When does the right to be consulted apply to the works council?

The works council has to be consulted with regard to certain decisions. Because of this, the works council can actively review or try to influence the policy of the director, and represent the interests of the employees. The right to be consulted applies to decisions on:

  • Transfer of (part of) the undertaking
  • Takeover of another company, disposing of control thereof or lasting cooperation with another company
  • Shrinking, expansion or termination of (a significant part of) the activities
  • Significant change in the organisation of the enterprise or the division of authority within the enterprise
  • Change in location
  • Recruitment and hiring of groups of employees
  • Making significant investments for the enterprise
  • Collection and provision of a significant loan
  • Introduction or modification of a significant technological feature or measure regarding the environment
  • Establishment of regulations regarding the acceptance of the risk for continued payment of wages of employees that fall under the Work and Income (Capacity for Work) Act
  • Appointment or dismissal of a director

The advice has to be asked in time and the entrepreneur must give sufficient information so that the advice can actually have an impact on the decision that is to be taken. The works council will then be granted a reasonable period of time by the director to provide the advice. The works council has to convene at least once before advice can be given.

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Related questions

  • Can the works council be provided with additional powers?

    Yes, it can. In principle, the powers of the works council are described in the Works Councils Act (Wet op de Ondernemingsraden; WOR). However, it is possible to provide the works council with additional powers. These additional powers have to be laid down in a collective agreement or in regulations of a public body. The director and the works council can together agree upon additional powers in a written agreement. It is not allowed to restrict the statutory powers of the works council.

  • Does the works council have to bear the costs for involving a lawyer and conducting legal proceedings?

    Lawyers’ fees and the costs incurred for conducting legal proceedings by the Works Council versus the director may be charged to the director. However, the director has to be informed of the costs in advance. He or she can object to the level of costs. So make sure you have a good understanding about what to expect. In addition, make sure whether the Works Council is bound to an annual budget for engaging experts and/or conducting legal proceedings.

  • When is the works council entitled to information, and to what information is it entitled?

    First of all, the works council has a passive right to information. That means, the entrepreneur has to provide certain information upon his own initiative. For instance, the director has to provide the works council with an annual report.

    Besides, the director has to provide the works council with information when submitting a request for advice or consent. This includes in any event:

    • The grounds for the decision
    • The expected effects of the decision on the personnel
    • The measures the director intends to take regarding these effects.

    The works council is also allowed to request information from the director which is reasonably necessary to perform its duties. This is referred to as active right to information. The main rule here is that the works council, and not the director, determines which information is necessary. The director cannot hide behind the argument that the information is confidential because for this reason the director can impose an obligation of secrecy on the works council.

    Does the director provide insufficient information and is he not prepared to provide more information? For this reason, the works council can give a negative advice. This ensures the remedy of appeal to the Enterprise Division if the director derogates in his decision from the advice given by the works council.

  • When can the works council appeal to the Enterprise Division?

    The works council can appeal a decision of the director, if:

    • The advice of the works council was not followed up (completely) by the director
    • The director did not consult the works council and the works council could not give advice (for instance, if the works council was not given sufficient information)
    • After the advice of the works council facts and circumstances emerged that might have led to a different advice of the works council.

    In order to a lodge an appeal a lawyer is required. If the Enterprise Division considers the appeal justified, the Enterprise Division can take the following measures:

    • Order the director to withdraw the decision in whole or in part
    • Eliminate certain effects of the decision
    • Prohibit the director from performing actions to implement or have implemented (part of) the decision.
  • What can the works council do if the director has not asked for consent?

    When the director takes a decision without the consent of the works council, the works council can annul, in writing, the decision. This means, the decision is void. The works council has to do so within a period of one month. This period commences when the director notifies the works council that a decision has been taken. What if the director hasn’t notified the works council thereof? In that case, the term shall commence when the works council realizes that the director has implemented the decision.

    Then, the works council can commence legal proceedings before the subdistrict court to prohibit the director from (further) implementing the decision.

  • What can the works council do if the director does not follow up on the advice?

    When the director takes a decision that is not (completely) in line with the advice from the works council, the director has to notify the works council as quickly as possible in writing. In addition, the director has to explain why the advice was derogated from. The director should comment on the specific objections raised in the advice of the works council. Has the director derogated from the advice for reasons unknown to the works council? Then the works council will have to be consulted again on the implementation of the decision. Meanwhile, the director has to wait for a month before implementing the decision.

    What if the director does not give an explanation? Or is the decision already being implemented? In that case, the works council can appeal to the Enterprise Division of the Amsterdam Court of Appeal. For this, representation by a lawyer is required. The Enterprise Division of the Amsterdam Court of Appeal evaluates whether the decision is ‘manifestly unreasonable’. If the Enterprise Division of the Amsterdam Court of Appeal considers that this applies, it can prohibit the director from implementing the decision. Also, the Enterprise Division can order the director to withdraw the decision in whole or in part and to eliminate the effects of the decision. Besides, the works council can request provisional relief upon submission of the petition. In that case, the Enterprise Division of the Amsterdam Court of Appeal will order one or more of the above measures for the duration of the proceedings. This allows the works council to intervene quickly.