Brief Description of Employees’ and Employers’ Associations
Only in case of a collective dismissal, or if provided by a Collective Labour Agreement, the employer is obliged to inform the trade unions when it reports its intention to implement the dismissal to the Employee Insurance Agency. The dismissal can be reported to the trade unions by sending them a copy of the written notification to the Employee Insurance Agency (provided that any applicable Collective Labour Agreement does not oblige the employer to inform the trade unions at an earlier stage).
As set out under section VIII. part 2. above, after the report has been made, there is a one-month waiting period. No waiting period applies if the report is accompanied by a statement of the trade unions confirming that they were consulted and that they agree with the termination of the contracts.
Frequently, a social plan (e.g. termination packages) is negotiated. There is no legal obligation for the employer to negotiate the content of a social plan with the trade unions. Nevertheless, a social plan often forms an important part of the negotiations with the trade unions, as they will base their support on the content of that plan. If the employer and the trade unions conclude a social plan, a Court will usually award the employee a severance amount in accordance with that social plan, unless application would be clearly unfair to the employee.
Rights and Importance of Trade Unions
Trade unions play important roles in case of collective dismissals, strikes and collective bargaining. Trade unions can also represent the individual interests of employees. Contrary to the Works Council (see below) there is no statutory number of members and everyone can become a member of a trade union.
Types of Representation
Trade unions are involved in collective dismissals, strikes and collective bargaining. Members of a trade union can also be represented in case of an individual dismissal.
- Number of representatives
There is no minimum or maximum number of representatives to form a trade union. Nevertheless, trade unions with a large number of representatives obviously have more influence.
- Appointment of representatives
Dutch law does not provide rules for the appointment of representatives of trade unions.
- Tasks and Obligations of Representatives
Dutch law does not provide rules about the tasks and obligations of representatives of trade unions.
- Employees’ Representation in Management
All employees (including managers) can become members of a trade union. Please note that an employer cannot terminate an employment contract of an employee because of his/her membership of a trade union. However, the employee is obliged to act in accordance with rules regarding the concept of “good employeeship”. An employee may not interrupt the business of an employer unreasonably, because of trade union work and such activities may only be performed during office hours if the employer provided consent beforehand.
Other Types of Employee Representative Bodies
Types of representation
According to the Dutch Works Council Act (in Dutch: Wet op de ondernemingsraden), an entrepreneur maintaining an enterprise in which, as a rule, at least 50 employees work, is obliged to establish a works council for the purposes of consultation with and representation of the employees employed by the enterprise.
The obligation to establish a works council may also result from a provision to this effect in a Collective Labour Agreement.
Number of representatives
The number of works council members is calculated as follows:
||2 more members, up to a maximum of 25 members,
for every 1.000 employees beyond the initial 2.000
If the employer gives permission, the works council can determine another number of members in its regulations.
Nomination of representatives
Employees can stand for election for the works council if they have been in service for at least one year. The election of the members of the works council is executed by a secret written vote on the basis of one or more lists of candidates. An employee is allowed to vote if he/she has been in service for at least six months.
Tasks and obligations of representatives
Information Right of the Works Council
The works council is entitled to receive all information, which it reasonably needs to properly perform its duties. The information shall be provided in writing, if requested. At least twice per year the employer shall inform the works council orally or in writing of the expectations regarding the activities and the results of the enterprise in the coming period, in particular with respect to matters in which the prior advice of the works council is required and to all investments in the Netherlands and abroad. Furthermore, the employer must provide the works council with specific information concerning any proposed decision on which the prior advice of the works council is required.
Right of Advice
Pursuant to Article 25 paragraph 1 of the Dutch Works Council Act the employer is obliged to request the advice of its works council in advance, in case of an intended decision regarding, among others:
- transfer of control of the company or a part thereof;
- establishment, take-over or relinquishment of control of another company, or entering into or making a major modification to or severing a permanent co-operative venture with another company, including entering into or effecting major changes of or severing of an important financial participation on the account of or for the benefit of another company;
- termination of the operations of a company or a major part thereof;
- major reductions or expansions or other changes to the company;
- major changes in the organisational structure of the company or in the allocation of powers within the company.
