Dismissal Due to Reorganisation: What Does It Mean and What Next?

An employee loses their job because of structural changes within the company, such as the elimination of roles or the merging of departments, in other words a reorganisation. This often happens as a result of financial reasons, changing market conditions or a change of strategy. In the case of a reorganisation, the employer is obliged to act carefully in accordance with Dutch legislation and regulations. This article explains exactly what dismissal due to reorganisation involves, what rights and obligations exist, and how outplacement can offer support in this situation.

Why do reorganisations take place?

Reorganisations occur regularly within Dutch organisations. Companies opt for a reorganisation to cut costs, work more efficiently or respond to changes in the market. Sometimes it is necessary to part ways with staff because certain roles disappear or are merged. This can be far-reaching for both employers and employees. For employees it often means uncertainty about their future. Employers must handle the interests of their staff carefully and comply with the legislation.

Suppose an IT company decides to start working with new software, which makes certain support roles redundant. Employees in those roles are declared redundant (boventallig verklaard) and become eligible for dismissal due to reorganisation. This process must always run objectively and transparently, with clear criteria for selection.

For a detailed explanation of the concept of being declared redundant (boventallig verklaard) and what that means for the employee, additional information can be found in the knowledge centre.

The legal basis of dismissal due to reorganisation

Dismissal due to reorganisation is strictly regulated in the Netherlands. The employer must demonstrate that there is a business-economic reason, such as a poor financial situation or an organisational change. A sound justification must be submitted to the UWV (the Dutch employee insurance agency) for this purpose. The selection of employees eligible for dismissal takes place according to the reflection principle (afspiegelingsbeginsel). This means that within a job category, the employees with the shortest length of service are affected first, unless exceptions apply.

The UWV assesses the dismissal request on the basis of these criteria. If it is approved, the employer may terminate the employment, observing the applicable notice period (opzegtermijn) and other statutory obligations. More about the notice period for a permanent contract can be found at Care4Careers.

In some cases, the employer and employee opt for a settlement agreement (vaststellingsovereenkomst, VSO), in which arrangements about the end of the employment are recorded. For an explanation of the settlement agreement, Care4Careers offers in-depth information.

Declared redundant: what does this mean in practice?

If you are declared redundant, this means that your role will cease to exist because of the reorganisation. You usually receive a written notification of this first, along with an explanation of the next steps. The employer is legally obliged to investigate whether reassignment within the organisation is possible, if necessary with retraining or guidance. Only when this proves unfeasible may dismissal be announced.

A common scenario is that, after an internal reassignment period, an employee still fails to find another suitable role. In that case, a process towards dismissal follows, and the question arises whether outplacement or guidance towards new work will be offered. For more details about what it means when your role disappears, an extensive article is available at Care4Careers.

The way in which the employer communicates about redundancy and the next steps largely determines how the process unfolds and how the employee experiences it. Transparency and timely information are essential here.

Employee rights in the event of dismissal due to reorganisation

As an employee in the Netherlands, you are well protected in the event of dismissal due to reorganisation. You are entitled to a transition payment (transitievergoeding) and, in many cases, to outplacement support. The transition payment is intended as financial support when looking for new work. The amount is calculated on the basis of your years of service and your gross monthly salary. More practical information about the transition payment provides insight into the calculation and the options.

In addition, the employer is obliged to investigate whether reassignment is possible. This means that the employer looks together with you at other suitable roles within the company or within the group. Only when it turns out that there is no existing or suitable role may dismissal take place. In some cases, guidance in the form of an outplacement programme is offered to ease the transition to a new job.

As an employee, you can object to the dismissal if you disagree with the reason or the procedure that was followed. This can be done, among other ways, through the objection procedure at the UWV or by going to the subdistrict court (kantonrechter). In that case, it is advisable to seek legal advice.

The role of outplacement in dismissal due to reorganisation

Outplacement is a programme in which you receive professional guidance in finding a new job outside the organisation. Employers often offer this as part of a social plan (sociaal plan), certainly in the case of larger reorganisations. An outplacement programme usually consists of career advice, application coaching and support in exploring the labour market. At Care4Careers, the emphasis is on personal guidance, tailored solutions and making the most of individual talents. More about the content and structure of what an outplacement programme is can be found in the knowledge centre.

Suppose an employee from the finance department becomes redundant because of a merger of departments. Through an outplacement programme, this employee discovers that their skills are also valuable in the healthcare sector. With guidance, a suitable new role is found, even though the job initially lies outside the original field of work. Programmes of this kind are practical and geared to the needs of the individual employee.

Offering outplacement is not a legal obligation, but it is customary in the Netherlands in the case of reorganisations. Employers opt for this to support employees and to conclude the process carefully. Would you like to know more about the question of whether outplacement is legally required and in which situations it is offered? Then take a look at the explanation from Care4Careers.

How an outplacement programme unfolds

An outplacement programme almost always begins with an intake interview in which the wishes and needs of the employee are mapped out. This is followed by a personal and labour market scan, which identifies skills, interests and opportunities on the labour market. On this basis, a tailored programme is put together, focusing on application training, CV advice and networking support. Throughout the programme there is regular contact with the outplacement coach, who acts as a sparring partner and motivator.

The programme lasts a few months on average, depending on the individual situation. You can read more about the duration of an outplacement programme at Care4Careers. Specialised guidance is also available for specific target groups, such as employees aged 50 and over. Information about outplacement for over-50s is available through the knowledge centre.

The success of an outplacement programme depends on the effort of the employee, the guidance and the current opportunities on the labour market. Practical guidance aimed at self-confidence and independence proves to be the most effective in practice.

Practical points of attention in reorganisation and dismissal

In the case of a reorganisation, it is important to gather information in good time and to actively enter into conversation with the employer. Ask for clarity about the social plan, the reassignment options and any guidance via outplacement. Record any arrangements made in writing, certainly with regard to the termination of the employment and its conditions. Consult the overview about the final settlement on dismissal for insight into financial matters such as holiday pay, outstanding leave days and the transition payment.

It can also be wise to seek legal advice, for example when assessing the settlement agreement. Make sure you are well aware of your rights and obligations, so that you are not caught out by surprises. In the knowledge centre on dismissal you will find practical information about the various aspects of dismissal, including dismissal due to reorganisation.

For tips on how to raise the subject of outplacement, the article how do I bring up outplacement? offers pointers for having the conversation with your employees.

The emotional and practical impact of dismissal due to reorganisation

Job loss due to reorganisation has not only practical consequences but also a major emotional impact. Uncertainty about the future, the loss of colleagues and the familiar working environment, and worries about financial stability are common. It is important to make space for these emotions and, where possible, to seek support from family, friends or professional guidance. You are not on your own: many people go through this situation at some point.

Besides dealing with emotions, it is good to get actively started on looking for new opportunities. An outplacement programme offers structure, something to hold on to and expert guidance during this period. Focus on your strengths, keep networking and make use of the available help, for example through outplacement coaching. By working step by step towards a new perspective, confidence in the future grows.

For people who are confronted with dismissal during illness, the knowledge centre offers an explanation of resigning during illness and the rights that apply in that case.

Summary

Dismissal due to reorganisation means that you lose your job because of structural changes within the company. Dutch law offers protection through the UWV process, the reflection principle and the right to a transition payment. Employers are obliged to follow careful procedures and often offer outplacement support to help employees make the transition to new work. It is important to be well informed about your rights and options, to record arrangements in writing and, where necessary, to seek professional guidance. With the right support and preparation, the step towards a new workplace can be taken successfully.

Does dismissal due to reorganisation coincide with illness? Then a second track programme (spoor 2) may be mandatory.