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Netherlands: Works Council Chronical 2023

Reflections on key rulings regarding the Dutch Works Council's Act and Employee Consultation Law

11 December 2023

In this newsletter, we highlight significant court rulings in 2023 that revolve around crucial aspects of the Dutch Works Council’s Act (WCA). Specifically, our focus is on the right of appeal (Article 26 WCA), the right to consent (Article 27 WCA), and general dispute resolution (Article 36 WCA).

Amsterdam Court of Appeal (Article 26 WCA)1

The court ruled that employers must ensure clear communication between the works council and themselves, especially concerning decisions impacting the company's structure or power distribution. The impact assessment should consider not only the direct but also the indirect effects on employees and the organization of the company. The Amsterdam Court of Appeal has determined that a proposed management decision pertaining to a singular individual or management role could potentially result in a substantial alteration to the company's structure or distribution of power. Consequently, a works council is entitled to provide advisory input regarding such decisions.

District Court of Oost-Brabant (Article 27 WCA)2

The subdistrict court concluded that shifting the regular individual salary adjustment from January to March did not pertain to altering the remuneration system. The court defines a pay system as the method by which rewards are calculated and assigned to specific roles, involving the ranking of functions. The company’s decision solely impacts the timing of individual salary increases, without altering the system of allocating rewards to positions or changing the ranking of these rewards. Consent from the works council is only required if a remuneration system or personnel evaluation scheme is introduced, changed or withdrawn as outlined in Article 27(1)(c) WCA).

District Court of Midden-Nederland (Article 36 WCA)3

The establishment of a guideline at the Group Works Council (GOR) level does not obstruct an ordinary works council from initiating legal proceedings concerning compliance with the WCA. This is particularly relevant when the case revolves around the employer's interpretation and application of the guideline within the purview of a specific works council's competence. This ruling established that the works council has the authority to challenge the employer's misinterpretation of the provisions and guidelines of the WCA. Employers should maintain transparent communication and balance interests effectively to foster a collaborative relationship.

Amsterdam Court of Appeal (Articles 27 & 36 WCA)4

The Court ruled that it was up to the employer to amend the proposed decision in such a way that the works council could give its approval or consent, or to apply to the subdistrict court for a substitute approval instead of adopting the void decision. The court emphasized the importance of obtaining the genuine consent of the works council, citing a case where the lack of consent of the works council led to the rejection of a decision taken by the company.

District Court Midden-Nederland (Article 27 WCA)5

In principle, a change in the roster during strike days is not a decision requiring consent under Article 27 of the WCA. The legislative history shows that it must be the introduction of a permanent arrangement intended to apply in the company for a longer period. This is not the case here, as it concerns only a limited number of strike days. However, Article 19(2) of the collective agreement invoked by the works council gives a more far-reaching right of consent to the works council than the right of consent under the WCA. According to this collective agreement provision, consent must be obtained for any different duty roster, even in the case of a temporary deviation. Therefore, the requested declaration that the decision was subject to the works council’s obligation to consent under the collective agreement, as well as the declaration that the works council timely invoked the nullity of the decision.

Conclusion:

Employers should prioritize transparent communication, consider the impact of decisions on employees and organizational structure, and seek genuine consent from the works council to avoid legal challenges. For further legal advice or inquiries about these developments, please feel free to contact us.

Note: This summary highlights the key rulings and their impact on the employer-works council relationship, emphasizing the importance of communication, impact assessment, and genuine consent to avoid legal conflict. For specific legal advice or deeper insight, please reach out to us directly.

Authored by: Maria Benbrahim