The advice must be requested within a reasonable time frame to allow the works council to have a say in the decision that is to be taken. The request for advice must include a summary of the reasons for the decision, the expected consequences (if any) and the measures proposed in response. The works council cannot issue its advice until the matter has been discussed in at least one consultation meeting. If, after the advice has been issued, the employer decides to go through with the planned decision, it must inform the works council accordingly in writing.
Should the employer’s decision deviate from the advice given by the works council, the employer must give a full account of the reasons why (in writing). The execution of the decision must be postponed for one month. During that month, the works council may lodge an appeal with the Companies Chamber of the Court of Appeal in Amsterdam (in Dutch: Ondernemingskamer van het Gerechtshof Amsterdam). An appeal may also be lodged if the employer fails to request advice. An appeal may only be lodged if, in weighing the interests involved, the employer in all reasonableness could not have arrived at the decision. The Companies Chamber can reject the decision only if the decision was “manifestly unreasonable.”
Except for the one-month waiting period, there are no statutory terms for the works council consultation. The Dutch Works Council Act only requires that the advice should be requested within a reasonable time frame to allow the works council to have a say in the decision that is to be taken. In general, approximately two months pass between submitting the request for advice to the works council and receiving the works council’s advice. The decision to reorganise can only be taken and implemented if the works council renders a positive recommendation or, if it issues a negative recommendation or no advice, after a one-month waiting period.
Right of Consent
Pursuant to Article 27 paragraph 1 of the Dutch Works Council Act the employer is obliged to request the prior consent of its works council for decisions regarding the establishment, modification or withdrawal of regulations concerning (among others) pension insurance, profit sharing, working hours, job classification and remuneration. If the works council refuses to give its consent, the employer can ask the Cantonal Court to give consent. The Cantonal Court will only give consent if the decision of the works council is unreasonable or if the intended decision of the entrepreneur is necessary because of compelling business interests.
The request for consent must be in writing and must include a summary of the reasons for the intended decision and the expected consequences for the employees (if any). The works council cannot give consent until the matter has been discussed in at least one consultation meeting. After the consultation meeting, the works council must inform the employer as soon as possible about the decision, written and reasoned. After the decision of the works council, the employer has to inform the works council as soon as possible about the decision that has been taken by the employer and on which date the decision will be implemented.
The consent is not required if the matter is included in a Collective Labour Agreement or a regulation of employment conditions established by a public body.
If any decision as mentioned in Article 27 paragraph 1 of the Dutch Works Council Act is taken without the consent of the works council or the Cantonal Court, that decision is void if the works council invokes the nullity of the decision within one month after being informed about the decision, or in absence of being informed, within one month after the decision was implemented and the work council was aware of that.
The works council can ask the Cantonal Court to oblige the employer not to execute the decision. The employer can ask the Cantonal Court to declare that the works council wrongly invoked nullity of the decision.
Right of Advice re: Appointment and Dismissal of Director
The employer must give the works council the opportunity to give advice about every intended decision to appoint or dismiss the director of the employer. The advice must be requested within a reasonable time frame to allow the works council to have a say in the decision that is to be taken. The employer informs the works council about the reasons of the intended decision. In case of the appointment of the director the employer has to provide information so that the works council can give an opinion. The works council can request for the matter to be discussed in at least one consultation meeting. If, after the advice has been issued, the employer decides to go through with its intended decision, it must inform the works council accordingly in writing. Should the employer’s decision deviate from the advice given by the works council, the employer must give a full account of the reasons why (in writing). There is no right of appeal.
Employees’ Representation in Management
In principle, every employee (including managers) can stand for election for the works council if the employee has been in service for at least 12 months. Only the executive director is excluded from election.