knowledge of the Works Council Act for the management board

More and more international organisations in the Netherlands have a non-Dutch management board. This can cause difficulties for the organisation, for the Works Council, but also for the management board itself. What are the obstacles and what are the solutions for an improved relationship with the Works Council?

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For an organisation to function correctly, it is vital that employers and employees work well together. They need to know what they can expect from each other. This is particularly reflected in the relationship between the management board, as a representative of the employer, and the Works Council, as a representative of the employees.

In the Netherlands, employee participation (i.e. the role of the Works Council, including its rights and obligations) is laid down in the Works Council Act (WOR) (Dutch). Management boards should have a basic knowledge of the WOR. This is particularly important for a foreign management board because they are not fully aware of the local culture and customs – and therefore, the laws.

Roughly outlined, foreign Directors face two ‘obstacles’:

1. Employee participation in the Netherlands differs from employee participation in many other countries, which also means that the relationship between the Director and Works Council is different.
2. The Dutch texts in the WOR are not always easy to translate into English, which makes the essence of them sometimes difficult to grasp.

Below we discuss the two obstacles in more detail, and come up with solutions to overcome them.

employee participation in the Netherlands is different

How we deal with employee participation in organisations in the Netherlands greatly differs from the countries around us. The European Commission has laid down several guidelines on how management boards in European countries should inform their employees. The EC also dictates how and when they need to consult with their employees before they can make certain decisions.

As is the case with many European regulations, these agreements are extensive. All countries in Europe have their own rules, based on their own history, culture and customs.

employee participation different in every European country

In some European countries, trade unions are traditionally part of the cultural background. In those countries, the unions often also play a significant role in employee participation. This is particularly evident in countries in southern Europe. In northern Europe, the role of the trade unions is less significant, and employee participation is more the responsibility of an individual.

As a result, national employee participation legislation in Europe is very versified. In Belgium, for example, the Works Council consists mainly of trade union members, and (in practice) there is no confidentiality between the Director and the Works Council. People in Belgium are therefore very familiar with the so-called conflict model. In the Netherlands, the trade unions have a lot less influence. We often use concepts such as mutual consultation between the Works Council and the Director. The consensus model is very popular with the Dutch: we tend to talk until everyone is more or less happy with the result.

employee participation in the Netherlands: the WOR

In the Netherlands, employee participation is based on the Works Councils Act, a law that originates in the Dutch post-war reconstruction period.

Through the many adjustments since the implementation of the WOR in 1950, more and more emphasis has been placed on joint consultation and decision-making. There is still a clear distinction between ‘control’ (things that the management board decides) and ’employee participation’ (things about which the employees must be informed and consulted). The law gives employees a lot of influence on decision-making.

For example, the Dutch Works Council has a lot, and sometimes even imperative, of influence on decisions taken by the management board. Even when the foreign head office makes decisions, the Dutch Works Council has a say. The Works Council can even stop certain matters in the Netherlands.

the legal basis

For example, a Works Council has the right to advise on topics stated in the WOR, and the organisation is legally required to ask the Works Council for advice. The same applies to the right of consent; on certain topics, the organisation is legally required to request consent and the Works Council has the right to provide or deny such consent.

In addition, this law states how these rights and obligations between the Director and the Works Council must be complied with. The WOR sets out the legal frameworks within which a Works Council may operate, making it the basis for the tasks of a Works Council.

But since this is a law (and, to make matters worse, a law dating back to 1950, with a lot of case law), there are many ways of interpreting it. It is therefore recommended that both the Director and the Works Council have a good basic understanding of the starting point of the Works Council: the WOR.

legal texts are difficult to translate

In the Netherlands, many issues between the Works Council and the Director are regulated without directly and actively applying laws and regulations. These laws and regulations are the basis and starting point for the relationship and understanding between the Works Council and the Director. Therefore, basic knowledge of the WOR is essential for Directors, enabling them to have and maintain a useful and constructively collaborating relationship with the Works Council.

This can be difficult for foreign Directors who do not (sufficiently) understand Dutch. Many nuances get lost in translation, in particular in the translation of the WOR texts. English is a language that is much ‘softer’ in its expressions.

example: consent from the Works Council

How the intent or intention of Dutch law articles gets lost in translation can be observed in everything related to the Director’s ‘request for consent’ and the ‘consent’ provided by the Works Council.

All the case law shows that the consent of the Works Council is considerably binding: The Director must (legally) come up with very good arguments if they are to disregard a well-founded consent of the Works Council.

However, the English version of the WOR created by the Social Economic Council translates ‘consent’ (instemming) as ‘endorsement’. The latter term is not very strict. The term ‘consent’ would be a better translation. But even so, that term is not as compelling and conditional in English as it is in the Dutch version of the WOR.

interaction: company culture, the law and the opinions of employees

Beyond the WOR, the activities of the Works Council depend on factors such as the organisational culture, the opinions of the employees and the people who have a seat on the Works Council. And last but not least, it depends on (the quality of) the relationship between the Works Council and the Director.

the law for the Works Council and the Director

The topics in the WOR are the same for the management board and the Works Council. They both look at those topics with the same intention: to determine what is good for the organisation.

However, the Director and the Works Council will both approach and use the WOR from a different point of view. After all, there are always different ways to achieve the same ultimate goal.

Because of the different perspectives on what they want to achieve and their different goals, it is better if the Works Council and the Director acquire their knowledge about the WOR separately. Both the Works Council and the Director should hire their own external expert to help the Works Council/Director to gain that knowledge quickly and efficiently.

WOR basic knowledge for the Works Council

The best and most efficient way for the Works Council to explore the basic principles of the WOR is during a Works Council off-site team day. During a meeting, the Works Council will explore how the WOR works (and what is especially important for the organisation); it will also discuss how the organisation has dealt with it in the past and what the Works Council wants to do differently.

basic WOR knowledge for the non-Dutch Director

The foreign Director or foreign management board members of the organisation can have the essence of Dutch employee participation explained to them in a short session. This will take into account not only the WOR, but also the cultural practices and customs that go with it in the Netherlands. This gives a clearer picture of the rules and why they exist. Having this knowledge of the legal basis, including the context and tips on how to deal with it, ensures that the essence of the WOR is also clear in its English translation.

practical information

A session for the non-Dutch Director takes one to four hours (invoiced on the basis of subsequent calculation), depending on the number of participants. If there are more than four participants, we suggest splitting the session up into several meetings.

Inge Telting is our recommended colleague and expert for such a session.

 

Note: Please note that we are a Dutch organisation and that all our information is originally composed in Dutch. For the benefit of our English-speaking customers we have translated some of our online information. We are still in the process of translating even more of our information. It could therefore be that you will come across Dutch pages on CT2.nl. Please contact us if you would like more information.