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Workplace Representation

Employee representation at the workplace is essentially through works councils elected by all workers. They must be set up in all workplaces with at least 50 workers and two-thirds of workplaces of this size have them. There are other arrangements for smaller workplaces.

The main channel for employee representation in the Netherlands is through the works council, a body elected by and representing all employees. Some collective agreements, including the major metal working agreement, give trade unions limited rights at work, largely relating to the unions’ own activities, but this is not universal.

 

Every undertaking in the Netherlands with at least 50 workers is obliged to set up a works council (OR) with a range of information and consultation rights. In addition, undertakings with between 10 and 50 employees are required to set up a personnel delegation (PVT), a body with some of the powers of the works council, if a majority of employees request it, although this is relatively rare (see below).

 

The extent of the works council's powers varies according to the issue involved. In broad terms the works council must be informed and consulted about economic issues but on social issues it must approve any changes (see below).

 

Works councils were first introduced by law in 1950 and their extent and powers have gradually been extended since then. The bulk of the current legal framework for works councils is set out in the Works Councils Act of 1979, which was extended to smaller companies in 1981, and has been revised in relatively minor ways on a fairly regular basis since that date. For example, changes, which came into effect in January 2019, imposed a new obligation on larger employers to discuss directors’ pay with the works council, and strengthened works councils’ rights in relation to pension agreements.

 

Although the legislation states that any “enterprise in which normally at least 50 persons are working shall … establish a works councils”, they do not exist in all undertakings of this size, although they are normally present. A study undertaken on behalf of the Ministry for Social Affairs and Employment shows that, in 2017, two-thirds (67%) of workplaces with more than 50 employees had a works council.[1] Works councils are more common in larger than smaller workplaces. Almost all (95%) of workplaces with more than 200 employees had a works council but only 54% of those with 50 to 74 employees, 66% for those with 75 to 99 employees and 79% for those with between 100 to 199 employees. There are also difference between industries, with only half (50%) of establishments with at least 50 employees in retail, wholesale, repair, hotels and catering having a works council, compared with 99% of establishments of a similar size in government and related services.

 

In workplaces with between 10 and 49 employees – in other words, below the obligatory works council threshold, 12% had a works council and 19% had a personnel delegation. Where personnel delegations have been established this had normally been the result of a voluntary decision of by the employer (71% of cases). The study found that only 7% had been set up solely because of a request of the majority of employees, while another 21% had been the result of a common wish of both the employer and a majority of employees to have a personnel delegation.

 

Comparisons with elsewhere in Europe, taken from Eurofound’s 2013 European Company Survey indicate that employee representation at workplace level is found more frequently in the Netherlands than in most of the rest of the EU28. In 2013, more than half (55%) establishments in the Netherlands with at least 10 employees had some form of employee representation, either through a works council or a personnel delegation, well above the EU28 average of 32%.[2]

 

These Eurofound figures date from 2013, and the national study for the Ministry for Social Affairs and Employment indicates that the proportion of establishments with 50 or more employees which have a works council has fallen since the last comparable study six years earlier. In 2011, 71% of establishments of this size had a works council compared with 67% in 2017.

 

Examining why, despite a legal obligation, so many establishments with 50 or more employees did not have a works council, the 2017 study found that the reason most frequently mentioned by the employer was that the “staff don’t need one”. Two-thirds of employers (66%) without a works council stated this was the reason why they did not have one, followed by 53% who said that there were “sufficient other forms of consultation” with employees. (More than one answer was possible.) However, the view of employees in establishments without a works council was different. Less than a quarter (23%) said it was because the employees did not need it while more than four in ten (43%) said it was because the employer or director did not need it.

