Netherlands: EIRO CAR on “The effect of the Information and Consultation Directive on Industrial Relations in the EU Member States five years after its transposition

  • Observatory: EurWORK
  • Topic:
  • Participation at work,
  • Labour and social regulation,
  • Industrial relations,
  • Published on: 18 January 2011



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Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

In more than 70% of the firms with 50 employees or more, a works council has been installed. Compared to other EU-countries, I&C rights in the Netherlands are extensive. The situation since the early 1980’s is rather stable, both from a legislative point of view and in a practical sense.

Question 1: Trends in the incidence of undertaking- and/or establishment-level information and consultation bodies

(a) Using official statistics where possible, please provide annual data for the years 2005-2009 (inclusive) on the number and proportion (%) of undertakings and/or establishments which have an information and consultation (I&C) body or equivalent.

In 2008, 70% of the establishments with 50 or more employees had installed a works council (2005: 76%). In establishments with 10-49 employees, 15% had a works council, 14% a personeelsvertegenwoordiging (a kind of mini-works council) and 55% held a personnel meeting every now and then.

(b) Where possible, please provide data to show trends in the uptake of I&C bodies by:

(i) size of undertakings/establishments in terms of employment levels (i.e. under 50 employees, 50-99 employees, 100-199 employees; 200-499 employees, 500 or more employees or other appropriate size bands used in national statistics)

Size of undertakings/establishments in terms of employment levels
 

10-49

50-74

75-99

100-199

200+

WC

15%

62%

72%

81%

95%

Pvt

14%

13%

6%

3%

1%

PV

55%

23%

17%

9%

2%

No I&C

17%

12%

6%

7%

3%

WC = works council, Pvt = mini-works council, PV = personnel meeting. Figures 2008.

(ii) sector (broadly defined, i.e. industry/manufacturing, private services, public services).

Figures for 2008, percentage of works councils per sector in firms with 50 or more employees (compliance rate)

Sector

Percentage

Agriculture/fishery
Mining
Industry I
Industry II
Public utilities
Construction
Commerce
Transport & communication
Banking & insurance
Other services
Public administration

(c) Please provide information on the extent of I&C arrangements in:

  1. smaller undertakings (those with fewer than 50 employees)

See above

  1. public administration.

See above

(d) What factors explain any increase/decrease in the incidence of I&C bodies (e.g. economic climate, legislative change, other)?

The decrease between 2005 and 2008 at first sight looks remarkable. The figure has been hovering around 71% since 2001, then suddenly rose to 76% in 2005 and then dropped again to 71% in 2008. The explanation given for the drop is the increase in the number of SMEs (which have a lower compliance rate, see above). Personally, I think it is the rise in 2005 which needs explanation (RvhK). No changes in legal regime.

Question 2: Procedures for establishing I&C bodies

(a) What are the procedures for establishing I&C bodies in your country? For example, are I&C bodies mandatory (i.e. employers are obliged by law to establish them), or is their establishment dependent on employees/trade unions triggering statutory procedures? In the latter case, who can initiate the procedure? Is there a specified level of employee support required?

Above 50 employees, works councils are mandatory (employees and unions can go to court to oblige an employer to comply). Between 10 and 50 employees, a mini works council is voluntary, unless more than 50% of the employees issue a demand. In case no (mini) works council has been established in firms with 10-5- employees, a biannual meeting with the employees is mandatory.

(b) Please supply any available data on the extent to which I&C bodies have been:

(i) requested by employees

(ii) requested by trade unions

(iii) initiated unilaterally by employers.

See under (a) above for works councils. With regard to the mini works councils:

Information&Consultation – Percentage requested or initiated
 

2005

2008

Voluntarily by the employer

61%

84%

On request of the majority of the employees

25%

9%

Both (!?, RvhK)

14%

7%

There are no figures on trade unions requesting the establishment of I&C bodies.

(c) Have the national government and/or the social partners in your country actively promoted the establishment of I&C bodies? If so, how have they done this?

