against termination of employment and termination of operations

UWV does not grant the employer permission to terminate the employment agreement, if a so-called “during” prohibition is effective. Examples are “during” sickness or pregnancy. However, a “during” prohibition does not apply, if the operations of the undertaking are ceased. In the new Implementation Rules this has been further specified. For instance, the undertaking does not actually have to be fully terminated. There can be, so UWV explains, quite a long period between the undertaking ending its activities and actual cessation of operations for tax reasons or because pension funds are still held by the undertaking.

2. End of transitory compensation bridging scheme

The Dutch Act on Employment and Job Security (WWZ) included a temporary bridging scheme for a transitory compensation for small companies having to downsize by reason of poor financial circumstances. A different calculation (more favorable to the employer) applied to them for the transitory compensation. As of 1 January 2020, this temporary bridging scheme has ended and consequently also the relevant provisions laid down in the Implementation Rules.

3. Public Employers

By implementing the Dutch Act on Normalization of the Legal Status of Civil Servants (WNRA) several adjustments were made to the Implementing Rules, e.g. a public employer should give insight into whether a redundancy is the outcome of a democratically taken decision, or not. If so, such a decision will not be reviewed when assessing the legitimate ground for the reorganisation. A listing of what companies should be considered public employers is included as well.
Furthermore it is explained that if an undertaking is part of a group, the employer should also take into consideration relocation options at other members of the group, however public legal entities are not part of such a group.
Finally, it is explained how the duration of the employment is calculated, if an employee worked as a cival servant before 1 January 2020. In that case, the periods of the appointment as civil servant and the employment agreement are aggregated.

Please click here [link is https://www.uwv.nl/werkgevers/overige-onderwerpen/achtergrondinformatie-ontslag-via-uwv/detail/uitvoeringsregels-bedrijfseconomische-redenen] for the latest version of the UWV Implementation Rules.

Barbara Spliet

Partner/lawyer