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Collective Redundancy (Notification) Act (WMCO) amended as of 1 March 2012

Submitted By Firm: Boekel

Contact(s): Epke Spijkerman


Date Published: 3/29/2012

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On 1 March last, several amendments were made to the Collective Redundancy (Notification) Act (WMCO). Arranged terminations henceforth count in answering the question whether the WMCO is applicable. It is remarkable that an employee can undermine (annul ) a dismissal  by his/her employer or the termination agreement made with his/her employer  if the employer has not observed the provisions of the WMCO. The waiting month has also been changed.

The WMCO prescribes that an employer that wants to terminate the employment contracts (a) for economic reasons (b) within a period of three months (c) of at least 20 employees, (d) employed in a single work territory must notify the interested trade unions and the Employee Insurance Agency (UWV) of its plans. The purpose of the Act is to ensure that trade unions are involved in a timely manner in case of an intended collective redundancy and that the consequences for the employees can be discussed with them.

Twenty or more employees? Applications to set aside employment contracts and termination agreement count!
For the purposes of the WMCO three forms of termination on the employer's initiative are important:
1. termination with a permit from the UWV;
2.setting aside by the subdistrict court;
3. termination arranged by way of the termination agreement (settlement agreement) between the employer and employee.

Until 1 March settlement agreements did not count for the purposes of the WMCO, and setting aside by the subdistrict court counted only if there were five or more. This is now different. All setting aside and arranged terminations count in answering the question whether 20 or more employees are involved. In the notification to trade unions and the UWV, the employer must now also indicate the way in which it wants to terminate the employment contracts. Apart from that, since March 2012, the WMCO has had six work territories: 

  1. Friesland, Groningen and Drenthe;
  2. Overijssel and Gelderland;
  3. Noord-Brabant and Limburg;
  4. Zuid-Holland and Zeeland;
  5. Flevoland and Utrecht;
  6. Noord-Holland.

A different waiting month
Prior to 1 March, after the notification, the UWV waited a month before handling the applications for a dismissal permit. Consultations with the trade unions had to be held in that month. A different waiting month applies now. It does not follow clearly from the new text of the Act whether it is necessary for this purpose to keep to the termination date or to the act that effects the termination. Although the UWV may take a more employee-friendly position, we rely on the termination date and assume that for the purposes of the new Act, the employment contract:

  • cannot be terminated by the employer on a date earlier than a month after the notification;
  • cannot be set aside by the subdistrict court on a date earlier than a month after the notification; and
  • cannot be terminated by way of a termination agreement on a date earlier than a month after the notification.

This waiting month does not have to be observed if it is evident from a statement by the trade unions that they have been consulted and consent to the terminations.

The trade unions must be consulted
Unlike before 1 March, the employer now must actually have consulted with the trade unions before the UWV handles applications for permission to terminate the employment contracts. Prior to 1 March it was sufficient for this purpose that the trade unions were invited to consult. The trade unions, however, will not always be interested in consultations. That is why the WMCO provides that the employer has also complied with its duty to consult if the trade unions have stated in writing that they do not require consultation, or if the trade unions do not respond to the invitation to consult and the trade unions received the invitation at least two weeks before the proposed date. As proof of this, the invitation can best be sent recorded signed for. The obligation to consult does not of course entail that agreement must also be reached with the trade unions.

The duty of the UWV
The UWV (further) handles applications for permission to terminate employment contracts after it has received a statement from the employer showing that it has notified the trade unions and the works council of its plans and has consulted with them. In special circumstances the UWV can handle the applications without consultations having been held. This will be the case if the reassignment of the employees threatened with dismissal or the jobs of the other employees are jeopardized by the duty to consult.

Termination by the court
In determining the termination date, the court is also bound by the above-mentioned waiting month after notification of the trade unions and UWV. On receiving an application for termination, the court will therefore have to examine whether the WMCO is applicable and if so, whether the trade unions and works council have been notified and consulted. In the special circumstances mentioned above, the subdistrict court may terminate the employment contract without having observed the waiting month or without consultations having been held.

Please note: termination and settlement agreement can be annulled!
A new rule is that the employee can annul termination by the employer or the termination agreement within six months of the date of termination or conclusion of the termination agreement if his/her employer has not complied with the duty to notify and consult or has not observed the waiting month. An employer that first dismisses five employees and then another fifteen within three months runs the risk that the first five employees will annul their dismissal because the WMCO subsequently proves to be applicable and the employer probably did not apply it at the time. This can result in a substantial delay if, for example, it appears that an advisory process will still have to be gone through with the works council. This risk can be limited if the employment contract is terminated (pro forma) by the subdistrict court. The possibility of annulment does not apply to the order for termination. Under certain circumstances it is therefore advisable to choose termination proceedings. 

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