A dismissal for economic reasons may be considered if your company needs to reorganize because of a reduction in orders, disappointing results, business or organizational reasons or termination of (part of) the business.
Conditions redundancy procedure
A dismissal for economic reasons needs to comply with the following conditions.
- It is important you can prove that the dismissal is for business economic or organizational reasons.
- One cannot arbitrarily decide which employee is eligible for dismissal. Employees with interchangeable jobs are brought into age groups. The employee with fewest years in service in his age group is eligible for dismissal (“balance principle”). The overall age diversity within the interchangeable job groups needs to remain in tact as good as possible.
- You must prove that there are no suitable jobs within the company (and group) for the employees eligible for dismissal.
If you are contemplating to reorganize your company, it may be wise to agree upon a social plan with the unions or the works council. The social plan is used to outline how the reorganization will be implemented and what arrangements for the employees concerned will be made.
To make the reorganization as successful as possible we advise you to obtain expert advice from an employment lawyer as soon as possible.