In 2005, the Ministry of Social Affairs and Employment has started a project with the aim to increase the quality of co-determination. Part of the project was the establishment of a so-called ambassador network, consisting of employers, with the aim to promote works councils, including their establishment.

In the past (1980s and 19990s) unions have organised campaigns to increase the number of works councils in transport and construction.

(d) What explains the absence of I&C bodies in some undertakings/establishments in which I&C bodies are supposedly mandatory or the statutory right to trigger their introduction applies?

Main reasons given by employers for absence of I&C bodies (2008)

Reasons

%

Not enough candidates
Work stress/not enough time for employees
Employees not interested
Employer not interested
Sufficient alternative I&C forms
WC is being established
WC did not function (sufficiently)
Employer unaware of obligation
Only just passed the threshold of 50 employees
Other reasons

The above does not (or only partially) explain the differences in compliance between sectors and firms of different size.

Question 3: Constitutional provisions

(a) Are the structure, rights and functioning of I&C bodies in your country determined by:

(i) statutory requirements that apply to all establishments/undertakings

(ii) organisation-specific agreements/arrangements that may differ from the statutory provisions, providing the scope for organisations to vary the design of the I&C body and the processes of information provision and consultation

(iii) a mixture of the two.

Statutory requirements are the main instruments. In some collective sector agreements, the threshold for works councils has been lowered to 25 or 35 employees. On the company level, employer and works council can agree to make better arrangements for works councils than stipulated by law (e.g. entitlement to training and time off, scope of I&C-rights).

In many sector agreements, works councils are entitled (or even requested) to elaborate arrangements agreed between the social partners, mainly on working time. Many sector agreements have been declared generally binding. There is some debate whether arrangements that leave discretionary scope to works councils can be declared generally binding (probably not, RvhK).

(b) To what extent can and do organisation-specific agreements/arrangements differ from national statutory requirements on I&C? What motivates the parties to introduce such agreements/arrangements? Please summarise any available data on the provisions of organisation-specific agreements/arrangements.

See above. It is not allowed to differ downwards (less rights for works councils). The motivation varies. Sometimes works councils exchange a concession on one issue for an extra right on another issue. No quantitative data available.

(c) Are the terms of organisation-specific agreements/arrangements enforceable? What procedures – e.g. complaint to external administrative or judicial authorities (please specify which) – are available for this purpose?

Organisation specific agreements (if sufficiently clear) can be enforced in court along the normal enforcement procedures in the Law on works councils, or sometimes the Law on collective agreements (when these agreements are part of the collective agreement).

Question 4: The main subjects for I&C

(a) What types of information are regularly provided by senior management to I&C bodies? Please give examples.

The works council is entitled to all information it reasonably needs, including major strategic information. The employer may not withhold information on the ground that it is confidential etc. (like in the directive on EWCs or SEs). In practice, there is of course a lot of difference between works councils in the extent to which they are effectively informed. There are several examples where the level of information is very high, even including ‘insider trading’ information, like in the case of the takeover of ABNAmro by the consortium of RBS, Fortis and Banco Santander), or in the fight for control between Stork and private equity/hedge funds. On the other hand, many works councils complain they get insufficient information, and/or too late.

(b) What issues are typically the subject of consultation between management and employee representatives? Please give examples.

All major strategic decisions, including restructuring, mergers and takeovers, relocation, investments. Furthermore: most issues with regard to the terms of employment (at least when not fully covered by collective agreements).

(c) What issues are typically raised by employee representatives themselves? Please give examples.

Most works councils concentrate on issues that are close to their colleagues (working time issues, working conditions).

(d) Since the onset of the recession, to what extent have I&C bodies been a vehicle for dialogue and consultation over management decisions concerning restructuring and recession-related developments? Please provide a general overview with evidence and examples.

In a qualitative sense, nothing much has changed, except that in the case of part time unemployment arrangement, the works council has to consent when the unions are absent. Of course, the number of restructuring operations has increased (although not so dramatically as in many other countries), but the way things are handled does not seem to have changed much. There has been no increase in court cases, or in the number of large scale conflicts. Works councils render their advice, and (in most cases) unions negotiate a social plan (although that has of course in many cases become tougher).

