In May of this year, Uber’s Headquarters in Silicon Valley had sent out an email to their employees, stating that savings had to be achieved due to the corona crisis. Prestigious projects had to stop and 25% of all employees worldwide would be sent off. Saving results were required in the short term, was the message to local management. Consequences for the Amsterdam office were that around 200 people became redundant. Sofar a very brief summary of what I read in an article published in the Dutch newspaper NRC on 7th November 2020.
I could picture the challenges that Uber’s local Amsterdam management must have had in explaining to their Silicon Valley-based, US labour law centred bosses, how dismissal procedures work in The Netherlands. The majority of employment contract terminations are governed by UWV procedures. UWV is an autonomous administrative authority in The Netherlands and playing an important role in guiding Employer and Employees the route to follow in the ‘’Dutch polder’’. UWV grants dismissal permits to Employers and provides unemployment benefit payments to Employees who recently lost their jobs.
The Dutch polder now offers options to Employers to either unilaterally or mutually terminate the employment contract under UWV regulation.
For unilateral termination, a dismissal permit has to be obtained from UWV. Its application involves the production and submittal to UWV of several documents (financial projections, efforts undertaken to save jobs, etc..) by the Employer. UWV does a thorough assessment of the information and may question (part of) the information given. In addition, the Employer may have to seek advice from a Works Council in case the number of redundancies is substantial. Unilateral termination is a process that requires effort, time, and dedication from the Employer.
Mutually agreed termination of an employment contract (in Dutch: ontslag met wederzijds goedvinden) can be done on an individual basis and is quicker. The agreed terms will be reflected in a Settlement Agreement (in Dutch: vaststellingsovereenkomst) that is signed by both parties. Such an agreement obviously requires a constructive dialogue between Employer and Employee. Understanding and respecting each legal position, the necessity of actions, and acknowledging that possibilities for alternative employment were explored, but given the (economic) circumstances, not found.
From the newspaper article in NRC, it seems that local Uber management chose to execute both the unilateral and mutual approaches in parallel. The mutual settlement approach turned out to be quicker and more effective for Uber. Whilst UWV was still assessing documentation, the vast majority of the 200 employees, mainly highly educated expats, signed a Settlement Agreement. The Employer is accused of having applied pressure to the Employees, for which it was criticized in the newspaper article. ‘’The end justifies all means’’, local Uber management must have thought.
The opposite is also possible. Limited awareness and inexperience by the overseas company with reorganizations and lay-off procedures in the Dutch context, create confusion and may result in undesired outcomes for both Employer and Employee. The process of contract termination as a result could be lengthy and energy-consuming, resulting in a long period of discomfort with Employees targeted for dismissal as well to those who will remain. It may inflict damage to local management.
International Companies and their Expat Workers would benefit from understanding the possible ways that employment contracts can be determined. They might see it is an evolved system that provides opportunities to both Employer and Employee to find solutions in an uncomfortable situation. They might discover the polder is not so impregnable as it may seem at first glance.