The WMCO: collective redundancy notification under Dutch law
The Collective Redundancy (Notification) Act (Wet melding collectief ontslag, WMCO) imposes a duty on employers to notify the Employee Insurance Agency (UWV) and to consult representative trade unions (vakbonden) before implementing a collective redundancy. The WMCO implements the EU Collective Redundancies Directive (98/59/EC) into Dutch law. Failure to comply with the WMCO renders the subsequent individual dismissals voidable.
The WMCO applies when an employer intends to dismiss at least 20 employees within a period of three months for reasons unrelated to the individual employees (i.e. economic or organisational reasons), working within the same UWV work area (werkgebied). The notification must be made to the UWV before the individual dismissal applications are submitted or the notice periods begin to run.
Content of the notification under Dutch law
The WMCO notification must include: the reasons for the collective dismissal; the number and categories of employees to be dismissed; the proposed selection procedure (including adherence to the afspiegelingsbeginsel); the period within which the dismissals will take effect; the calculation method for any severance payments; and the measures taken or proposed to mitigate the consequences - including any social plan and outplacement arrangements.
The employer must simultaneously consult the representative trade unions about the proposed collective dismissal. The consultation must be genuine and in good time - the employer must be open to considering union proposals. If no unions are active, the works council consultation under Article 25 WOR supplements but does not replace the WMCO consultation requirement.
Consequences of non-compliance under Dutch law
If the employer fails to comply with the WMCO notification and consultation requirements, the dismissed employees can invoke the nullity of their individual dismissals - even if those dismissals were otherwise procedurally correct. Courts have held that a WMCO violation is a serious procedural defect entitling employees to reinstatement or, alternatively, enhanced compensation. Employers undertaking collective redundancies of 20 or more employees must engage legal counsel from the outset to ensure full WMCO compliance alongside the UWV dismissal procedure and works council consultation.
The employer cannot give earlier notice of termination than one month after the WMCO notification to the UWV and the trade unions, unless the trade unions have declared in writing that they have been consulted and agree with the terminations. The UWV will not process individual dismissal permit applications until the employer has fulfilled all notification obligations and declared in writing that it has consulted both the trade unions and the works council - this mandatory waiting period can be waived only if the employer makes it plausible that the delay would jeopardise the employment situation of the enterprise as a whole. For the calculation of the threshold of 20 employees, dismissals by mutual consent and court-ordered dissolutions must be included; dismissals during the probationary period, dismissals on purely personal grounds, and contracts that expire by operation of law are excluded from the count.