A large part of the burden of the recession has been carried by temp workers and employees with fixed term contracts. Works council rights with regard to these categories of employees are absent or weak.

Question 5: The nature and extent of the I&C process

(a) How often do I&C bodies typically meet with management? Is it common practice for special meetings of the I&C body to be called to consider urgent or important matters? If so, on what issues?

The most recent research dates from 1998. The average number of meetings with management was 8.5 meetings per year (varying between 0 and 48). Works councils on average meet 14 times a year (varying from almost 0 to 40-50). Special meetings for urgent matters are common.

(b) How does consultation take place? For example, is information on proposed changes provided by management so that employee representatives can prepare a considered view? Do managers provide a reasoned response to employee representatives’ opinions? Examples of good and poor practice would be helpful.

The answer to the second and third questions is yes. Again of course, in practice there are large variations. In the abovementioned research from 1998 42% of the works councils (and 46% of the employers) were of the opinion that the works councils were informed and consulted in due time. 32% of the works councils (and 26% of the employers) stated that works councils are only involved in the final stages of the decision making process. 18% of the works councils and 21% of the employers stated that works council involvement was restricted to the consequences of decision making for the employees, not the decision making process itself.

In 15% of the cases where consultation should have taken place, this did not happen.

(c) Is information usually provided on a confidential basis to the I&C body before management decisions are taken and announced? Are there examples of I&C not taking place due to confidentiality considerations?

To the first question: in many, or probably most cases, yes. And there are also examples of I&C not taking place, although the employer then runs the (legal) risk that the decision will be blocked in court. Sometimes in listed companies, confidentiality is a problem out of fear for insider trading, especially for non-Dutch companies.

(d) Please outline what guarantees and protections employee representatives usually have, e.g. time off work, training, material and financial resources, facilities, protection against dismissal/ discrimination, access to workers.

Employee reps have all of the abovementioned guarantees. Works council members may not be dismissed, unless in case of summary dismissal or restructuring. In the latter case the employer has to proof that the dismissal is not related to co-determination activities of the employee. Former works council members and candidates are also protected. There is a legal minimum of time off rights.

(e) Can employee representatives seek external advice on how to handle difficult topics for consultation (e.g. from trade unions, external consultants)? In the case of the latter, who pays?

Yes, they have this right. The employer pays, on the condition that he has been informed beforehand (no permission is requested). When the works council has a yearly budget, the expert is paid out of that budget. Since the outbreak of the recession, the number of conflicts on this issue of paying the bill of the expert seems to rise (more court cases).

Question 6: Practical outcomes of consultation

(a) What evidence is there, if any, of the consultation process resulting in the modification of management decisions and/or the process or timetable for their implementation? Please give an overview of the impact of consultation with examples.

Again, the latest research dates from 1998 (but the picture has not changed very much since).

With regard to strategic decisions (where the WC has the right to render advice), works councils stated that:

Practical outcomes of consultation (%)
The proposed decision has been cancelled following consultation

2%

The proposed decision has been modified following consultation

21%

Positive advice

68%

Decision not taken notwithstanding positive advice

1%

Decision taken notwithstanding negative advice

6%

Advice works council partially followed by employer

1%

With regard to social arrangements (right of consent), the picture is as follows:

Cases where the employer has asked for consent, and the WC has refused:

CASES

%

Employer has decided to cancel the proposed decision

36%

Employer has changed the decision in line with WC wishes

50%

Employer has decided notwithstanding refusal WC

13%

14% of the works councils stated that the employer had unjustly not asked for consent in one or more cases.

(b) How many complaints per year concerning the operation of I&C procedures (e.g. employers not consulting in circumstances where consultation is obligatory) have been lodged with administrative or judicial authorities since 2005? Who were the claimants and what were the key issues? What proportion of these applications were upheld? What sanctions were imposed?

The yearly average of the number of court decisions is around 20 (only I&C, not other cases where works councils were involved). Court decisions are around 50% of the cases brought to court, so the figure since 2005 will be around 200.

