1. When can you dismiss staff as part of a reorganization?

If your business is facing financial difficulties or other challenges, sometimes a reorganization is the only solution. This may also mean laying off staff. However, this is only allowed if you can prove that there is a so-called commercial reason. Within a reorganization, we are mainly talking about the following circumstances:

  • A poor or worsening financial situation
  • Actual overstaffing due to work reduction
  • Organizational or technological changes that affect staffing needs
  • A company relocation that leads to the loss of jobs.

Dismissal on economic grounds must be carried out carefully and in accordance with a legal framework. Do you want to know how to do this properly? In our article you can read how you can gradually achieve a dismissal for economic reasons.

2. How do you start preparing for a reorganization?

Start with a clear understanding of why the reorganization is necessary. Identify the specific challenges or issues that are prompting the organization to consider this move.

Next, create a detailed reorganization plan. This includes an analysis of the current organizational structure, the proposed new structure, and the (economic) reasons for this change.

An effective reorganization plan not only serves as a roadmap for the process, but also helps create buy-in within the organization. It ensures that everyone, from employees to executives, understands what the changes are and why they are necessary. This promotes a smoother transition and minimizes potential resistance and conflict. In addition, the reorganization plan is also essential for obtaining any dismissal permits.

Are you curious about how to do this properly? In our in-depth article on the reorganization plan, we share practical insights on how to create an effective reorganization plan.

3. What are the legal requirements for a reorganization?

A reorganization requires strict compliance with legal standards and procedures. The main legal obligations are:

  • Determine the order of dismissal according to the reflection principle: The reflection principle applies when selecting employees for dismissal. The goal is to maintain a proportional representation of different age groups within each function group. Employees are classified according to age and years of service, with redundancies distributed in such a way that the age structure before and after the reorganization remains as similar as possible.
  • Reassignment of redundant employees: The employer has a duty to redeploy redundant employees, where possible, within the organization. View all available vacancies and the options for reassignment within your entire organization. This means that you are not only looking at the current department or location, but also at other departments or even other branches of your company. In our article on the reassignment obligation for employers, we explain how this works.
  • Approach to collective redundancies: If a reorganization leads to collective redundancies, which means that at least 20 employees are dismissed within a certain period of time (the exact period depends on the size of the company), there are additional obligations. For example, you are obliged to report the intended dismissal to the UWV. In addition, you must consult with the trade unions.
  • Role of the employee participation bodies: The works council (OR, ondernemingsraad) or employee representation (PVT) also play an important role. As an employer, you are obliged to inform these bodies in a timely manner and (sometimes) to consult them about the intended reorganization.
  • Notification to the UWV: In the event of dismissal on economic grounds, the employer must submit an application for dismissal to the UWV. The application must contain the economic reasons for the dismissal and demonstrate that reinstatement of the employees concerned is not possible.
  • Social plan: Although not required by law, a social plan (included redundancy scheme) drawn up in consultation with trade unions or participation bodies. This plan includes measures to mitigate the impact on the redundant workers, for example through retraining or financial compensation.

Proper compliance with these obligations ensures a legally correct execution of the reorganization, significantly reducing the risk of disputes and claims.

4. How long does a reorganization take on average?

Depending on the size and complexity of the reorganization, the duration varies from a few months to six months.  Generally, the process involves the following stages:

  1. Preparation phase: This can take anywhere from 1 to 3 months, depending on initial planning and strategic decision-making.
  2. Consultation with participation bodies and/or trade unions: This consultation can take between 1 and 4 months.
  3. Negotiating Termination Arrangements: This part takes about 1 month on average, during which agreements are made regarding the terms of the departure of employees.
  4. The UWV dismissal procedure: The procedure at the UWV can take 4 to 7 weeks, from application to decision.
  5. Termination of employment contracts: This follows after the UWV procedure.

For a detailed overview of what to expect in the event of a reorganization, including a comprehensive timeline that includes the required steps and the estimated time for each component, we have made a timeline for the reorganization process.

5. How do you involve employee participation in a reorganization?

In the event of a reorganization, it is essential to actively involve participation bodies, such as the works council (OR) and employee representative body (PVT).

Deployment of the Works Council

If your company has a Works Council, it is necessary to submit a detailed and written request for advice. This application must include the proposed decision, the reasons for the reorganization, and the expected impact on the employees, including any mitigating measures. In addition, it is important to make clear agreements about the handling of confidential information. You can find more information about this in our article about the request for advice from the Works Council.

Role of the PVT and PV

In the event that there is no Works Council within your organization, it is important to check whether you need to ask the PVT or PV for advice. Failure to involve these bodies in a timely or adequate manner may result in a rejection of your application for dismissal by the UWV.  We discuss this in more detail in our article on employee representation and staff meetings.

