State Secretary Struycken: “Currently, employees are well protected outside of bankruptcy, but they lose this protection in the event of bankruptcy. With this law, we aim to balance these differences in protection in the case of a restart from bankruptcy.”

It will be mandatory to include most employees in a restart. This way, employees are better protected and an extra threshold is created to prevent abuse of the bankruptcy procedure. A restart alone should no longer be a reason not to offer employees an employment contract. Currently, entrepreneurs who take over a bankrupt company can choose which employees to include. They can also generally determine the terms of employment they offer these employees. This will change with the new bill. The bill also regulates the right of the works council, staff representation, and the staff meeting to give advice on the proposed transfer of the business.

Business economic reasons such as a reduction in the number of customers, relocation of the company, or automation may still be reasons to take fewer employees along. In these cases, the bill also provides extra protection. If not all employees are included, selection must take place based on objective criteria. The selection will thus occur in a similar manner as in layoffs for business economic reasons outside of bankruptcy. This way, even the most vulnerable employees can qualify for an employment contract, which they often miss out on now. The bankruptcy judge involved determines whether the selection is done objectively and transparently. This way, the employee receives as much protection as possible as outside of bankruptcy. The rules will not apply to small businesses with fewer than 20 employees unless the purchasing entrepreneur chooses otherwise.

The bill also includes the automatic lapse of a non-compete clause at the end of an employment relationship if an employee is not offered an employment contract before that time. This allows employees who do not receive an employment contract to quickly find another job. Currently, a contractual non-compete clause does not lapse in the event of bankruptcy.