An employer aiming to restructure its organisation cannot decide for itself which employees will leave the company. Sometimes the ‘pearls’ have to leave the company instead of the ‘rotten apples’. With the ‘musical chair method’ (in Dutch: stoelendans) an employer can (sometimes) still select on quality.

Restructuring

Entrepreneurs have a great deal of freedom to restructure their business. But if, for economic or organisational reasons, a company has to say goodbye to its employees and the positions that will become redundant are ‘interchangeable’, the balancing principle must be applied to determine the order of dismissal. For each age group (15-25; 26-35; 36-45, etc.), the employees with the shortest employment will be eligible for dismissal. If an employee has a ‘unique position’ or a whole category of interchangeable positions will be made redundant, the balancing principle is not applicable.

Musical chairs method

The latter is the case with the ‘musical chairs method’: a (group of) position(s) ceases to exist, as a result of which all employees in that position become redundant. The employees may then apply for (usually a smaller number of) new positions, whereby the employees can be selected on the basis of quality. In this way, the employer can still continue with the most suitable employees.

Is that allowed? It is important that the new positions are substantially different from the old positions and are not mutually ‘interchangeable’ with the former positions. So: are the former and the new positions interchangeable? If so, the balancing principle must be applied. If not, then the aforementioned principle is not applicable. However, the employer must do its utmost to redeploy the redundant employees to other suitable positions. In that case, in principle the employer may select on the basis of quality.

Attention when part of the work continues

The Implementing Rules of the UWV also stipulate that the employer may, in principle, select the most suitable employee for a suitable position. But please note: since 2015, this is different if part of the work is continued in a new position. In that case, the employer may no longer choose the employee who is ‘most suitable’ from a group of ‘suitable’ employees, but must look at which of the ‘suitable’ employees would qualify for dismissal last on the basis of the balancing principle. This employee would then be the first to be entitled to be reassigned to the new job. This is a restriction of the employer’s freedom of choice.

To maximize the freedom of choice, it is important to make a clear distinction between the former and the new position and to establish clear, strict criteria when an employee is suitable for the new position.

Tips for a successful musical chairs exercise:

• Draw up job descriptions with objective, personal criteria for suitability;
• Ensure that there are clear differences between the former and new positions (both in terms of content and employment conditions – case law shows that salary differences can be a strong indication that jobs are not equivalent);
• Ensure a careful and objective selection procedure, preferably with the help of an external agency when determining the job requirements and an (external) assessment;
• Involve the Works Council and/or trade unions; if necessary, lay down the selection method in a social plan;

For other tips and questions you can always contact our office. Marble is happy to dance with you.