 

Works councils are not trade union bodies, although the unions have nomination rights (see below) and many works council members are also union members. There is also a connection between the existence of a works council and the level of union density. Where union density was below 10%, only two-thirds (66%) of establishments with 50 or more employees had a works council. But where union density was above 50% almost all (96%) had one. It is, however, very common to find that some of the works council members are not in a union and in some cases trade unionists are in a minority, or even not present at all. The proportion of trade unionists among works council members was not examined in the 2017 study for the Ministry for Social Affairs and Employment, but a joint German-Dutch study looking at works councils in the two countries found that 39% of works council members in the Netherlands were union members compared with 68% in Germany.[3]  

 

Trade unionists have a basic right to organise at work but, unlike the situation in other European states, such as France, Spain or Italy, in the Netherlands they have no statutory right to specific facilities. However, in some areas, collective agreements give unions some additional rights at the workplace.

 

Numbers and structure

 

A works council should be set up once there are 50 people working in the enterprise “as a rule”. This number of those working includes employees but also temporary agency workers, if they worked there for at least 24 months. It can also include other individuals who regularly perform work for the business, but who do not have an employment contract, but only if the employer and the works council jointly decide that this should be the case. The “as a rule” reference potentially means that some temporary workers could be excluded but part-timers are counted in exactly the same way as those working full time.

 

An employer with two enterprises, which separately have fewer than 50 workers but together have more than 50, is required to set up a joint works council “if this is in the interest of the proper implementation of the Act”. It is also possible to set up a separate works council for part of an enterprise with at least 50 workers, again “if this is in the interest of the proper implementation of the Act”.

 

The numbers of members of the works council varies with the number employed, as set out below.

 

Number employed

Number of members

50 to 100

5

100 to 200

7

200 to 400

9

400 to 600

11

600 to 1,000

13

1,000 to 2,000

15

 

Thereafter there are two additional members for each 1,000 employees up to a maximum of 25. In practice, the 2017 study for the Ministry for Social Affairs and Employment found that not all works councils had this number of members, with the difference largest in the 100 to 200 bracket, where 45% of works councils had fewer members than the number set out in the legislation.

 

The works council consists entirely of employees (up to the 1970s the employer took the chair), who are elected by the entire workforce. The works council elects its own chair and one or more deputies. It draws up its own rules of procedure, but management must have an opportunity to comment on them and they must be approved by the joint union/management commission set up in each industrial sector.

 

In terms of frequency, the only legal requirements are that the works council must meet the employer at least twice a year to discuss the overall state of the business in the presence of one or more members of the supervisory board, and that the works council must meet the employer within at least two weeks of either side expressing a wish to do so. In practice, most works councils meet once a month, and the 2017 study for the Ministry for Social Affairs and Employment shows half of all works councils (52%) also have a joint meeting with the employer once every two months. (19% have joint meetings more frequently than this and 30% less frequently.)

 

The works council can also set up standing-committees to deal with specific issues, such as health and safety, subcommittees covering specific parts of the undertaking, and temporary or ad hoc committees, set up to deal with specific issues. These committees can include non-works council members, although at least one member must also be on the works council. The 2017 study indicates that almost half of works council (47%) have no standing committees, with a third (34%) having a committee managing day-to-day issues and setting the agenda of the works council and a quarter (26%) having a committee dealing with health and safety and the environment.

 

Companies with between 10 and 50 employees can voluntarily choose to set up a works council if they wish, and they must set up a personnel delegation – a kind of mini-works council with more limited rights – if this is the wish of a majority of employees. The personnel delegation must have at least three members.

 

The rules governing the operation of workplace trade union groups, where these exist, are set out in the appropriate collective agreements.

 

Tasks and rights

 

The purpose of the works council is not simply to represent the employees. The legislation makes clear that "consultations with and representation of" the employees are "in the interests of the sound functioning of the enterprise in all its objectives". It is this that explains the frequency of joint meetings between the works council and management.

 

The law provides the works council with three main types of right: information rights; consultation rights and approval rights. In addition, the works council has powers to make proposals to which the employer must respond – the right of initiative. Works councils are not normally involved in collective bargaining on pay, although there are some exceptions and they also have a role in agreeing how some aspects of industry agreements, particularly those relating to working time are implemented at enterprise level (see section on collective bargaining).

