First Chamber approves revised Works Councils Act

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In February 1998, the First Chamber of the Dutch Parliament approved the new Works Councils Act. A few days earlier, a research report had revealed that many small companies fail to comply with the requirements either to establish a works council or to hold regular meetings of staff.

On 10 February 1998, the First Chamber of the Dutch Parliament approved the new Works Councils Act, which was to come into force on 1 March. The primary aim of the legislation is to modernise the old Works Councils Act (Wet op de ondernemingsraden, WOR), and some of the changes signalled a clear break with the past. The most far-reaching of these is the change in the thresholds for small, medium-sized and large companies. From now on, all companies employing more than 50 (formerly 35) employees must establish a works council. For companies employing fewer than 50 employees the new law introduces the notion of a "personnel forum" (personeelsvertegenwoordiging), a kind of mini-works council. Employers in these companies must set up a personnel forum if requested by more than 50% of the employees. Otherwise, they must organise a biannual meeting of all employees. Formerly, this requirement applied only to companies employing between 10 and 35 employees.

Almost at the same time as the First Chamber’s decision to pass the law, the results of a study on the observance of the Works Councils Act were published ("Naleving van de Wet op de ondernemingsraden - Stand van zaken 1977", PRA Oeij and P Stoppelenburg, The Hague, Vuga (1998)). The figures show that 91% of companies with over 100 employees have established a works council. This figure is only 75% for companies with more than 35 but fewer than 100 employees. Now that the new law relaxes the works councils requirement in companies with fewer than 50 employees, it is interesting to examine the track record of companies employing 35 to 50 people and those employing 50 to 99.

Only 50% of companies with 35-50 employees had established a works council. The corresponding figure for companies with 50-99 employees is 84%. This figure is generally higher for companies covered by a collective agreement or those with a group of active union members. The most commonly cited reason for not having established a works council is a lack of employee interest and/or not enough candidates.

In addition, compliance has been rather poor regarding the all-personnel biannual meeting requirement, and this has become worse over time: while 65% of the companies regularly held such meetings in 1992, only 59% did so in 1997.

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