Reorganisation on the horizon? Don’t forget the redeployment obligation!

Newspapers are full of it towards the end of the year: major or minor reorganisations at various companies. Approaching the end of the year gives cause to think critically about the organisation, and spend budgets wisely. This is regularly accompanied by the decision to reorganize, resulting in job losses.

Earlier this year, we wrote about our observation that in practice with regard to reorganisations, important steps are still sometimes skipped, such as the (timely) involvement of the works council in a reorganisation. Another aspect that regularly remains underexposed in practice is the redeployment obligation.

Redeployment obligation
When there is the intention to dismiss employees due to (for example) a reorganisation, it is a requirement that the employer actively investigates whether the employees concerned can be redeployed elsewhere within the organisation in a suitable position (this is called the ‘redeployment obligation’). A suitable position is one that matches the employee’s education, experience and capabilities. If necessary, the employer must also offer the employee training to qualify for a suitable position.

In practice, we see that the redeployment obligation is often not taken seriously enough. Sometimes this subject is not discussed at all in the conversations held with employees as a result of the reorganisation, sometimes employees are only pointed to the organisation’s vacancies sites and invited to apply if they see a suitable position among them. That should be enough, it is thought.

Recent decisions by two courts of appeal (respectively Den Bosch and Arnhem Leeuwarden) confirm that this is not enough. The redeployment obligation requires an active effort by the employer. Consideration must be given to the existence (within a reasonable time) of suitable positions within the organisation, including other companies within the group if the organisation is part of a group of companies. A redeployment interview must also be held with the employee, during which a joint inventory is made of which positions could possibly be suitable. We will explain this active obligation of making effort for the redeployment in more detail below on the basis of these two court decisions.

Court of Appeal of Den Bosch, 18 July 2024: serious redeployment attempt requires a joint inventory discussion beforehand
This case involved an employee of an employer that was part of an international group of companies with about 9,000 employees worldwide. At some point, the employer applied to the UWV for a dismissal permit for the employee due to the redundancy of the employee’s position. The UWV refused this permit (it is not clear from the ruling why). The employer then applied to the court for dissolution of the employee’s employment contract, but the subdistrict court rejected the application on the grounds that the employer’s redeployment efforts had been insufficient. At the court, the central issue was whether the employer had made sufficient efforts to redeploy the employee.

The Court of Appeal concluded that the redeployment efforts had been insufficient, especially because no joint inventory discussion with the employee took place to determine the employee’s wishes (e.g. with regard to possibly accepting a lower position with lower salary and working abroad). According to the Court of Appeal, such an inventory discussion would have been necessary to be able to speak of a serious attempt to redeploy the employee. Since no such inventory discussion took place and the employer only mentioned positions for which the employee would not be suitable, did not actively search for suitable positions itself and only reacted negatively to positions proposed by the employee, the employer did not fulfil its obligation of effort. The Court of Appeal also found it implausible, given the size of the group with 9,000 employees worldwide, that no suitable positions were available or would become available in the near future.

Conclusion: the Court of Appeal upheld the subdistrict court’s decision not to dissolve the employee’s employment contract.

Arnhem Leeuwarden Court of Appeal, 14 October 2024: failure to conduct redeployment interview leads to fair compensation
The Court of Appeal Arnhem Leeuwarden came to a similar conclusion later this year. This case involved an employee of Ineos, part of the Ineos Group (a global group of companies). This employee’s position also became redundant, upon which Ineos applied to the UWV for a dismissal permit. Ineos was also unsuccessful at the UWV, after which Ineos turned to the court. In this case, the subdistrict court decided to dissolve the employment contract with the employee, whereupon the employee appealed on the grounds that, according to the employee, the redeployment obligation had not been met and the Court of Appeal had to rule on Ineos’ redeployment efforts.

Ineos argued that the redeployment obligation had been met, because employees had been approached to apply for newly created positions if they had the right knowledge and experience to do so. No redeployment interview had been held with the employee because there were no vacancies in the Netherlands and no further suitable international vacancies given the distance/travel time commuting, salary scale or knowledge and experience. The international vacancies cannot be performed from home, and as the employee had already indicated once in 2020 that he did not want to move to another country, a redeployment interview, according to Ineos, was briefly of no use. In addition, according to Ineos, there was a ‘hiring freeze’. Furthermore, the employee was told where he could find all vacancies on the intranet and that he could apply for them if he wanted, but the employee never did so.

The Court of Appeal concludes that insufficient redeployment efforts were made by Ineos. According to the Court of Appeal, the fact that there is a hiring freeze does not alter the legal obligation that Ineos will, in principle, have to redeploy the employee in a suitable position in the event of a vacancy. The Court of Appeal found that vacancies that were available were not discussed with the employee, nor was a redeployment interview held, although this could have been required of Ineos. This was all the more true as Ineos assumed that international vacancies were not suitable because the employee was unwilling to relocate, while Ineos based this on statements made by the employee in 2020 based on personal circumstances prevailing at the time. It has since been established that the employee’s personal circumstances had changed and that the employee was indeed open to international redeployment. According to the Court of Appeal, the initiative lay with Ineos to consider, in consultation with the employee, which vacancies within the global group would be suitable. By failing to carry out such consultation, insufficient redeployment efforts were made.

In this case, this left the Court of Appeal with two choices: reinstate the employment contract or award fair compensation to the employee. The Court went for the latter and awarded the employee fair compensation of EUR 109,723.27 gross.

Conclusion
If an employee’s position becomes redundant, it is thus important to actively engage in a redeployment interview. If you do not do this, you risk a rejection by the UWV on the dismissal request and, if it reaches the court or the court of appeal, a rejection of the dissolution request, reinstatement of the employment contract or the awarding of fair compensation to the employee. In short: not conducting a redeployment interview can cost you dearly.

We have extensive experience with reorganisations and would be happy to assist you further on how to fulfil the redeployment obligation. We e.g. have a form available that can serve as a guideline for the redeployment interview. Need help? Feel free to call or e-mail us.