The Netherlands: Economic Relief Package Extended

On May 28, 2020, the Dutch government announced that the economic relief package in connection with the coronavirus crisis will be extended by one month, to October 1, 2020. This extension will allow the government and social partners more time to make long-term arrangements to deal with the financial crisis.

Which measures are to be extended?

The “Economic Relief Package 2.0” extension pertains to:

  • the Temporary Emergency Bridging Measure to Preserve Employment (de Tijdelijke Noodmaatregel Overbrugging voor Werkbehoud);
  • the Reimbursement of Fixed Costs for SMEs (small to medium enterprises) (Tegemoetkoming Vaste Lasten MKB);
  • the Temporary Bridging Measure for Self-Employed Professionals (Tijdelijke overbruggingsregeling zelfstandig ondernemers);
  • the Coronavirus Bridging Loans (Corona Overbruggingsleningen) – the available amount is to be increased proportionally from 150 million to 200 million;
  • the tax emergency measures that were to expire prior to October 1 in the absence of a further decision, including the deferral of payment of tax debts;
  • the Temporary Wage and Income Subsidy Measure for the Dutch Caribbean territory (Tijdelijke subsidieregeling loonkosten en inkomensverlies Caribisch Nederland).

The dismissal penalty will indeed apply to NOW subsidies.

As previously discussed, in recent weeks the unions have been critical of the announcement by Wouter Koolmees, Dutch Minister of Social Affairs and Employment, that companies that dismiss employees for economic reasons while receiving NOW subsidies would not be subject to the “dismissal penalty” under NOW 2.0.

A dismissal penalty will be reintroduced after all for collective dismissal applications under the Dutch Collective Redundancy (Notification) Act (Wet melding collectief ontslag, WMCO). The WMCO applies to economic dismissals spanning a three-month period and involving 20 or more employees within a single district covered by the Employee Insurance Agency (UWV). Companies using the NOW scheme that nonetheless implement collective dismissals will see their subsidies cut by 5%, unless (i) they have reached an agreement with the union (or another employee representative body in the absence of a union) or, if they have not, (ii) they have requested mediation by a committee to be set up by the Dutch Labour Foundation (Stichting van de Arbeid).

You can find the Letter to Parliament here (in Dutch).

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.