 

The information rights mean that management is obliged automatically to give the works council information on a range of financial/economic issues. At the beginning of each terms of office for the new works council (every three years – see below) management must provide information on the legal form, the names and addresses of the key decision makers (such as partners of directors), the structure and organisation of the business, its links (including international links) with other businesses and the power relations between them  and the make-up of the management.

 

On an ongoing basis, management must provide information on the activities and financial results of the business and the prospects for the futures, including investment plans (both at least twice a year). Management must also give the works council copies of the annual report and accounts, including consolidated accounts of the group, where this is relevant, and details of the specific results for the part of the business the works council covers, if the annual report relates to a larger entity. It must also provide the works council with information on its long-term corporate plan if it prepares such a document.  

 

At least once a year management must give the works council details of the numbers employed, broken down by groups, and the business’s social policies towards them, covering issues like pay, training and working time. The works council should also be given forecasts on staff numbers and social policy for the coming year, and at least once a year management must provide information on the number of temporary agency workers and the plans for their use in the coming year. The works council must also be told if the business plans to bring in an outside expert in relation to issues such as pay, training or working time, and if it makes specific changes to pension arrangements. In addition, as a result of changes introduced in January 2019, the employer must provide the works council with information on the pay and conditions of different groups of employees within the organisation, including senior management. This new provision, which only applies to organisations with a 100 or more employees, is intended to improve transparency on the issue.

 

As well as these specific information rights, the works council has the right to ask for all the information it reasonably needs to carry out its tasks.

 

The works council’s consultation rights are wide ranging, and an important element of these rights is set out in article 24 of the Works Councils Act. This states that “the general operation of the enterprise shall be discussed at least twice a year in consultation meetings” and that at these meetings the works council will be informed of the employer’s plans in relation to a range of key issues (see lists below) and  that these meetings “agreement will also be reached about when and how the works council will be involved in the decision-making process”.

 

These “Article 24 meetings” are seen as particularly important as a member of the supervisory board (or a representative), which in larger companies normally agrees the overall strategy for the business (see section on board-level representation) should be present along with management and the works council.

 

As well as this requirement to have a general consultative meeting at least twice a year, management must consult the works council if it plans to:

  • sell all or part of the business;
  • set up, take over or sell other organisations (does not apply to international transactions which are unlikely to have a significant effect on employees in the Netherlands);
  • end all or a large part of the organisation’s activity;  
  • significantly reduce or expand or change in some other way the enterprise’s activities;
  • make major changes to the power structures within the organisation;
  • relocate the organisation;
  • undertake large scale recruitment or the recruitment of temporary workers;
  • make major investments;
  • seek large loans;
  • extend more credit than is normal;
  • make important technological changes;
  • make changes which will affect the environment;
  • change arrangements providing insurance to cover sickness and death in service; and
  • commission external advice (also normally does not apply to international operations).

 

On all these issues the employer must seek the views of the works council and delay taking action for at least a month if the works council disagrees with the proposal. If the management disagrees with the works council’s views, it must set out its reasons in writing. During this period, the works council can appeal to the Companies Chamber of the Court of Appeal in Amsterdam, and if the court considers that the employer’s decision is unfair it can forbid the employer for acting or require that actions that have already been taken be reversed.

 

The views of the works council must also be sought when a director is being appointed but the works council cannot delay this decision.

 

The approvalrights, where the employer cannot act without the agreement of the works council, relate to company/workplace regulations on a range of topics including:

  • pension insurance, profit-sharing or savings schemes;
  • working hours, rest periods and leave;
  • pay and job grading systems;
  • working conditions, sick leave and return to work after sickness;
  • 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);
  • complaints procedures;
  • the handling and protection of employees’ personal data;
  • the monitoring or surveillance of employees’ attendance, behaviour or performance; and
  • procedures relating to the protection of whistleblowers.

