On 1 April 2009, a new Regulation on part-time unemployment and partial state unemployment benefits came into force (the "Regulation").
The Regulation is intended to assist companies in the Netherlands that are healthy enough to survive the current economic crisis, to over-come a temporary shortfall in business and to prevent lay-offs. The Regulation allows for a scheme (the "Scheme") pursuant to which employers may obtain consent on a temporary reduction of working hours of their employees up to a maximum of 50%. In respect of any reduced working hours, the employee will receive state unemployment benefits (deeltijd-WW) from the governmental Social Security Agency ("UWV Werkbedrijf").
The Scheme may be applied to all types of employees, e.g. full-time employees, part-time employees and flex-time (on call) employees. The employees will remain employed with the employer and are not obliged to apply for other jobs or follow a reintegration procedure (which is usually required when receiving state unemployment benefits). Consent from trade unions or the (internal) employee representative body or, absent any of those, the individual employees involved will be required. Often, the employees or their representatives will attempt to bargain for the company to supplement any loss of income, in return for their consent, thus reducing the potential cost savings for the company.
Sanctions (basically the obligation for the company to reimburse to UWV Werkbedrijf any state unemployment benefits granted to employees under the Scheme) will apply if the company does not observe the Scheme rules and, most importantly, if the company would make any of the employees involved in the Scheme redundant during the Period (as defined below) or a certain subsequent time-frame (of at least 13 weeks).
Please note that the latter aspect would retro-actively eliminate any benefits the company may derive from the Scheme. If the company anticipates having to make employees redundant during the Period or in the subsequent time-frame, applying for the Scheme will not make much sense.
If admitted, an employer may apply the Scheme during an initial period of 13 weeks, which period may subsequently be extended twice at the discretion of the UWV Werkbedrijf for a 26 week period each. The maximum total duration is thus 65 weeks. Any period during which the Scheme may be applied, will in this memo be referred to as the "Period".
The Ministry of Social Affairs and Employment (the "Ministry") has made available a budget of EUR 375 million to finance the Scheme and reserved the right to close/cease the Scheme after three months (i.e. as per 1 July 2009 or later) if that budget has been fully used by then.
The Scheme will be closed in any event as per 1 January 2010. That means that no companies will be admitted to the Scheme after that date and that each company admitted to the Scheme must commence applying the Scheme prior to that date. Extension of the Period in respect of already admitted companies may still be granted post 1 January 2010.
The intention of the Regulation is to have the employees re-instated in their full contractual working hours upon expiry of the Period.
