EXPLAINED: Works councils in the Netherlands

A works council in the Netherlands is probably the most important representative body of employee interests for a company. A works council (in Dutch: wet op de ondernemingsraden, OR) is made up of a few employees from a company that were elected by their peers. These employees collaborate with HR and management to ensure that employee interests across the company are being represented.

If you’re going to run a business in the Netherlands, it is in your best interest to promote a good relationship with your company’s works council. A healthy works council can help you maintain a happy workforce with a strong corporate ethos. In this article, we’re going to explain the key facts about a works council so you can use them to your (and your employees’) advantage.

What is a works council (Wet op de ondernemingsraden, OR)?

Works councils are bodies of elected employees meant to represent the interests of the employees who appointed them. Members of the works councils often serve 2 – 4 years terms and they are usually appointed from each division of the company.

An employee can be appointed to a works council after they’ve been employed for at least 12 months. In that same vein, anybody can vote for their representative after they have been employed for at least 6 months.

The works councils will also vote to appoint a Chairperson and Secretary (and in some cases, deputy chairperson) who are responsible for the daily management of the works council.

Members of the works council are at particular risk for unfair dismissal due to their role – which is why there are special protections in place for members of the works council.

Your works council is NOT the same as the collective labour agreement (CAO) or union – which represents the industry/sector of your business. They also do not handle individual employee issues, which is the responsibility of your HR team. Your works council is specifically interested in issues that impact the business itself, and entire groups of employees.

Does my company need a works council?

In the Netherlands, companies that employ at least 50 people need to establish a workers council. This is law, and refers to Dutch business entities specifically. Meaning, if your company operates under multiple entities of 50 people or more, you will need separate works councils to represent each entity.

If your business does not have enough employees to start a works council, there are other forms of staff representation (such as staff meetings, or personeelsvergadering in Dutch) that are worth considering. At fewer than 50 employees, staff representation is not legally required (but highly recommended!) unless a majority of your employees request it.

Responsibilities of works councils

To protect the interests of employees, the works council has a few rights which your HR and/or management team must uphold. Those rights are as follows:

• Right to be consulted by management and HR about any decision or measures that can significantly affect your employees.
• Right of consent in the event employee conditions need to be changed.
• Right of proposal. Works councils have the right to make propositions which must be considered by management.

It is then the works council’s responsibility to develop a plan of action to give the best information or make the best decision as they can. This can include anything from surveying employees, to hiring specialists, or coordinating inspections.

As a company, you are responsible for training all members of the Works councils so they can perform their duties effectively. You must also allow them enough time during their normal working hours to do work for the Works council (at least 60 hours per year).

Additionally, a works council should meet with management at least twice per year so they have the opportunity to make proposals on behalf of all employees.

When to consult your works council

In short, your works council should be consulted whenever your business needs to make a decision that will have significant impact on your staff. It is in your company’s best interests to inform your works councils of decisions or measures you’re planning to make, to give your Works council the opportunity to react with useful information. Here are a few examples of when you need to consult your works council:

• Layoffs or restructuring of organisation
• Changes to compensation and benefits structure
• Changes to employee wellbeing benefits (such as work from home support, equipment used at work, gym memberships, etc.)
• Changes to standard working hours
• Relocation
• Changes to the C-suite (adding or replacing a member)
• Implementing new IT systems

When you need approval from the works council

Most pertinent decisions need to be made with the worker’s council advice in mind, which is why you are required to consult with them about so many topics. However, you are required to seek approval for some things when it comes time to implement. This involves:

• Changing pension insurance (or any other savings schemes)
• Modifying working hours, rest periods and leave
• Pay and performance evaluation changes
• Policy on appointments, dismissals and promotion
• Rules on staff training
• Rules on staff appraisals
• Arrangements for helping employees with social problems
• Rules on work consultation meetings (normally between employees and line management)
• Complaint procedures
• Handling and protection of employees’ personal data
• Monitoring and surveillance of employees’ attendance, behavior or performance
• Procedures related to the protection of whistleblowers

Octagon helps non-Dutch businesses succeed in the Netherlands

A strong relationship with your company’s works council is one of the best business relationships you can maintain as a business leader in the Netherlands. Companies that collaborate well with their Works councils experience fewer issues due to non-compliance, and maintain a happier, more engaged, workforce. If your company needs support setting up a works council or other form of staff representation — or you just need specialized knowledge to add to your works council, get in touch with our team of expert, HR specialists.

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