Social Plan

An employer planning a reorganisation often draws up a social plan if the reorganisation results in staff redundancies. A social plan is a collective arrangement agreed between the employer and the employees’ organisation or trade union, which sets out the provisions to which employees are entitled in the event of (collective) redundancies due to the reorganisation. The advantage of a social plan for the employer is that there is no need to negotiate a severance package with each employee individually. The advantage of a social plan for the employee is that the trade union or employees’ organisation is often in a stronger position during negotiations than individual employees, as the trade union or employees’ organisation represents all employees.