9 July 2020
Many businesses are in grave danger because of the corona crisis.
The wage cost subsidy of the NOW scheme is all that is keeping some companies going. But how long can it last without firing staff? Will the second round of wage cost subsidy (NOW 2.0) offer structural relief this summer – or will this summer or autumn be the time for the unfortunate (collective) dismissal of personnel? Here we discuss some of the main points for attention.
In the media and politics, the dismissal fine – the employer’s (partial) repayment of NOW wage cost subsidy – plays a major role in the question of whether a “wave of dismissal” is imminent. However, there is much more to consider when an employer is deciding on a (collective) dismissal.
If you apply for wage cost subsidy under the NOW 2.0 scheme, you will receive wage cost subsidies for the months of June, July and August. However, if you also start a UWV dismissal procedure in the summer months, you will have to repay part of the advance payment of that wage subsidy later this year. The degree of loss of turnover determines the amount of the subsidy. The discount on the subsidy, the dismissal fine, is always calculated on 90% of the employees’ salary.
With a smaller loss of turnover, it can therefore be relatively expensive to reorganise during the term of NOW 2.0. Apart from the above costs, which consist of continued payment of wages during the procedure and payment of the transition payment. It may be worthwhile to postpone reorganisation dismissals until shortly after the term of NOW 2.0, in October.
If the company is in financial difficulties, there are also options other than these employment law options. Think of restructuring debt through an agreement with creditors, or negotiations with financiers and the tax authorities. Consideration may also be given to the partial termination or transfer of business activities.
Reorganisation requires a broader consideration than just looking at employment law. It requires insight into your organisation, the groups of (interchangeable) functions and all financial scenarios.
In order to serve companies as efficiently as possible, our employment and company law departments join forces. An employment law expert and an expert in the field of corporate law look at your problem together as a team. This allows us to find a correct and sustainable solution for you. By looking at everything from two sides, we create a unique customised solution for you.
Do you have a question? Do not hesitate to contact us.
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