 

Regulations on these issues cannot be introduced, changed or ended without the approval of the works council unless they are covered by a collective agreement. If the works council fails to give its approval the employer can appeal to joint union management commissions set up in each industry, and then to the district court.

 

The so-called right of initiative – allowing the works council to make proposals to which the employer must respond – is set out in much less detail in the legislation, which simply states that the employer must discuss proposals from the works council in a meeting and must not take an decision on these proposals before this discussion.

 

All the rights set out in the legislation can be extended by collective agreements. The works council also has powers to ensure that the provisions of collective agreements are being properly applied.

 

In practice there are differences in how each of these types of rights are used. There seem to be fewest difficulties with the provision of information, at least in medium and larger undertakings. The consultation rights are more problematical with companies sometimes claiming that the changes they propose are not sufficiently important to warrant consultation or asking for the works council to respond too quickly. As, in any case, the Court is likely to agree to the company's plans unless procedural mistakes have been made, or employees’ interests have not been sufficiently taken into account. The real importance of these rights is to enable the employer and works council to reach an agreement without a court case. The approval rights are also heavily used, particularly in dealing with working time arrangements, but sometimes a works council will fail to give its approval but then not take action when the company goes ahead with its plans anyway. It requires the works council to initiate legal action to nullify the company's plans.

 

The right to take the initiative and make proposals to which the company must respond is used relatively infrequently. On the other hand, the possibility of the works council agreeing the specific implementation at company level of the terms of an industry level collective agreement is widely used. The 2017 report on works councils for the Ministry for Social Affairs and Employment  found that in companies covered by collective agreements – the vast majority -  three-quarters (73%) had agreements which allowed for this possibility and 78% of employers made use of this option.

 

The key task of the trade union groups is to be active on behalf of the union in the workplace, including recruiting new members, to represent union members in problems with management and to report back to the union outside the plant on developments. Often this is backed up by the terms of the collective agreement. In some unions the trade union plant group is also the lowest level of democratic decision making in the union.

 

The trade union group will support the union's candidates for the works council election, who will mostly be members of the group. Once elected the trade union group will work closely with those of its members who are on the works council, feeding members' problems and union concerns into the works council's discussions.  In bigger companies each of the union confederations as well as those not affiliated to a union may have a faction meeting before the works council itself. However, overall, compared with many other countries, unions are not particularly prominent at company level – including in the works council.

 

The trade union group also has a role in collective bargaining, at least when it is conducted at company level. This is still primarily left to union full time officials, but they are often accompanied by representatives of the trade union groups who have an input into the claim and help decide whether or not it is acceptable to the members.

 

Election and term of office

 

Works council members are elected as part of a list of candidates, with the choice made according to the percentage of votes which each list receives. Lists can be proposed either by unions or by a single employee or group of employees. To make a valid nomination, a union must meet certain conditions:

  • it must have a constitution which states that part of its purpose is to protect its members as employees;
  • it must have been in existence for at least two years;
  • it must have members in the enterprise; and
  • it must have consulted them on the make-up of the list of candidates being proposed.

 

The only stipulation on employees or groups of employees making a nomination is that they must be eligible to vote in the election and they may not be a member of a union that has submitted a list of candidates.

 

The right to vote is limited to those who have been working in the enterprise for at least six months and candidates must have been working there for at least 12 months.

 

Works council members normally serve for three years, although the works council's own rules of procedure can reduce the term of office to two years or extend it to four years.

 

The trade union group consists of the union's members on the works council and other trade union activists, who are more likely to volunteer to do a particular job than be elected, although elections are possible.

 

Protection against dismissal

 

Works council members can only be dismissed if the worker himself or herself agrees in writing, or if it has been authorised by a magistrate. This authorisation will only be given if there are serious reasons for immediate dismissal or the company, or part of it, closes. Any connection between the dismissal and works council membership makes the dismissal unlawful. Members of the works council may also not be disadvantaged because of their membership and the works council can ask the court to require that the employer must comply with this provision.