6. How do you determine which functions are interchangeable?

For a successful reorganization, it is important to understand the concept of ‘interchangeable functions’. Interchangeable positions are positions within an organization that are similar in terms of content, skills, and responsibilities. When determining interchangeability, you look at:

  • Job content: The tasks and responsibilities in both positions should be very similar.
  • Knowledge and skills required: The knowledge and skills required for the positions should be similar.
  • Competency level: Both positions should require a similar level of expertise and proficiency.
  • Remuneration: The positions must also be equivalent in terms of pay and other working conditions.

The correct identification of interchangeable positions is important for the smooth running of the reorganization process and in particular when making dismissal decisions. In our article on interchangeable functions, we explain step by step how to do this properly.

7. What should you do if there are no suitable positions available upon reassignment?

If there are no suitable positions available upon reassignment, you as an employer must take a number of steps:

  • Show that you are making an active effort: Demonstrate that you have made significant efforts to find suitable redeployment opportunities within your organization.
  • Consider retraining opportunities: Assess whether redeployment is feasible after offering targeted training or course to the employee.
  • Anticipate future job openings: Check to see if suitable positions will become available within your organization in the near future.
  • Explore alternative options: Research whether there are any temporary or flexible work positions that may be suitable for employee redeployment.

Curious how that works? In our article on the reassignment obligation for employers, we explain how this works.

8. How do you let your employees know that you are going to reorganize?

Communicating effectively about a reorganization or collective redundancy requires a carefully crafted communication plan to limit the impact on employees. Here are some crucial steps:

  1. Preparation: First, submit a provisional application for dismissal to the UWV.
  2. Organize a plenary meeting: Organize a meeting in which you explain in a clear and empathetic way why the reorganization is necessary. Discuss the future structure of the company, the steps to follow, and the timeline.
  3. Individual interviews: Schedule individual meetings to discuss personal situations, such as redundancy and reassignment options.

For a detailed guide on how to create an effective communication plan during reorganizations, including best practices, please refer to our article with useful tips for the communication plan during reorganization.

9. What costs do you need to take into account?

A reorganization involves various costs. Below you will find a list of the most important cost items:

  • Payroll costs during exemption from work: If employees are redundant and are exempted from work during the notice period, their wages will continue to run.
  • Outplacement: In the event of dismissal on economic grounds, it is often desirable to offer outplacement. This costs on average around €3,500 excluding VAT.
  • Transition payment or termination payment: Employees are entitled to a transition payment in the event of dismissal, calculated on the basis of 1/3rd of the gross monthly salary per year of service.
  • Signing bonus: To motivate an employee to quickly agree to a settlement agreement, you can consider a signing bonus. This often involves an extra month’s salary.
  • Attorney’s fees: Professional legal advice is essential, as every reorganization is unique. This helps in avoiding unforeseen problems and additional costs. It is also advisable to offer redundant employees legal advice for their settlement agreement, such as €500 and €1,000, excluding VAT.
  • Final settlement: At the end of the employment, you must make a final statement for holiday allowance, any thirteenth month and unused holidays.

In addition to these costs, it is also important to take into account the time that a reorganization takes. For more information about the different steps during a reorganization, we refer to our detailed step-by-step plan for reorganization.

10. How do you deal with the prohibition on dismissal due to illness in the event of a reorganization?

(Also) during a reorganization, must be careful with A successful approach to the prohibition on dismissal due to illness during a reorganization requires careful consideration of the following points:

1. The prohibition on dismissal in the event of illness

During the first two years of illness, dismissal is prohibited. This means that an employee who is ill and becomes redundant as a result of reorganization is not eligible for dismissal.

2. Application of the principle of reflection

If a sick employee is eligible for dismissal according to the reflection principle, you as an employer must dismiss the next employee in the reflection. The sick employee cannot be dismissed and must be reintegrated into his current or another position. We explain exactly how this works in our article about illness during reorganization.

3. Exceptions to the prohibition on dismissal

There are exceptions to the prohibition on dismissal in the event of illness, such as in the event of poor performance or a disturbed employment relationship. A sick employee who is expected to recover in the short term may also be eligible for dismissal.

Prevent abuse of the prohibition on dismissal!

Prevent abuse of the prohibition on dismissal. You can do this by submitting a provisional application for dismissal (form A) to the UWV with the aim of investigating the possibilities for a termination agreement. The prohibition on dismissal does not apply to sick reports that you receive after submitting this application for dismissal.

After submitting this application for dismissal, the UWV offers a period of 14 days for negotiations, with the possibility of additional postponement in the event of no agreement. For a strategic approach to this process, read our article on how to apply for a dismissal permit.

Step-by-step plan for reorganization

For a complete overview of each phase in the reorganization process, please consult our step-by-step plan for reorganization. This plan will provide you with clear guidelines and ensure that you don’t overlook any important detail.

Strategic support for your reorganization

To ensure that your reorganization process runs smoothly and is fully in line with current legislation, our expert team is at your service. TEN Advocaten likes to think strategically with you, and is a discussion partner for management, Works Council and trade unions. In this way, you avoid unnecessary risks and ensure efficient restructuring. Schedule a no-obligation meeting, so that together we can take the first step towards a successful reorganization.

Published on 1 April 2025 by TEN Advocaten.