The position of workers in the new restructuring instrument: the WHOA agreement, TRA 2021/84

With the introduction of the Homologation Private Agreement Act on Jan. 1, 2021, a new restructuring tool is available for entrepreneurs in serious financial trouble. Such a WHOA agreement binds all creditors, even if they have not agreed to it. At first glance, employees are exempted from this arrangement; their rights remain unaffected. This contribution examines whether they are actually completely "buut-free" and to what extent the conclusion of such an agreement affects the (im)possibilities for employers to let jobs lapse or to adjust employment conditions. The role of the works council in a WHOA procedure is also discussed.

1. Introduction

On January 1, 2021, the Private Arrangement Homologation Act ("WHOA") entered into force.3 This Act, which has been given a place in a new section of the Bankruptcy Act (Articles 369 through 387 Fw), offers companies the possibility of restructuring their debts by means of an arrangement. The agreement can be approved (homologated) by the court, which - unlike before - also binds opposing creditors to it. The law thus introduces a new reorganization instrument, but has received little attention in labor law Holland. That will be a consequence of the exceptional position the law gives to employees and their rights. Already the first article of the regulation, in article 369 subsection 4 Fw, states:

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