Reorganization Roadmap

This blog provides employers with a step-by-step plan that clarifies the rules and requirements for carrying out a reorganization, followed by two examples from recent case law to illustrate the risks that may arise if these rules are not followed.

Step 1: Draft a Reorganization Plan
During the preparation phase, a clear and concrete reorganization plan must be drawn up, including at least:

• The reasons for the reorganization (e.g., financial or organizational motives).
• The consequences for employees (changes or reductions in positions).
• How the Works Council (OR) will be involved.
• A timeline for implementing the reorganization.
• A communication plan.

Step 2: Map Out the Personnel Consequences
To determine the impact on personnel, employers must assess:

• Impact on positions: Which positions will remain, change, and/or be reduced?
• Interchangeable positions: Determine which positions are interchangeable in terms of content, level, and remuneration (assessed objectively at job level).
• Last-in, first-out principle (afspiegelingsbeginsel): When reducing positions within a group of interchangeable roles, determine who qualifies for dismissal by applying this principle. Deviations are possible only in exceptional cases, e.g., if an employee is indispensable.
• Redeployment options: Investigate whether employees can be redeployed to a suitable position, potentially with training. A position is suitable if it matches the employee’s education, experience, and skills.

The detailed personnel consequences form part of both the reorganization plan and the Works Council advisory request.

Step 3: WMCO Check
In cases of collective redundancy (≥ 20 employees within 3 months in the same work area), employers must notify the trade unions and the UWV in a timely manner. After notification, a one-month waiting period applies before dismissals may take place.

Step 4: Works Council Advice
The Works Council must be asked for advice in a timely manner regarding significant organizational changes (Article 25 WOR). A reorganization falls within this requirement. The Works Council’s advice must have a material influence on the final decision. Failure to comply may lead to an appeal before the Enterprise Chamber, potentially resulting in withdrawal of the reorganization decision and/or rejection of the dismissal application by the UWV.

Step 5: Social Plan
Agreements may be made with the Works Council or trade unions on how to mitigate the impact on affected employees (e.g., redeployment process, severance payment, outplacement support). These agreements are recorded in a social plan.

Step 6: Provisional Dismissal Application to UWV
Before informing employees that their positions will be eliminated, an employer may submit a provisional dismissal application to the UWV. This prevents the prohibition on dismissal during illness from blocking the dismissal. The UWV will generally grant a 14-day postponement to allow parties to reach a settlement.

Step 7: Termination of the Employment Contract
If employees who are designated for dismissal cannot be redeployed, the employment contract may be terminated in several ways:

• UWV procedure: The standard route is to request a dismissal permit from the UWV for termination on economic grounds. The employer must demonstrate economic necessity, correct application of the dismissal selection rules, and sufficient efforts to redeploy.
• Settlement agreement: In practice, a settlement is often reached in the form of a settlement agreement (vaststellingsovereenkomst), consistent with the terms of the social plan.

A reorganization requires careful preparation and strict compliance with the applicable rules. Failure to do so may lead to significant legal and financial risks.

The UWV may refuse to grant a dismissal permit, preventing termination and leaving the employee employed. In such cases, the employer may request the court to dissolve the employment contract on economic grounds or on another ground, such as a seriously and permanently disrupted employment relationship.

If the court (or, on appeal, the Court of Appeal) dissolves the contract due to a disrupted relationship but finds that the disruption was largely caused by the employer, a fair compensation (billijke vergoeding) may be awarded.
A clear example is the ruling of the Amsterdam Court of Appeal dated 8 July 2025, in which ING was found to have made insufficient efforts to redeploy an employee, causing a severe breakdown in relations. ING was found seriously culpable, resulting in a fair compensation of €220,000 awarded to the employee.

A request for termination may also be denied if the economic necessity for the reorganization is insufficiently substantiated (and thus a valid ground for dismissal is lacking). This occurred in another Amsterdam Court of Appeal decision of 8 July 2025, in which Crocs failed to demonstrate that the reorganization was necessary for efficient business operations. The employment contract therefore remained in force, and any damages would have to be determined in separate proceedings.

These cases show the importance of following reorganization rules carefully. Solid justification is required for terminating employment — both regarding the reason for the reorganization and the redeployment efforts. Failure to comply can become very costly for employers.

For any questions, please contact Renate Vink-Dijkstra, Partner & Lawyer, Employment, Employee Participation & Mediation.

This blog was written for HERO.

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