Facing redundancy in the Netherlands can be a challenging experience for employers and employees. We provide advice and guidance with regards to the dismissal proceedings with the UWV as well as negotiating a settlement agreement.
The requirements for redundancy
An employer may decide to make an employee’s role redundant due to economic, organizational or operational reasons. Common causes include company restructuring, financial difficulties or technological advancements making certain positions unnecessary.
In the Netherlands, an employer must seek permission from the Employee Insurance Agency (UWV) before terminating the employment contract with the redundant employee. Strict rules apply, including:
- Necessity: There must be economic, organizational or operational reasons, requiring the redundancy of the employee’s role.
- Fair selection process: The employer must follow the ‘reflection principle’ when selecting the employee(s) that become redundant to ensure fairness in the selection process.
- Redeployment opportunities: The employer has an obligation to assess whether redeployment in a suitable position is possible, with or without training. A suitable position is considered to be a position that matches the employee’s experience, education and capacities. An active involvement is expected from the employer.
Compensation
If the aforementioned requirements have been met, the UWV will grant permission for the termination. The employee is entitled to a statutory transition payment amounting to 1/3 of the employee’s salary for each year of service (or a prorated part thereof). The statutory transition payment is capped at € 98,000 (2025) or the employee’s annual salary, whichever is higher.
Settlement Agreement
Before filing a dismissal request with the UWV, employers often provide the employee with a settlement agreement to avoid a time-consuming and expensive process. More information about a Settlement Agreement can be found here.
Contact us
Do you need assistance? We would be happy to provide you with legal advice and guide you through the process. You can contact us by using our contact form below or by sending an email to info@noordamadvocatuur.nl. All information you share with us will be treated strictly confidential.