In a recent article we discussed the Temporary Emergency Measure Bridging Employment (NOW). The subsidy from this scheme comes with obligations for employers. If these obligations are not (fully) met, a sanction may be imposed. This article looks at the question whether you can still lay off employees during the granting of the NOW subsidy and whether you can reorganise.
Employers’ obligations during provision of NOW subsidy
The obligations which apply during the granting of the subsidy:
- Keeping the wage bill equal to January 2020;
- Not dismissing an employee via the UWV on the a-ground;
- Only using the subsidy for wage costs;
- Consultation with the employee participation body;
- Other administrative obligations.
Can I still dismiss employees if I have applied for the NOW subsidy?
Yes, you can still dismiss employees. However, this does have consequences for the NOW subsidy if you dismiss employees via the UWV on the a-ground (business economic reasons). An obligation for the use of the NOW scheme is, among other things, that the employer, when applying, doesn’t apply for dismissal for business economic reasons for its employees during the period in which the subsidy is granted.
If you do dismiss employees for business economic reasons during the grant period, a financial sanction may be imposed. In the event of a violation, your wage bill will be reduced and a fine will be imposed, as a result of which the subsidy will be much lower. This is because the wage and salary bill is reduced by the wage and salary received by an employee in the declaration period used, multiplied by 1.5.
In short, it is possible to apply for a NOW subsidy and submit a resignation application on the a-ground. You will have to make a financial assessment. After all, when an employee is dismissed, the employer receives less wage compensation.
For other grounds for dismissal, the regular rules apply. For an employee who, for example, is dysfunctional, a request for dissolution can still be submitted to the court.
Furthermore, a settlement agreement (termination by mutual consent) can still be concluded with an employee, even if the dismissal is based on business economic reasons. The NOW scheme is only linked to dismissal via the UWV on the a-ground.
Can I reorganise if I receive a NOW subsidy?
In principle, you can continue your reorganisation. If you apply for a NOW subsidy, this will of course have consequences for the amount of that subsidy. This is regardless of whether your reorganisation is related to the corona crisis. Here too, therefore, you will have to make a financial assessment.
You can, however, prepare for your reorganisation if you have applied for a NOW subsidy. The reorganisation plan can be drawn up and you can already enter into consultation with your participation body. However, you cannot yet turn to the UWV if you want to prevent your NOW subsidy from being reduced. However, you can – as already appointed – conclude a settlement agreement. This will, of course, reduce the subsidy if the wage bill is lower than the stated wage bill.
More information from our employment lawyers?
For more information about employment law and the corona crisis, please contact the employment lawyers of LVH Advocaten in Rotterdam.
