Pursuant to the Dutch Works Councils Act, every company with 50 or more employees must have a Works Council. And the Works Council naturally has the right to be informed, the right to be consulted and the right of consent. For example in the case of merger or restructuring plans, downsizing or important changes to activities and operations. Or in the case of decisions related to terms and conditions of employment, such as pensions, working hours and job evaluations.
There is a lot more, however, than the above-mentioned rights and any associated procedures at the Enterprise Chamber of the Amsterdam Court of Appeal or subdistrict court.
For example, there is the Work Council’s right of initiative, which means that the Works Council is allowed to make unsolicited proposals about all social, organisational, financial and economic matters. The employer is not allowed to disregard these proposals. In practice, we see that use is often made of this right of initiative when an important decision has actually already been taken by a (foreign) shareholder, or a foreign Executive Board. Both the Dutch director, as well as the Works Council, must realise that the Dutch Works Council is not sidelined in any way in these types of situations.
In addition, many larger Works Councils have the opportunity to nominate a candidate as supervisory director (Works Council supervisory director). The supervisory director may be expected to raise the Works Council’s points for attention at the periodic SB meetings (Supervisory Board meetings). In addition, it will also be easier for a Works Council to turn to its ‘own’ supervisory director, when important matters arise.
Due to these types of statutory rights of the Works Council, as well as the Work Council’s right to be heard during shareholder meetings and when determining positions on the remuneration policy of the directors, the Works Council has more influence that it often realises itself. A director must anticipate this in order to avoid any surprises. The Works Council, in turn, must consider carefully how and when to use its rights in an effective manner.
For this reason, the lawyers at Pallas provide strategic advice to large and small companies, as well as to Works Councils. We know both sides well and therefore have a strategic advantage. We can also make use of other specialists from our network, such as pension advisers, tax advisers, Works Council business consultants and trainers.