Reconciliation of Interests and Social Plan

Operational realignments, downsizing or relocation of parts of a business, mergers, splits and closures are operational changes under labor law. Fundamental changes in the company’s organization, processes or the equipment used are also changes in operations which may suggest or even necessitate personnel changes.

In the case of operational changes, in many countries, under certain conditions the company and the employees have the instrument of reconciliation of interests at their disposal, which can be used to mitigate social hardship. In Germany, these conditions are met for companies that exceed a critical size of 20 employees, that have a works council, and where the planned change in operations will cause significant disadvantages for employees. Please, apply the national regulations in your country. The latter can be significantly longer journeys to the workplace, reductions in income or job cuts. With regard to the conditions in detail, consultation with an experienced local labor lawyer is recommended.

Plans concerning these interests are almost always discussed, negotiated and agreed together with social plans. This is because employee representatives tend to agree more to the reconciliation of interests if the conditions in the social plan are better for the employees affected.

In each country, the local regulations should be applied.


What are your challenges?

Restart Dialogue