Takeover and reorganisation: when are you allowed to let your staff go?

On 6 February 2026, the Supreme Court (in Dutch ‘Hoge Raad’) issued an important ruling on dismissal after a transfer of undertaking (ECLI:NL:HR:2026:204). The decision clarifies how the prohibition on dismissal due to a transfer of undertaking relates to dismissal due to economic circumstances (the so-called ETO reasons) and shows that, under certain circumstances, employers have more scope to restructure their organisation after a takeover. This ruling provides important guidance, particularly when positions no longer fit within the new structure after integration or centralisation — an issue that has been a source of debate for years.

Legal framework

In the event of a transfer of undertaking, the basic principle is that employees are automatically transferred to the new employer, retaining their rights and terms of employment. The law also contains a prohibition on dismissal due to a transfer of undertaking; an employee may not be dismissed solely because the undertaking is being transferred. Dismissal is only permitted on economic, technical or organisational grounds that entail changes in employment (the so-called ETO grounds). In practice, however, this often proved difficult to apply. After all, reorganisations following a takeover are almost always related in some way to that transfer, making it unclear when there was still an independent ETO reason and when the dismissal should nevertheless be regarded as 'due to the transfer'.

Background to the case

The case before the Supreme Court concerned a supermarket that became part of a larger organisation after a takeover. The employee in question worked there as a personnel officer/HR manager for eight hours a week. This position did not exist within the new owner's organisation: personnel administration was organised centrally and the other HR tasks were assigned to managers on the work floor.

Shortly after the transfer, dismissal proceedings were therefore initiated on economic grounds. The employee argued that the dismissal was in fact caused by the transfer itself and was therefore contrary to the prohibition on dismissal due to a transfer of undertaking. She also argued that the transferee had not sufficiently investigated whether she could be redeployed, for example in an administrative HR position or as an HR advisor.

Judgment of the Supreme Court

The Supreme Court confirmed that a transfer of undertaking in itself cannot be a reason for dismissal. At the same time, the Supreme Court made it clear that dismissal is possible if there are economic, technical or organisational reasons that entail changes in employment (so-called ETO reasons).

It is important to clarify the criterion that the reason for dismissal must not have an 'intrinsic connection' with the transfer. According to the Supreme Court, this does not mean that there can be no connection at all. In practice, a certain degree of connection is often unavoidable. The decisive factor is whether the reason can be justified independently in terms of content, for example because the position does not fit within the operating model or organisation of the transferee.

In this case, the Supreme Court found it sufficient that the employer had opted for a different structure of the business operations, as a result of which the position in question had become structurally redundant. The dismissal was therefore upheld.

Significance for practice

This ruling is relevant for employers who wish to restructure their organisation and eliminate positions after a takeover. The Supreme Court confirms that a reorganisation after a transfer is possible, provided that it can be substantiated by genuine commercial or organisational reasons and is not solely motivated by the transfer itself. The fact that there is a link between the transfer and the reason for dismissal does not preclude a legally valid dismissal.

The ruling is in line with the recent amendment to the UWV's implementing rules, which explicitly states that the transferee may also have an independent business reason for dismissal after a transfer, for example due to the integration or centralisation of activities.

Practical advice

For employers preparing for a takeover, this ruling underlines the importance of a thorough organisational and legal analysis in advance. Identify in good time which positions fit into the new structure and which do not, and document the business reasons for any changes.

A carefully substantiated reorganisation not only reduces the risk of legal proceedings, but also provides clarity for employees and employee participation bodies. Our message is therefore: do not view a transfer of undertaking as an obstacle to necessary adjustments, but ensure that these adjustments are well prepared and justified.