Problems emerge as works councils' role expands

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In broad terms, works councils have become a generally accepted phenomenon in the Netherlands, and their role has expanded considerably over the years. At the same time, however, mounting problems have arisen, relating to issues such as a lack of interest in works councils among employees and the ability of individual works council members to perform their duties, which affects the performance of the works council as a whole. This raises the question of whether works councils are sufficiently capable of fulfilling their function as a 'countervailing power'. We review the evidence as of early 2002.

In broad terms, works council s (ondernemingsraden) have become a generally accepted phenomenon in the Netherlands. The legislator supports this view, as evidenced by the additional tasks allocated to works councils by many new laws over the years (NL9709130F) - a process which is by no means complete. Far-reaching decentralisation of industrial relations is one of the most important driving forces behind this development (NL9703106F). However, do works councils have the capacity to fulfil all these tasks satisfactorily? In answering this question, key factors include the extent to which the obligation to establish a works council is observed, the interest shown in works councils by employees, and the legal protection and career opportunities for works council members.

Below, we examine these issues, drawing on a number of recent pieces of research:

  • de volwassen OR (The mature works council), RH van het Kaar and JC Looise, Samsom, Alphen aan den Rijn, 1999;
  • Naleving van de Wet op de ondernemingsraden (Compliance with the Works Councils Act. State of affairs at the beginning of 2000), E Bruin and F Huijgen, Ministry of Social Affairs and Employment (SZW), The Hague, 2000;
  • Naleving van de Wet op de ondernemingsraden (Compliance with the Works Councils Act. State of affairs at the beginning of 2001), M Engelen, M van der Aalst and E Hornstra, SZW, The Hague, 2001;
  • Onderzoek samenstelling ondernemingsraden (Study into the composition of works councils), R de Vries and E Schins Derksen, SZW, The Hague, 2000; and
  • Medezeggenschap van uitzendkrachten en gedetacheerden in inlenende en uitlenende bedrijven (Participation of temps and detached workers in hiring and seconding companies), H van den Tillaart, J Warmerdam and S van den Berg, SZW, The Hague, 2001.

Obligation to establish a works council

Regular studies are carried out to determine whether companies with more than 50 employees are complying with the obligation to establish a works council. The most recent study was conducted by the Ministry of Social Affairs and Employment (SZW) in October 2001 and provides an overview of the state of affairs at the start of that year. It appears that only 71% of the companies with a workforce of more than 50 have in fact established a works council. Compliance improves in line with the size of the company: 94% for companies with 200 or more employees; 81% for companies with between 100 and 200 employees; and 58% for companies with between 50 and 100 employees. Some companies with fewer than 50 employees have also established a works council. In some cases, this step was taken voluntarily, but in others the obligation stems from a collective agreement.

In addition to size, the sector concerned also has an impact on the rate of compliance. Government bodies and public utility companies score far above average, while other sectors – including trade, hotels/restaurants/catering, repairs, transport, storage, communications and construction – record a below-average score when it comes to complying with the obligation to establish a works council.

According to the companies, the most important reasons cited for not establishing a works council are that the employees do not want one, that adequate alternative forms of consultation exist, or that there are too few candidates for works council members. Other responses are that the works council is in the process of being established or that the company itself has no desire for a works council.

Lack of interest?

The lack of interest in a works council cited by companies seems to result from there being too few potential candidates for membership, a problem that is gaining ground according to various parties involved in employee participation. In 36% of the companies with a works council, one or more seats on council are currently unoccupied. In 18% of the companies, no elections were held for the works council at the last opportunity because the number of candidates was the same as or lower than the number of seats.

The lack of enthusiasm for work related to works councils is not spread evenly across the different staff categories. The following groups are under-represented on works councils: women; employees under 25 years old; less well-educated people; people from ethnic minorities; employees with disabilities; employees with under five years' service; part-time employees; and employees who are not trade union members. Contrary to what one might assume, more highly qualified personnel and managers are over-represented.

Temporary agency workers were only recently included as a specific category under the provisions of the Works Councils Act. These employees have been awarded participation rights at the seconding company as well as at the user company if they are employed there for a continuous stretch of more than 24 months. In practice, these new regulations appear to have little effect: secondment for more than 24 months seldom occurs and participation at the seconding company is often non-existent. In cases where a works council has been established, it is largely staffed by the permanent employees of the temporary employment agency.

Career opportunities and legal protection

Apart from stemming from a subjective lack of interest among workers, a lack of interest in works councils may also arise from objective barriers. Two closely related potential barriers are: difficulties for workers in combining employee participation-related activities with their regular work; and fears of damaging their career opportunities or even losing their job.

Article 21 of the Works Councils Act contains a provision banning prejudice: an employee may not be disadvantaged because of his or her employee participation activities. The Dutch Civil Code contains provisions to protect current, former and potential works council members from losing their jobs. However, the case law on employment protection for works council members is not that clear. In 2001, there appeared to be a marginal shift to the disadvantage of employees: the competent court sometimes shifts the onus of proof to rest with the employee, although the law prescribes that the employer has to prove that the employee's dismissal is unrelated to his or her participation activities.

Recurrent research shows that in practice it is often difficult for employees to combine their duties with work related to the works council. It is difficult to free up enough time and problems often arise with immediate superiors or colleagues about the distribution of work. Of all works council members surveyed in research, 92% complain about overwork and 87% about too much work pressure. Existing facilities appear insufficient to solve these problems. Almost half the works council members believe that their relationships with colleagues are placed under a greater or lesser degree of pressure as a result.

However, a measure of differentiation should be introduced here: works council work not only poses a threat to members' careers, it can also present opportunities. No fewer than 71% of works council members surveyed are of the opinion that works council work is not damaging to their careers, while 20% believe that it is.

Performance of the works council

To what extent do the difficulties experienced by individual works council members have repercussions on the performance of the works council as a whole and the relationship with management? In comparison with research results published in 1985, today's works councils appear to have been especially successful in making sure that decision-making is more thoroughly executed and that acceptance of such decisions enjoys broader support among the workforce. However, this does not necessarily mean that works councils now have more influence over the actual decisions (NL0010109F).

The fact that relations between works councils and management are reasonably good at present within most companies is not proof of an absence of 'bottlenecks'. Relations with the broader workforce are problematic and 16% to 30% of the works councils are confronted with reluctance on the part of management. Finally, most works councils believe that their level of expertise leaves much to be desired.

Commentary

It was argued at the beginning of this article that pressure on works councils has increased due to the decentralisation of industrial relations and of the formulation of employment conditions. The legislator has also contributed. In a recent assessment of the 1996 Working Hours Act, serious doubts were raised regarding the ability of works councils adequately to fulfil all their allotted tasks under this legislation (NL0110102F). In other words, while on paper the works council is forced into acting as the 'countervailing power' in relation to the company in many situations, is it actually in a position to fulfil such demands?

Research and the observations of works council commentators increasingly question whether works councils are suitably equipped to cope with the broadening scope of their tasks. The answer is more likely to be negative. Proposed solutions vary from a quantitative expansion of available facilities to a radical 'professionalisation' of employee participation, in the sense that there should be remuneration for works council work in the future.

The legislator has announced that the 1998 Works Councils Act will be reassessed in summer 2002. At present, it appears that the topic of facilities will be one of the focal points. (Robbert van het Kaar, HSI)

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