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In May 2004, the Dutch Minister of Social Affairs proposed changes to the statutory rules on selection for redundancy, with less emphasis on the 'last in, first out' seniority-based principle and a greater focus on distributing the redundancies between employees of different ages. The social partners have given the idea a mixed reception.
In a memorandum sent to the lower house of parliament in May 2004, the Minister of Social Affairs, Aart Jan de Geus, proposed allowing the principle of 'age distribution' to play a greater role in terms of compulsory redundancies, even when there are fewer than 10 such redundancies.
At present, the basic principle in selection for redundancies applied by the Centre for Work and Income (Centrum voor Werk en Inkomen, CWI) - the public administrative body that authorises redundancies - is seniority, or in other words 'last in, first out' (NL0311103T). At the request of an employer wishing to preserve a balanced age structure, however, priority may be determined within each of five age categories, but only where at least 10 employees are being made redundant. In the future, the minister wants this balanced aged distribution in redundancy selection to apply to cases involving fewer than 10 employees, and also to apply within each function instead of across the whole company. He believes that these changes will lead to a more uniform protection against redundancy for different employee groups. Furthermore, the minister wants to give the social partners greater leeway to deviate from the regulations on redundancy selection through collective agreements. As well as seniority, Mr de Geus believes that factors such as knowledge, skill and employee performance should also play a role.
The Dutch Federation of Small and Medium-sized Enterprises (MKB-Nederland) employers' organisation is positive about these proposals and expects the small and medium-sized business sector to benefit from the proposed new regulations. MKB-Nederland thinks they will provide an opportunity better to guarantee the continuity of the company and quality of the workforce in the event of redundancies. The Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV), however, is not enthusiastic about the proposals. FNV believes that there would be a danger of arbitrary treatment, which is far more limited under the 'last in, first out' principle, and that redundancies could be used as an instrument to compensate for inadequate personnel policy. FNV’s standpoint is shared by some labour lawyers, who support the 'last in, first out' principle because it can be tested objectively, while more qualitative criteria would be subjective and highly problematic to implement in practice. Implementation of the minister’s idea of giving the social partners an opportunity to reach their own agreements on redundancy selection criteria is seen as especially doubtful.
The minister has asked the Labour Foundation (Stichting van de Arbeid, STAR), the bipartite advisory body, and the CWI to issue recommendations on his proposals.