Settlement agreement in a restructuring

Is your position being made redundant? Check the necessity, selection process, redeployment efforts and termination terms before signing.

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Reason and substantiation

Points to check

Four steps

Social plan and settlement agreement

Why is the employer restructuring?

A restructuring may result from financial difficulties, reduced work, automation, outsourcing, relocation or a different organisation of work. The employer must substantiate why positions will be lost on a structural basis.

Without the employee’s consent, dismissal on economic grounds proceeds through UWV or, where a collective labour agreement so provides, an independent dismissal committee. A settlement agreement is voluntary and replaces that formal assessment.

Dismissal on economic grounds

What should you check?

Do not assess only the proposed payment. Your position also depends on the restructuring rationale, employee selection, redeployment opportunities and any arrangements in a social plan.

Is your position genuinely disappearing?

The employer must explain which work will disappear, be combined, automated or outsourced, and why this will lead to a structural reduction in positions.

Is the redundancy order correct?

For interchangeable positions, the statutory selection method (afspiegelingsbeginsel) generally determines who is selected. Check the relevant employee category, age group and length of service.

Are the positions genuinely interchangeable?

Job titles alone do not determine whether positions are interchangeable. Duties, required knowledge, skills, competencies, level and remuneration are also relevant.

Has redeployment been genuinely investigated?

The employer must investigate whether a suitable role is available within a reasonable period, with training where appropriate and, where relevant, within the group to which the business belongs.

Does a social plan apply?

In a larger restructuring, a social plan may contain arrangements on compensation, support, redeployment and selection. Check whether it applies to you and whether different individual terms can be agreed.

What happens if you do not agree?

If you do not sign, the employer must follow the formal dismissal route and substantiate the application. Compare the proposal with your likely position in a UWV procedure.

Terms and a social plan during a restructuring

Review a restructuring proposal in four steps

1Investigate the reasonAsk which duties and positions will disappear on a structural basis.

2Check the selectionAssess interchangeable positions, the statutory selection method and any exceptions.

3Review redeploymentIdentify suitable vacancies, training and alternatives within the organisation.

4Compare the packageCheck the termination date, payment, social plan, WW position and other terms.

Have the proposal reviewed

Collective redundancy and the social plan

check the neutral ground for termination and the correct termination date;
compare the payment with the statutory transition payment and the social plan;
agree garden leave, holiday entitlement, bonus and legal costs;
review non-compete and non-solicitation clauses;
record arrangements on a certificate, reference, outplacement or a training budget.

Which terms belong in the settlement agreement?

Additional collective-redundancy rules apply where an employer intends to dismiss 20 or more employees within three months in one UWV work area. The employer must, among other things, notify UWV in time and consult the trade unions.

Dismissal on economic grounds

Statutory transition payment

More about dismissal and your rights

View all dismissal situations or read more about dismissal on economic grounds and severance pay under a settlement agreement.

Dismissal grounds and situations

Dismissal on economic grounds

Severance pay

Is your position being made redundant in a restructuring?

Have the restructuring rationale, your selection, redeployment efforts and the complete proposal reviewed before deciding.

Have your proposal reviewed

Help with negotiations

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Settlement agreement in a restructuring

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Why is the employer restructuring?