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WORKS COUNCIL

NETHERLANDS
ONDERNEMINGSRAAD
WORKS COUNCIL

Body composed of employees within an enterprise which has the task of promoting the interests both of the enterprise and of its workforce. In the Netherlands, the works council has its current legal basis in the 1979 Works Councils Act. This Act makes it compulsory for a works council to be set up by all employers who employ either 100 or more employees, or at least 35 employees for more than one third of normal working hours (in which case the council has slightly more limited powers). In enterprises with fewer than 35 employees, a works council is not compulsory but the employer is required to hold consultations with the workforce at least twice a year on the state of affairs in the enterprise and any particularly important matters that arise. The Act applies both to the market sector and to institutions in the non-profit-making sector. A draft at present before Parliament will, by the end of 1996, apply it also to public servants employed by central government. (Up till now, public servants have had a special participation system of their own.)

Over the past few decades the works council has increasingly evolved from being a channel for co-operation between employer and employees into a body that represents the interests of the workforce. In the first Works Councils Act (1950) the employer was still a member of, and the chair of, the works council, which was regarded as furthering the interests of the enterprise. With successive amendments of the Act (1971 and 1979), the council was given more and more powers and responsibilities and its role as a forum for representing employees' interests gained growing importance. The works council of today may be seen as a compromise between the consultation function and the representation function.

Structure and powers of the works council

Works council members are elected directly, by secret ballot, from lists of candidates drawn up by employees within the enterprise either in consultation with the unions or not.

The works council may form standing and ad hoc committees for the purposes of fulfilling its functions. The employer is obliged to provide the council and its committees with facilities for consultation meetings and time for training. In addition, since 1979 the dismissal of works council members has been prohibited in order to prevent their suffering any disadvantage as a result of occupying this position (see prohibition of dismissal ).

The council possesses various powers. The most far-reaching is the right of consent (instemmingsrecht ). Under Article 27 of the Works Councils Act, the employer must obtain the council's consent for any decision introducing, amending or withdrawing the rules on labour-related matters specified in that Article. These include rules on working hours and holidays, payment systems and job evaluation schemes, health and safety at work and the enterprise's works rules. The council's consent is not, however, required in cases where the matter concerned is already regulated by a collective agreement . Other powers are the council's right to prior consultation on economic matters (adviesrecht ), covering circumstances such as transfer of control of the company and the retrenchment, expansion or significant alteration of its activities, together with the right to regular consultation meetings with the employer and the right to information. A duty of secrecy may be imposed on the council in respect of certain types of information supplied to it. Lastly, a works council that is attached to a "structured" company possesses the power to nominate candidates for the supervisory board and in certain cases may lodge an objection to the (re-)appointment of a (new) board member.

A problem may arise in areas where the respective powers of the works council and the unions threaten to overlap. For example, an employer who is contemplating a company merger is required both to consult the works council and to give the unions the opportunity to express their view. And there are other cases where a similar conflict arises in the relationship between the works council and the workplace-level union structure . On the one hand the union may provide useful support for works council activity, but on the other the works council may pose a threat to the unions by attracting influence to itself at the expense of a union's power within the enterprise. In any case, however, the works council can offer union members a very appropriate forum for defending their interests in the workplace.

Disputes may arise between the council and the employer over the application of the Works Councils Act. For the purposes of resolving any such disputes, the Act contains a provision whereby both the council and the employer may, if earlier mediation by a Joint Sectoral Committee has failed, apply to the courts for a ruling on the issue. In cases where an employer has ignored the council's advice on management decisions as referred to in Article 25 of the Act, the council possesses a right of appeal to a special court, the Companies Division of the Amsterdam Court of Appeal.

So far, councils have actually been set up in 90 per cent. of Dutch enterprises with 100 or more employees and 60 per cent. of those with 35-99 employees. (Since these enterprises for which a works council is mandatory are not obliged to have a safety committee as required in smaller enterprises, in the respectively remaining 10 per cent. and 40 per cent. of enterprises still without a works council the sole form of protection as regards working conditions is external enforcement by the Labour Inspectorate .)

The works councils appear to concern themselves mainly with labour-related, organizational and technical production matters and less with financial and economic aspects. Also, they monitor the employer's policy rather than make proposals of their own. Employers appear to give the council's views serious consideration in their decision-making.



Please note: the European industrial relations glossaries were compiled between 1991 and 2003 and are not updated. For current material see the European industrial relations dictionary.

Page last updated: 14 August, 2009