Restructuring: selection based on suitability is permitted

However, the employer can also opt for selection based on suitability, often referred to in Dutch as “stoelendansmethode” (“musical chairs method”). When using the “stoelendansmethode”, the employer eliminates existing positions while simultaneously creating (fewer) new positions. The employees holding the eliminated positions can then apply for the new positions. This gives the employer the opportunity to partially select based on quality.

A decision by the Subdistrict Court of Nijmegen on 18 October 2024 offers insight into the requirements and possibilities for employers during this process.

Creation of a new role

During organisational changes, it may be the case that a role is discontinued and a new one emerges. However, employees from the old role (even those with the longest service) are not automatically deemed suitable for the new position. The first question is whether the new role is equivalent to the old role being abolished. Only if the roles are interchangeable are employees assigned to the new position based on reverse reflection (the Dutch selection system based on age categories and service length). If the roles are not interchangeable (in Dutch: “uitwisselbaar”), the employer may assess the suitability of candidates for the new position.

Step-by-step plan

The employer must act carefully and may not proceed arbitrarily. If the employer uses an objective and transparent selection process, there is a good chance that selection based on suitability will be accepted by the Employee Insurance Agency (UWV) or the courts. The ruling by the Subdistrict Court in Nijmegen shows how an employer can handle this properly.

Step 1, as mentioned, is for the employer to demonstrate that the old and new roles are not interchangeable. Differences in salary scale and/or job content are relevant here. An assessment report from an external job evaluation agency is particularly valuable, as confirmed in this court case.

If the roles are not interchangeable, it is common for parts of the old role to return in the new role. However, this does not mean that employees previously performing these tasks are automatically placed in the new role via reverse reflection. The employer is entitled to assess candidates’ suitability based on the job profile. The UWV guidelines have for some time confirmed that this approach is consistent with a 2018 Supreme Court ruling (known as the “ANWB judgment”).

How does suitability assessment work?

1. Employees whose role is being discontinued are given the opportunity to express their interest in the new (non-equivalent) role.
2. Before the application process starts, each employee receives the job profile for the new position along with a clear explanation of the procedure.
3. Employees submit their applications, and one or more interviews are held.
4. The Nijmegen judgment shows that the selection panel does not necessarily have to include external recruiters. In this case, the panel included a former manager and members of the Board of Directors, who were not yet well acquainted with the redundant employees.
5. The ruling states that it is neither required nor customary for the employer to provide applicants with a list of assessment criteria in advance; it is sufficient for applicants to receive their scores afterwards. Of course, it is advisable to share the criteria in advance anyway.
6.  After the interviews, the selection panel ranks the candidates using completed scorecards.
7. The most suitable candidate can then be appointed to the new role. If there are several equally suitable candidates, reverse reflection is used to select between them.

Assessment

The Subdistrict Court noted that an external assessment by an independent agency is not necessarily required. In this case, both the employer and the employees agreed that it was not necessary. The involvement of the former manager in the selection panel played an important role, as this person was well placed to assess the candidates’ knowledge and skills. However, to further guarantee objectivity, it is generally advisable to involve an assessment agency.

Entrepreneurial freedom

The court emphasised the employer’s entrepreneurial freedom and discretion during the selection process. The judge pointed out that the employer is not obliged to disclose exactly how the ranking of candidates was determined. This means the employer has a degree of freedom when evaluating the scores.

Selection based on suitability is allowed

The outcome of this case, in which two employees whose roles were being eliminated sought urgent appointment to the new position, is not surprising. The court dismissed their claim because the process leading to the conclusion that they were not suitable was properly conducted. The employer’s use of an independent job evaluation agency, along with careful preparation and an objective selection process, proved critical. Under these circumstances, selecting employees based on suitability (“stoelendansmethode”) is acceptable. The employment lawyers at GMW Advocaten are experienced in this area and are happy to advise you.

More information

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