Crisis doubles redundancies in the Netherlands

Some 85 thousand people in the Netherlands lost their job in the first eight months of 2009. This is nearly double the 44 thousand redundancies in the same period last year.

Workers dismissed by employer or because of bankruptcy

Employees may face by forced redundancy on the initiative of their employer, or be made redundant because their employer is declared bankrupt. Employers wishing to end an employment contract must go through the district court or the Institute for Employment Benefit Schemes (UWV). If a company is declared bankrupt its employees are usually also made redundant. The receiver who manages the assets of the company may dismiss the employees without permission from the court or UWV.

Number of UWV dismissal permits doubled

Dutch district courts received more than 20 thousand applications for dismissal in the first eight months of 2009, an increase of 29 percent. The UWV granted nearly 24 thousand dismissal permits in the same period. This is more than twice the number in the same period last year.

Forced redundancies via the UWV, district courts and as a result of bankruptcy

Strongest increase for bankruptcy-related redundancies

The number of redundancies caused by companies being declared bankrupt was around 18 thousand in the first eight months of 2008. In the same period this year it had risen to about 41 thousand.
The increase in the number of people losing their jobs after going through the courts was by far the smallest. The reason for this is that dismissals as a result of bankruptcy and those handled by the UWV are more often related to a company’s financial situation.

Economy down, redundancies up

The number of forced redundancies correlates closely with the business cycle. Economic decline results in higher unemployment. In the period of high economic growth between 2005 and 2008, the number of redundancies more than halved.

Forced redundancies

Most redundancies for business economic reasons

Dismissal permits were mainly issued by the UWV as a result of business economic reasons, for example if a company has financial problems, reorganises or discontinues certain tasks and duties.
The recession has pushed up this share from just over 60 percent in the first eight months of 2008 to more than 80 percent in the same period of 2009. The share of dismissal permits as a result of incapacity fell from 31 percent to 14 percent.

Dismissal permits issued by UWV or Centre for work and income (CWI) by reason, per half year

Arno Sprangers and Rudolf Timmermans