A lot of companies are toughly toughed by the Corona crisis, should be clear.
The expectation was and still is that companies need to take measurements to save themselves. One of these measurements in this case is for companies to say goodbye to some of its’ employees to limit the (wage) costs. Meanwhile, the first big re-organizations are announced and launched.
Dismissal due to commercial interests
When a company wants to say goodbye to an employee because of circumstances in this company, we call this dismissal due to commercial interests. With commercial interests, there can be thought of:
- Poor financial situation of a company
- Reduced availability
- Organizational and/or technical changes, like automation
- (partly) Cessation of operations
- Business relocation
When a employer wants to dismissal an employee due to commercial interests, the employer should ask permission to the UWV in the beginning, by asking for dismissal application. The UWV will investigate the cause of the dismissal of the workplace. The employer should be able to show that:
- There should be a question of commercial interests
- Because of this, functions expire, including the one from the employee;
- Both employee turnover and redeployment are not an option anymore, whether or not with education
If the UWV has featured enough information and the dismissal application is taken in progress, the concerning employee gets the chance to react to this, to defend themselves. After the reaction of the employee is received, the UWV decides if there is a second (and maybe a third) round, or if they received enough information to decide about the dismissal application.
Only when the UWV has given permission for the dismissal, the employer can terminate the employment agreement. This permission is being called a dismissal permit. In some cases there is a cancellation ban. This is, for example, the case with a sick or pregnant employee. In that case, the employer cannot terminate the employment contract, not even with the permission of the UWV.
The influence of Corona
In view of the foregoing, the existence of a bad financial situation is not the only reason for which a business economics reason can be assumed. Yet it is expected that this will often be the business economic reason that will be put forward in the coming reorganizations.
Although demonstrating poor(er) results will not be difficult for many companies, given the current crisis, good financial substantiation for this reason is of great importance. This concerns not only a poor financial situation at the moment, but also an expectation that this poor financial situation will last for at least 26 weeks if no measures are taken. After all, the loss of jobs must be necessary for business reasons.
In the context of this necessity of job losses, it is also important which other measures have been taken or could be taken to prevent dismissal. In this context, consideration can be given to applying for the so-called NOW scheme.
NOW scheme 1, 2, 3
Until recently, making economic dismissals during the period in which the NOW scheme was used had an influence on the amount of the NOW subsidy. During NOW 1.0, a company was fined 50% of the dismissed employee’s wages. In addition, the wage bill of the dismissed employee was deducted from the final subsidy. During NOW 2.0, there was no longer a fine, but the employee’s wage bill was still deducted from the final subsidy.
We have now arrived at NOW 3.0. The subsidy deduction for applying for economic dismissal no longer applies under NOW 3.0. Under NOW 3.0, there are no longer any consequences for the amount of the subsidy if an employer requests dismissal for economic reasons. However, the employer is obliged to make every effort to guide people who will lose their jobs to new work.
With the expiration of the discount on the subsidy for applying for dismissal for economic reasons under the NOW 3.0 scheme in force from October 1, 2020, the doors to submitting a dismissal application for a commercial reason are again fully open. It is therefore expected that companies, in an attempt to keep their heads above water, will use this option to say goodbye to employees in order to limit (wage) costs. As noted at the beginning of this contribution, the first (major) reorganizations have now been announced.