 

Members of the trade union group have no specific protection against disciplinary measures, including dismissal, unless they are on the works council. However, like other trade unionists, they cannot legally be discriminated against because of their trade union activity and some collective agreements specifically spell this out.

 

Time off and other resources

 

The exact amount of paid time-off for works council duties is left to be agreed between the works council and the employer. But as a minimum, works council members are entitled to 60 hours’ time off a year, in addition to time off for meetings. In practice, in larger companies, some works council members have substantially more. The 2017 study on works councils for the Ministry for Social Affairs and Employment found that the issue of time off for works council duties was dealt with informally in just over half of all works councils (54%), with only 44% having formal arrangements. This is significantly different to the situation in 2011, when two-thirds had formal arrangements.

 

The employer is obliged to provide facilities necessary to enable the works council to function. These could include an office, photocopying, telephones etc.  In addition, the works council can call on outside experts to take part in meetings to give advice on a particular agenda point and/or to provide consultancy reports. These experts are paid for by the employer, provided the employer has been informed in advance. The works council can also ask the union for advice and to be present at meetings.

 

The exact rights of the trade union group depend on the collective agreement covering the workplace. Typically, they include a number of hours paid time-off, time-off to attend union conferences or union training, although this may be subject to an overall limit. In addition, the trade union group may be allowed to: use a company room to meet members or union officials; distribute information about the union; and accompany members in grievance cases.

 

Training rights

 

Works council members have a right to at least five days’ training a year, although again agreements can improve on this. Members of sub-committees of the works council also have a right to three days’ training a year and those who are both members of the works council and a sub-committee have a right to eight days’ training a year. Time spent training is paid as working time and all training costs are borne by the employer. The employer and the works council can also agree that the works council should have its own training budget, which it can spend as it wishes. 

 

In practice, the 2017 study for Ministry for Social Affairs and Employment found that the amount of training was generally less than that permitted by the legislation. Only 11% of works councils got the required five days of training every year, although 52% got some training each year, but not five days. Another 21% got occasional training as works council members and 9% got no training at all. On the other hand, almost six out of 10 works councils (58%) had their own training budget.

Representation at group level

 

Where several companies belong to a single parent company, a central works council (COR) must be set up covering all the companies “if this is in the interest of the proper implementation of the Act”. It is also possible to set up an group works council (GOR) for only some of the companies in the group, if this would make more sense. The choice between these options depends on the specific circumstances.

 

The central works council is made up of members of the individual works councils, or group works councils, if these exist, and the central works council determines in its own rules of procedure how many members will come from each works council and how they will be elected.

 

Central and group works councils only deal with issues that are common at central or group level, and for these issues the central and group works councils have the same rights as local works councils.

[1] Naleving van de Wet op de Ondernemingsraden: Stand van zaken begin 2017 – Eindrapport, by Ignas Wajon, Paul Vlug and Elsbeth Enneking, June 2017 https://www.rijksoverheid.nl/binaries/rijksoverheid/documenten/rapporten/2018/03/05/eindrapport-onderzoek-naleving-wet-op-de-ondernemingsraden/eindrapport-onderzoek-naleving-wet-op-de-ondernemingsraden.pdf (Accessed 06.05.2020)

[2] Eurofound (2015), Third European Company Survey – Overview report: Workplace practices – Patterns, performance and well-being, Figures for Table 44

[3] Works councils in Germany and the Netherlands compared by Annette van den Berg, Yolanda Grift, Saraï Sapulete, Wolfram Brehmer, Martin Behrens and Arjen van Witteloostuijn WSI, January 2019 https://www.boeckler.de/pdf/p_wsi_studies_17_2019.pdf (Accessed 06.05.2020)

L. Fulton (2021) National Industrial Relations, an update (2019-2021). Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.