European Restructuring Monitor (ERM)
Eurofound's ERM database on restructuring-related legal regulations provides information on regulations in the Member States of the European Union and Norway which are explicitly or implicitly linked to anticipating and managing change.
Articles 25, 26, 31, 35b, and 35c of Dutch Works council act; Articles 3 and 4 of Collective Redundancy Notification Act
Obligation to consult the works council and receive advice
The employer has the obligation to inform a works council (Ondernemingsraad) and give it the opportunity to express its advice regarding the employer's intention to restructure, at such a moment in time that the works council’s advice can still have a substantial effect on the employer's decision. The Works council act distinguishes the following types of restructuring:
The employer's request must include information on proposals for reorganisation and redundancies, reasons for these, possible alternatives, consequences for employees and measures taken to limit the consequences. The works council is entitled to at least one consultation meeting with the employer. In principle, a works council should be installed if there are 50 or more employees.
Timeliness, completeness and correctness of the information provided to the works council is particularly relevant in cases of collective dismissals: at least 20 dismissals in one or more plants of the same company, within one and the same region of the public employment service (6 regions in the Netherlands), and within a period of 3 months.
If the advice is not followed by the employer, the works council can challenge the restructuring decision (and possible implementation measures already undertaken). Jurisprudence over the last 35 years shows that employers that have not taken their information and consultation duties seriously run the risk that the court rules the restructuring operation invalid. However, given sufficient consideration to the advice, the managerial prerogative prevails.
The works council in smaller companies
In smaller companies employing between 10-50 employees, the Works council act obliges the employer to consult the mini works council (if it exists) or the staff meeting on any decision that could lead to job loss or a significant change in the employment, labour conditions or working conditions of at least one-fourth of the persons employed in the company. Contrary to the case of works councils, decisions cannot be challenged in court.
If restructuring results in 20 or more dismissals, the Collective Redundancy Notification Act applies. This act stimulates the information and consultation (both with the works council and the unions) procedure because the necessary dismissal permit will not be granted by the public authorities if the information and consultation provisions are violated.
The main act for informing and consulting employees is the Works councils act. Compared to most other EU countries, works council rights are strong in the Netherlands.
The employer's obligation to notify the trade union and works council if a collective dismissal is about to take place and in other cases of restructuring is commonly accepted by the social partners. When the measure was introduced in 2012, however, some concerns were expressed by employer organisations about possible legal uncertainty for employers in cases of collective dismissal. The terms and conditions that pertain to whether a permit for collective dismissal is granted by the public employment service are usually a more contested topic than the actual obligation to notify.
The Collective Redundancy Notification Act can partly be seen as a leverage instrument to stimulate information and consultation of works councils in the case of collective dismissals: the public authorities will not issue the necessary permits if information and consultation with the unions and/or the works council have been violated.
See also 'Staff information and consultation on business transfers' for conditions of a specific agreement between unions and employer organisations.
Eurofound (2015), Netherlands: Staff information and consultation on restructuring plans, Restructuring legislation database, Dublin, https://apps.eurofound.europa.eu/legislationdb/staff-information-and-consultation-on-restructuring-plans/netherlands
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