The works council’s most important rights are the right to issue a formal opinion (Section 25 Dutch Works Councils Act (WOR)) and the right of consent (Section 27 WOR).
Works council’s right to issue a formal opinion (Section 25 WOR)
The works council’s right to issue a formal opinion relates to important financial-commercial activities. The company affords the works council the opportunity to issue a formal opinion regarding various proposed strategic decisions, such as:
- transfer control of the company (or part of the company);
- discontinuation of the company’s business (or a significant part thereof);
- significant change in the organisation or division of power within the company (reorganisations).
The formal opinion must be requested in a timely manner so that it may materially influence the decision to be taken by the company. If the company’s final decision does not correspond to the works council’s formal opinion, the #company# will be obliged to suspend its decision for one month (waiting period). The one-month period will commence after the company has notified the works council of the decision.
Rights of the works council
The works council may appeal a company decision that does not accord with the works council’s formal opinion to the Enterprise Section of the Amsterdam Court of Appeal. The appeal must be instituted within one month after the company has notified the works council of the decision. An appeal may also be instituted if the works council later learns of facts and circumstances that it contends would have resulted in a different formal opinion if this complete information had been available to it when the formal opinion was rendered;
The Enterprise Section will assess whether the company could have reasonably arrived at the decision when taking all its interests into account. The Enterprise Section places great importance on companies following a fair and transparent procedure to obtain a formal opinion, and the works council actually being afforded an opportunity to influence the final decision-making. The Enterprise Section may, among other things, enjoin the company from implementing all or part of the decision and/or from engaging in certain transactions.
Right of consent (Section 27 WOR)
The right of consent regards the social policy. The company requires the works council’s consent for every proposed resolution to establish, change, or revoke various schemes, such as those regarding:
- pension agreements, profit-sharing schemes, or savings schemes;
- remuneration and job ranking systems;
- working conditions, absence due to illness, and re-integration policies;
- processing and protecting personal data;
- a procedure for handling reports of suspected irregularities as meant in the Dutch House for Whisteblowers Act.
The works council’s consent will not be required if the matter is already substantively governed by a collective bargaining agreement or by employment benefit rules established by a public-law body.
A company resolution that regards the aforementioned topics to which the works council has not consented or which has not been alternatively approved by the Sub-district Court will be null and void, provided that the works council has invoked that nullity in writing in good time. Nullity must be invoked within one month after the company has notified the works council of the resolution. If no notification has been made, the one-month term will commence on the date the works council becomes aware of the company’s implementation or application of such a scheme.
Assistance with setting up a works council
This information is intended to provide you with a general overview of the works council’s rights so that you may better understand the works council’s position. Please contact us at +31202351150 or via the contact form with specific questions you may have about a works council’s right to issue a formal opinion or right of consent. We can also help you set up a works council. A company is obliged to set up a works council if it employs more than 50 people on a structural basis.