When Is a Works Council Mandatory?
Under the Wet op de Ondernemingsraden (WOR), every company operating in the Netherlands with 50 or more employees must establish a works council (ondernemingsraad or OR). This threshold includes all employees regardless of their contract type — full-time, part-time, and fixed-term all count.
Companies with 10–50 employees must establish a personnel representation (personeelsvertegenwoordiging or PVT), which has fewer rights but still requires employer cooperation.
Works Council Rights & Powers
The Dutch works council has three categories of rights:
- Consent rights (instemmingsrecht): The works council must approve changes to working conditions policies, pension schemes, working hours, leave, remuneration systems, health & safety, and performance review systems. Without consent, the employer cannot implement the change.
- Advisory rights (adviesrecht): The employer must seek the works council's advice on major business decisions: restructuring, mergers, investments, relocations, and significant organizational changes.
- Information rights (informatierecht): The employer must regularly provide financial results, staffing data, and strategic plans.
Setting Up a Works Council
The process of establishing a works council involves several formal steps:
- Draft a works council regulations (reglement) defining election procedures, seat allocation, and meeting frequency
- Announce elections to all employees and invite candidacies
- Conduct elections by secret ballot
- Install the elected works council members (typically 3–13 members depending on company size)
- Establish a regular meeting cadence (minimum 6 times per year) with the managing director
Common Challenges for International Companies
International companies often struggle with the works council concept, especially those from countries without similar statutory employee representation. Key challenges include:
- Decision-making speed: Consent and advisory procedures add time to HR policy changes and restructurings
- Scope of influence: Works councils can block HR policy changes that affect the entire workforce
- Confidentiality: Works council members receive confidential business information and have a duty of confidentiality
- Training rights: Works council members are entitled to paid training days (minimum 5 per year)
