Collective redundancies up to 20 percent more expensive for companies: “Will encourage them to organize restructuring differently”

Due to a change in the law, restructurings with collective redundancies have been on average 5 percent more expensive since 1 January 2023, with peaks of more than 20 percent. Jan Vanthournout, Senior Legal Manager at SDWorx, gives an interview with Business AM more explanation.

Listen to the full conversation with Jan Vanthournout below

In the news: SDWorx notes that due to a change in the law, the price tag of collective redundancies has risen sharply since the beginning of this year.

  • “In concrete terms, the reimbursement of the additional costs of a collective redundancy has been abolished by the NEO”, explains Vanthournout. “As a result, companies have to pay an average of 5 percent more for a collective redundancy, but in some cases the additional costs run up to 20 percent.”
  • He adds that this amendment to the law could have far-reaching consequences. “To start with, this means there is less room for extra-legal commitments,” it sounds. “In addition, employers may look for alternatives to collective redundancies in order to avoid the additional costs. For example, they will organize a restructuring in a different way.”
    • Collective redundancies occur when a certain number of employees are affected in the course of a 60-day period. In a company with 100 employees, for example, this concerns at least 10 employees.
    • “However, if the same number of redundancies is implemented, but over a longer period, then there is no collective redundancy and different rules apply,” it sounds.
  • Vanthournout advises companies when they organize a large-scale layoff round to seek advice from an expert. “In principle, that should be the starting point of a reorganization or a collective redundancy. Such an intervention is more than the sum of individual cases or individual dismissal costs. It is often a nuanced interplay of many factors.”

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