Redundancy

Please note that the actual occurrence of the redundancy, the restructuring of a post or the change to an essential element of the employment contract is assessed at company level.

In all cases, any redundancy must be justified by a genuine and serious reason that is objectively verifiable.

Proving an economic reason is not sufficient. The law requires you to follow a procedure and to attempt to avoid mass redundancies.

The redundancy of one or more of your employees on economic grounds may only take place once all efforts relating to training and adaptation have been exhausted. However, you are not obliged to offer initial training.

Before resorting to redundancy on economic grounds, it is essential to explore all alternative solutions, including those that result in a significant change to the employee’s situation.

Interim solutions include:

• Placing employees on temporary lay-off, for a maximum period of three months (this cannot be renewed)
• A reduction in working hours with a corresponding reduction in pay
• Rotational working.

Procedure for redundancy on economic grounds

If no solution is available to avoid redundancy on economic grounds, the employer must:

• Follow the order of redundancies: Establish the order of redundancies, taking into account certain criteria: professional skills, length of service, social security contributions;
• Consult with staff representatives;
• Summon employees to a preliminary interview and conduct this interview: Provide the list to staff representatives, if any. The employer must then summon the representatives within eight days to gather their suggestions;
• Draw up and, if possible, implement a job protection plan;
• Notify the employees of their dismissal;
• Pay the severance pay and hand over the end-of-contract documents;
• Do not forget to inform the relevant administrative authority: Provide the labour inspector, for the purposes of their investigation, with the list of employees proposed for redundancy and the minutes of the meeting held with the staff representatives.
• Please note: If your employee is a protected employee (for example, holding a position as a staff representative), you are required to seek authorisation from the labour inspector before making the employee redundant on economic grounds.

Rights of employees made redundant on economic grounds

Employees made redundant on economic grounds are entitled, in addition to the standard compensation (for dismissal on personal grounds), to special compensation equal to one month’s gross salary (tax-free), and priority for re-employment for two years within their former company in the same category.

New: A letter from the employer to the labour inspector requesting approval for redundancy on economic grounds must establish a causal link between the economic difficulties and the job loss. If this is not the case, the dismissal cannot take place, otherwise the employer may be liable to pay damages at the request of the dismissed workers.

Jargon

Order of redundancies: The company must select employees according to certain criteria: professional competence, length of service, and family responsibilities.

Seniority is increased 

• By one year for a married employee.
• By one year for each dependent child.

Redundancy package: This is a set of measures proposed by the company to provide additional support (or other benefits) to employees on top of statutory compensation.