Collective Redundancy Via the Subdistrict Court or UWV WERKbedrijf?
Subdistrict Court of Amersfoort 3 April 2009, JAR 2009/112
and Subdistrict Court of Lelystad 28 April 2009, JAR 2009,
155
Collective Redundancy
In the event of a collective redundancy on
commercial grounds the employer usually applies to UWV WERKbedrijf
(previously CWI). This is also the route indicated in the
Collective Redundancy Notification Act (Wet Melding Collectief
Ontslag ("WMCO")). The WMCO applies if the employer has
the intention of having the employment agreement of at least 20
employees in one single work area terminated within three months.
In that case the employer must notify the interested trade unions
about the intended collective redundancy. In case law there are
various opinions on the question whether it is also possible to
have the Subdistrict Court decide on a collective redundancy. Some
Subdistrict Courts are of the opinion that UWV WERKbedrijf is the
only body authorized to deal with a collective redundancy.
The Facts in Broad Outline
Both employers were of the view that they were having acute
financial problems and that a reorganization was necessary. One
employer therefore wished to dismiss 26 out of the 61 employees.
The other employer wished to terminate the employment agreements of
54 employees. Both employers decided to file a petition for
rescission for the employees with the Subdistrict Court.
The Subdistrict Court of Amersfoort
The Subdistrict Court deemed itself competent to take cognizance of
the petitions for rescission. After all, the law stipulates that a
petition for rescission can be made at all times. The next
question, however, was whether the employer had a cause of action,
now that he had breached the WMCO and the Works Councils Act (Wet
op de Ondernemingsraden ("WOR"). The fact that the WMCO
did not apply (directly) to the petition for rescission did not
mean that this Act should not apply, according to the Subdistrict
Court. The essence of the WMCO is, after all, that the employer
must report the collective redundancy for timely consultation of
the interested associations. It is an established fact that the
employer had wrongfully not consulted all interested trade unions.
Furthermore, the employer should have an active Works Council. A
reliance on insufficient interest on the part of the employees was
of no avail to the employer. The sanction set in the WMCO, namely
not dealing with the petitions, was not expedient in this respect.
Now that there is a financial emergency, the Subdistrict Court
deemed that the employer had a cause of action.
The employer offered no compensation in his petitions for
rescission. The fact that the employer has breached his obligations
under the WMCO and the WOR is translated into the awarding of a
severance pay. It is also deemed important in this respect that not
all figures submitted by the employer were always exact. This was a
reason to summon the shareholder to still provide financing and to
make a limited compensation for the employees part of this
financing. 22 out of the 26 petitions for rescission were
subsequently awarded, whereby the employees were awarded a
compensation equal to the wages over the fictitious notice period,
plus a supplement of 30% to the unemployment benefits during a
couple of months, depending on the duration of the employment.
The Subdistrict Court of Lelystad
The Subdistrict Court of Lelystad had to adjudicate (the remaining)
46 petitions for rescission. This Subdistrict Court deemed itself
competent too and also ruled that the WMCO has consequential effect
in the rescission proceedings and deemed this also to be applicable
to the BBA (Extraordinary Labour Relations Decree), the Dismissals
Decree and the Policy Rules of UWV WERKbedrijf. The Subdistrict
Court ruled, just like the Subdistrict Court of Amersfoort, that
the WMCO had been breached. In addition to this, the principle of
proportionality had not been applied correctly and the
reorganization was insufficiently substantiated. The Subdistrict
Court of Lelystad, however, arrived at a different opinion than the
Subdistrict Court of Amersfoort. Since there was no question of
special circumstances and the acute financial problems had not
become evident either, all petitions for rescission were
rejected.
Tips
- In the event of a projected dismissal, an employer has the
choice between applying to the Subdistrict Court or UWV
WERKbedrijf. In principle, in the event of a collective
redundancy, the UWV WERKbedrijf route is the designated
route.
- The Subdistrict Court is, in principle, also competent with
regard to a collective redundancy. Just like UWV WERKbedrijf
the Subdistrict Court will also test whether the WMCO, the WOR
and the BBA have been observed.
- The breaching of the WMCO and the WOR can be translated
into a rejection of the petition of rescission or in the
awarding of a compensation, especially if there are no special
circumstances.