Mass redundancy

Economic Crisis

During economic crises, the employer is required to take measures to try to save his company. In serious cases, he will be obliged to proceed with a mass redundancy. Before doing so, a strict procedure must be followed.

Definition

Mass redundancy occurs when the employer dismisses a large number of employees for economic or restructuring reasons within a certain period of time. Dismissals for other reasons inherent to each employee are not counted.

Whether the employer has to follow this specific procedure will depend on the number of dismissals, the timeframe within which they are made and the size of the company.

Consultation

The employer must first consult the employees or the employee’s organization so that they can make proposals regarding the situation. The employer must give them a reasonable period of time to think about the matter.

The employer must do this early enough. If he consults his employees after having made the decision to dismiss them, it is already too late. The employer has the same obligations if the decision to terminate the employment is taken by the parent company and the employer has no influence on the decision.

The employer must also inform the competent authority of the planned mass redundancy. After the consultation procedure, the employer is still obliged to notify the competent authority of the mass redundancy once the decision has been taken. The employment relationship cannot be terminated before a certain period of time after this notification.

Modification-leave

With a modification-leave, the employer terminates the employee's employment relationship and at the same time proposes a change in the employment contract. The main purpose of the modification-leave is not to dismiss the employee but to continue the employment relationship under modified conditions.

Employers are sometimes forced, when they are in economic difficulty, to offer modification-leave to all or some of their employees, in particular by proposing salary cuts or a reduction in their working hours.

When employees refuse to accept the changes proposed by means of a modification-leave, the situation is delicate. If the number of employees who refuse the proposed changes is higher than the legal thresholds, the mass redundancy procedure will not have been respected. The employer is exposed to heavy financial consequences.

Social plan

The purpose of a social plan is to prevent or mitigate the consequences of a mass redundancy for the employees concerned. All kinds of measures are possible. They must respect the principle of equal treatment. For small companies, a social plan is optional.

Large companies must negotiate a social plan if they have more employees than the minimum number required by law. Whether the employer must negotiate with the employees, the employee’s organization or a trade union will depend on the specific situation of each company.

If the parties cannot agree on the conclusion of the social plan, they will have to turn to an arbitration tribunal.

Consequences

When the employer does not respect the mass redundancy procedure, in case of legal action, all dismissals will be qualified as unlawful. The employer is exposed to the risk of having to pay compensation to each of his dismissed employees.

Transfer of the company

In the event of a transfer of the company, it may happen that the company acquiring the company does not wish to maintain the jobs of all employees. This situation must be handled with great care.

If the number of redundancies considered is equal to or greater than the thresholds for mass redundancies set by law, the employer will have to comply with the procedure for consulting the personnel in connection with the transfer of the business and the mass redundancy. A mass redundancy in order to facilitate the transfer of the company is particularly problematic.

Strike

When social dialogue becomes strained or breaks down, employees sometimes go on strike, in particular in order to obtain a more favorable social plan or to limit the number of dismissals.

The strike must respect strict conditions of validity to be valid. Otherwise, the employer may issue warnings or even terminations.

If the strike is legal, the employer may refer the matter to the competent conciliation authority. This appeal will put an end to the strike.