Changes to works councils law affect training budget

The Netherlands’ Works Councils Act was recently amended for the first time in 15 years. The changes to the legislation are not very wide-ranging, but they are significant. The main changes apply to the funding of training and education for works council members. Other issues include simplification of the election process for works council members, the right to information about the structure of international groups of companies and conflict resolution procedures.

Background

The Works Councils Act (WOR) was first enacted in 1950. There have been seven major revisions of the act since it first came into force (NL9709130F). An eighth revision has been made this year, 15 years after the last significant changes, and came into force on 19 July 2013.

The core rights of the works council remain the same – information rights, the right to advise on strategic decisions and the right of consent to social arrangements. However, there are some important changes:

  • the system of training and education for works council members has been overhauled;
  • the right to information on group structures has been broadened to include international groups;
  • the threshold for non-organised employees to stand as candidates for works council elections has been abolished;
  • the procedure for conflicts has been modified;

Training and education

Works council members are entitled to at least five days of training and education per year. Under the previous act, training finance was partly subsidised by a small tax paid by every employer with more than 50 employees. This has been abolished.

Under the new act, the employer and works council have to negotiate the costs and budget for training and education. The new act, however, also explicitly states that works council members are entitled to at least five days of training and education ‘of sufficient quality’, and that the costs are to be borne by the employer.

Information rights

The works council has a number of rights to information from the company. These include the right to ask for addition information. There is also the right to receive information on the structure of any group of companies of which the employer is part, and information about the power relationships within this group. This right has been extended to international groups.

These changes were triggered by major restructuring operations in the Netherlands by some international groups, leading the Dutch Parliament to vote in favour of making sure employee representatives had more influence on such operations.

Elections

Traditionally, candidates for works council elections could be nominated either by the unions, or by at least a third (up to a maximum of 30) of their non-union fellow employees. This threshold was removed by an amendment as the bill passed through parliament, but the change has been criticised by opponents who believe there is a need for candidates to have some kind of social basis for their nomination. However, the new act now makes it possible for any employee to stand as a candidate if they have worked at the company for at least a year.

Conflict procedure

Some legal procedures, where there are conflicts between the works council and the employer, cannot be resolved through normal negotiations. Conflicts about major strategic decisions, including mergers and acquisitions, investments and restructuring, have to be referred to the Enterprise Chamber of the Amsterdam Court of Appeal. This arrangement remains unchanged.

All other conflicts are to be resolved in the normal civil courts (Rechtbank). Under the previous act, before taking a case to the civil court, the parties concerned had to follow an obligatory mediation procedure at a bipartite committee made up of union representatives and employers. This obligation has been removed but the committees remain in place and the procedure can still be followed voluntarily.

Other changes

There is one significant new provision among the remaining technical changes, the setting up of a new tripartite committee to promote worker involvement. Known as the Commission for the Promotion of Participation (CBM), it is a subcommittee of the tripartite Social and Economic Council (SER). It reflects the importance that parliament attaches to worker involvement.

Commentary

Although the main characteristics of the Works Councils Act remain unchanged and preserve the importance of works councils in the Dutch industrial relations structure, the changes are significant.

Concerns remain about the social basis of candidates in works council elections and recommendations that a minimum requirement of support for candidates should be reintroduced are being considered.

Although it is too early to judge the effects of the changes in the training and education system, there already appears to have been a significant drop of 30–40% in the use of training and education courses by works councils compared to 2012. However, this may also be due to the effects of the crisis on companies’ training and education budgets.

Robbert van het Kaar, AIAS/HSI

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