Works council (OR)
Penrose specialises in Dutch legal matters, employee participation and OR. Our lawyers in employment law assist employers, employees and OR in matters such as the establishment of OR, dealing with the OR, advice to the works council and employee participation by the OR. Below we will discuss a number of important subjects and frequently asked questions concerning the OR and employee participation law.
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Personnel can have a say in the employer’s company in various ways. If companies have more than 50 employees, there is a legal obligation in the Netherlands to set up a works council (OR). The rights of the works council are also laid down by law. Through the OR, employees can contribute to the proper performance of the organisation. In addition to the right to be informed, the works council has a say in matters and may advise on certain company decisions. Certain decisions within the company may even only be taken with the consent of the OR. The powers of the works council can be extended through a collective agreement or a written agreement (between employer and OR).
Companies with more than 50 employees are required by law to establish a works council (OR). If there are 10 to 50 employees, they can voluntarily set up an employees council or employee representation. If the majority of the employees so request, such a body must be se than 10 employees may voluntarily set up a staff meeting. Note that a personnel-representative body and a staff meeting have different powers than an OR.
Works council advisory law
If an employer takes decisions that may have major implications for employees, the management board is obliged to seek the advice of the works council (OR) before the board actually takes the intended decision. In this way, the OR can still influence the content of the decision. This is the case, for example, with reorganisations, mergers or major investments. If the OR advises contrary to the proposed decision, and the decision is subsequently taken by the management board without following the advice of the OR, the management must postpone (suspend) the implementation of the decision by one month. During that time, the OR may lodge an appeal against the decision with the Enterprise Chamber of the Amsterdam Court of Appeal. The Enterprise Division then assesses whether the board’s decision could reasonably have been taken.
Right of consent by the works council
Is a situation related to the establishment, amendment or withdrawal of personnel regulations, for example, concerning working hours, working conditions or absenteeism due to illness? In that case, under Dutch law the management board must submit the decision-making on these subjects to the OR. The OR has a right of consent with regard to these subjects. In other words: if the OR cannot agree to the intended decision of the board, the board cannot take the intended decision. In that case, the board of directors has the right to challenge the refusal of the OR (via the company committee) before the subdistrict court.
Right of initiative by the works council
In addition to the right of advice and the right of consent, the works council has a right of initiative. This means that the works council (OR) may make proposals to the employer on all social, organisational, financial and economic matters concerning the company. If the OR takes the initiative to make such a proposal, the employer is obliged to discuss this initiative with the OR before possibly rejecting a proposal.
Works council information law
The OR must have the required information to perform its task. This right to be informed relates to the annual accounts of the company for example, and the remuneration structure and terms of employment applied by the company. The OR also has the right to speak at the company’s shareholders’ meetings.
Dutch Employment lawyer
The Dutch labour lawyers of Penrose specialise in employee participation and works councils matters in the Netherlands. They help you consider and deal with any of your employment issues and are happy to answer your questions. The contact details of our experts can be found here.