On strategic issues (mergers, restructuring etc.) the claimants are works councils. On social arrangement issues (mostly working time in so far as not covered by collective agreements) the claimants are either works councils (when they have not been consulted) or employers (when works councils have not consented in changes the employer wanted to make). In both cases, employers win around 60% of the cases and works councils 40%.

Key issues are mergers and restructuring (right of advice) and working time arrangements (right of consent).

When the works council wins a case on strategic decisions, in most cases the employer is not allowed to take the decision. When he has already started implementing the decision, in most cases he has to undo the measures taken. When the employer wins, he can implement the contested decision.

When the works council wins a case on social arrangements (right of consent), the employer either has to ask for consent (when he has unjustly no done so), or is not allowed to implement the decision. When the employer wins, he can implement the contested decision.

Question 7: Relationship between I&C bodies and other forms of employee voice

(a) Can, and if so do, trade unions play a part in the establishment of I&C bodies and in their operation? Do external trade union officers often sit on I&C bodies? How common is it for I&C bodies to include both union and non-union employee representatives?

It is rather exceptional that unions take the initiative. External trade union officers are not allowed as members of I&C bodies. More than 50% of the I&C bodies are union member (union density among employees around 22%), although there are large variations among bodies, ranging from union free to completely unionised.

(b) Is there any overlap between the remit of I&C bodies and trade union-based collective bargaining? If so, how are such issues resolved?

There is some overlap, but not much. In many cases, collective agreements contain many framework provisions that have to be filled in by works councils at the company level (especially on working time, hardly on pay). Conflicts are very rare.

(c) Is the consultation required by the collective redundancies/transfer of undertakings Directives carried out via I&C bodies, trade unions or other employee representatives?

By both.

(d) Is the use of direct forms of employee involvement by management through such things as team briefings seen as complementary to or in competition with the I&C body?

Generally, they are seen as complementary. However, some employers (mainly from the group that has not established a works council, but also from some that have) prefer direct involvement to I&C bodies. A recurring theme among at least part of the employers is that the regulatory framework is too rigid. In politics, this view is heard most frequently from the liberal parties (VVD and D66).

Question 8: Views of the social partners

(a) What are the attitudes of the main employer and trade union organisations in your country towards (i) the value or necessity of I&C bodies and (ii) the operation of I&C bodies in practice, especially in a recession?

The official view of these organisations is that I&C bodies are both necessary and of great value. On their operation in practice, there is more criticism, especially among employers. The criticism concentrates on the slowing down of the decision making process and sometimes on the quality of the feedback they get from works councils.

(b) Have the social partners, jointly or separately, conducted any review of the operation of the national regulatory framework governing I&C? What is their assessment of its effectiveness? Is there any pressure from the social partners for reform?

Traditionally, the social partners are to some extent divided on the regulatory framework. The review/assessment of (part or whole of) the framework usually takes place in the tripartite Social and Economic Council, most recently in 2008 on the issue of I&C in large internationals.

There is no real pressure for reform. Overall, the social partners are positive on the Dutch legal I&C framework, although the unions try to extend works council rights (but not by much). In the past (2005), employers’ organisations have pleaded for the possibility that employers and works councils should be allowed to decrease works council rights by contract. Unions have strongly opposed this.

Every now and then (some) employers propose to increase the possibility for works councils to conduct collective agreements (that are binding for individual employees). Unions strongly oppose this.

In December 2009, the former Cabinet has issued a consultation document with the aim to amend the law. The document does not propose any major changes.

Commentary by national correspondents

I&C is well established in the Netherlands, more or less since 1979. There is no (major) debate on I&C. Compared to other countries, I&C rights in the Netherlands are very strong (in my view stronger than in any other EU country), partly compensating (compared to e.g. Germany, Austria, Sweden) for the weak participation (employee board level representation) rights.

References:

Ministerie van SZW, Naleving van de Wet op de ondernemingsraden, Den Haag: 2009.

R.H. van het Kaar en J.C. Looise, De volwassen OR, Alphen aan den Rijn: Samsom, 1999.

Robbert van het Kaar, HSI

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