When Management and Works Council Disagree
The relationship between management and the ondernemingsraad (OR/works council) is a cornerstone of Dutch corporate governance. But disagreements are inevitable — and Dutch law provides a sophisticated framework for resolving disputes that protects both the OR's participation rights and the company's ability to operate effectively.
Understanding this framework is essential because ignoring OR rights can invalidate business decisions, no matter how commercially sensible they are. Several high-profile Dutch cases have seen court orders reversing mergers, restructurings, and policy changes because the works council's rights were not properly respected.
OR Rights and When Disputes Arise
Disputes typically arise in three categories of OR rights:
- Advisory right (Adviesrecht — Art. 25 WOR): For significant decisions including restructuring, mergers/acquisitions, major investments, relocations, and changes in organizational structure. The OR advises; management decides
- Consent right (Instemmingsrecht — Art. 27 WOR): For policies on working hours, holiday schemes, health & safety, privacy monitoring, performance evaluation, and complaint procedures. Management cannot implement these without OR consent
- Information right (Art. 31 WOR): The OR has the right to receive financial information, strategic plans, and social policy data. Withholding information undermines the advisory and consent processes
Dispute Resolution Mechanisms
When agreement cannot be reached, Dutch law provides several escalation paths:
- Mediative discussions: Many disputes are resolved through extended dialogue. The SER (Sociaal-Economische Raad) provides mediation support specifically for OR disputes
- Bedrijfscommissie: Sector-specific dispute committees that mediate between OR and management. Often effective for procedural disputes
- Kantonrechter (Advisory right disputes): Under Art. 26 WOR, if the OR believes its advisory right was inadequately followed, it can challenge the decision in court. The court can order the employer to reverse the decision or halt implementation
- Kantonrechter (Consent right disputes): Under Art. 27 lid 5 WOR, if the OR withholds consent, the employer can request the court to substitute consent, but only if the OR's refusal is unreasonable or the employer has compelling grounds
- Ondernemingskamer (Enterprise Chamber): The Amsterdam Court of Appeal's specialized business chamber handles complex corporate governance disputes, including OR involvement in fundamental corporate changes
Best Practices for Preventing Disputes
Prevention is always preferable to litigation:
- Involve the OR early: Don't present decisions as fait accompli. Engage during the planning phase so advice genuinely influences outcomes
- Provide complete information: Partial or delayed information creates suspicion. Share what you can, when you can, and explain any confidentiality restrictions
- Respect timelines: OR processes take time. Build advisory and consent timelines into your project planning
- Training for both sides: Invest in OR training (which is the employer's legal obligation) and train management on working effectively with the OR
