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Over the past year, courts have once again ruled on several employee participation issues. In this blog, we discuss some of these 2024 rulings, along with practical tips.
SABIC, an international petrochemical company with locations in Limburg and Bergen op Zoom, hired an external consultant in 2022 to develop a “housing strategy.” This plan included a potential relocation of the European headquarters from Limburg to Amsterdam and the introduction of hybrid working.
Despite frequent consultations with the works councils of both locations and compensatory measures for employees, such as a € 95.000 relocation and travel allowance and termination pay under the old Dutch court formula for employees who chose to resign, the works councils issued a negative advice in July 2023. SABIC decided to proceed with the relocation of its headquarters. The works councils argued that the decision was unreasonable and filed an appeal with the Netherlands Enterprise Court at the Amsterdam Court of Appeal, citing, among other things, a failure to involve them early enough and adequately influence the decision-making process.
The Enterprise Court ruled that SABIC had indeed failed to involve the works councils when hiring an external advisor and failed to involve the works councils early enough during the early stages of the decision-making process regarding the housing strategy and headquarters relocation. However, SABIC was able to rectify this by subsequently involving the works councils extensively in the decision-making process. The OK found that SABIC had conducted substantive debates, seriously considered objections, and provided sound strategic and financial justifications for the move. Therefore, the works councils’ requests were denied.
Tip: Be cautious when hiring external advisors, and utilize the advisory rights outlined in article 25(1)(n) of the Works Councils Act (WOR).
Lesson: An initially careless advisory process, such as involving the works council too late, can be remedied by thoroughly engaging the council later, taking its objections seriously, and allowing its advice to meaningfully influence decision-making.
The works council of NLW Groep initiated proceedings with the Enterprise Court following a dispute about an August 2023 presentation titled “Developments and Vision NLW Sheltered Production.” The works council suspected that the presentation contained decisions requiring its advice under article 25 of the WOR and asked the management for clarification. The management argued that no advisory-obligatory decisions had been made and that the presentation merely involved operational adjustments. The works council then requested the Enterprise Court to declare that the decisions in the presentation were unreasonable and to reverse their implementation.
The Enterprise Court ruled that NLW Groep had not made any advisory-obligatory decisions. There was no evidence of changes in functions or transfers, and the presentation focused solely on improving collaboration and workflows. The works council failed to provide sufficient evidence to justify its claim that the presentation included decisions requiring advice. As such, the Enterprise Court declared the works council’s request inadmissible.
Tip: Clear communication is crucial, especially when the works council may have advisory or consent rights. In case of doubt, hold discussions, establish clear (process) agreements, and avoid unnecessary legal disputes.
Click here to read the full ruling.
At Spotify Netherlands B.V. (Spotify NL), 19 out of 172 permanent employees were dismissed as part of an international reorganization. The works council argued that this constituted a major change in Spotify NL’s activities and structure, requiring prior advice under article 25 of the WOR. However, Spotify NL had not sought this advice and only provided general information without clarifying the specific consequences for the company. Following a deadlock, the works council filed a petition with the Enterprise Court.
The Enterprise Court ruled that the reorganization decision was unreasonable and ordered Spotify NL to reverse the decision and its consequences. The Enterprise Court stated that the global reduction of 17% of Spotify NL’s workforce represented a significant reduction in business activities. Although the Collective Redundancy Notification Act (Wmco) did not apply here (as it covers 20 or more dismissals), the reorganization’s impact on Spotify NL was deemed significant.
Tip: In the context of reorganizations involving forced dismissals, the works council often has advisory rights. Even for international decisions, when the Wmco does not apply and the employees leave with a settlement agreement. Involve the works council early and request its advice. Reversing dismissals, particularly those already implemented, is undesirable.
Click here to read the full ruling.
AH e-Commerce and its works council were involved in a dispute over the decision to hire groups of temporary workers. The works council argued that AH e-Commerce should have accepted a condition in its advice requiring 25% of employees to be permanent staff. The works council sought a declaration from the Enterprise Court that the hiring decisions were unreasonable due to the rejection of this condition.
The Enterprise Court ruled that AH e-Commerce had adequately explained why it did not accept the condition. While the company aimed to increase the percentage of permanent employees to 25% overall, it emphasized that this target was not feasible at every individual location. AH e-Commerce has demonstrated, according to the OK, that the condition desired by the Works Council is not effective and that fluctuations in demand make offering permanent contracts with fixed hours economically unjustifiable. AH e-Commerce also highlighted other initiatives to sustainably increase the proportion of permanent staff.
The OK concluded that AH e-Commerce had sufficiently demonstrated its reasoning and appropriately balanced its economic interests. The works council’s request was therefore denied.
Lesson: While a works council can include conditions in its advice, these must be reasonable and effective. A well-substantiated rejection of such conditions is legally permissible.
Click here to read the full ruling.
In the case between Pluryn’s central works council and the board of directors, the employee participation structure was under scrutiny. This change was part of a broader restructuring plan aimed at improving collaboration within the company and clarifying responsibilities within the care departments.
The central works council took the matter to the Enterprise Court because the decision of the board of directors deviated from their advice to maintain the existing structure. The central works council argued that the decision was unreasonable as they had not been adequately involved and were not provided with all the necessary information.
However, the Enterprise Court ruled that the board of directors had reasonably arrived at its decision, sufficiently justifying why they deviated from the central works council’s advice. The Enterprise Court also dismissed the central works council’s criticism that alternatives had not been adequately explored, as the board of directors had evaluated them based on clear criteria. The Enterprise Court confirmed that, although the decision was significant, it was necessary for Pluryn’s future, and the rights of employee participation had not been violated.
Lesson: By submitting the change in the employee participation structure to the Enterprise Court under the right of advice, it can be assessed whether the decision was reasonable. The assessment of whether the proposed structure promotes proper application of the WOR can be submitted to the district court under article 36 WOR. For substantive disputes over the design of the employee participation structure, the works council would be better off directly initiating proceedings with the district court.
Click here to read the full ruling.
In 2023, Albert Heijn Online B.V. (formerly Albert Heijn e-Commerce) introduced a new phone system for the Planning & Support department, leading to a dispute with the works council. The works council argued that this change required consent under the WOR and declared the decision void. Meanwhile, Albert Heijn also adjusted the employee participation structure. As of May 1, 2024, the works council of Albert Heijn Online B.V. was dissolved and restructured into a business unit committee of the joint works council. Albert Heijn had assured the works council that ongoing matters could still be handled by the works council.
However, the court ruled that the works council no longer had legal standing to initiate legal proceedings after its dissolution, declaring the works council inadmissible. From that point on, the authority to continue the proceedings lay with the joint works council, which chose not to pursue the matter further. The works council’s argument that Albert Heijn had given permission to continue ongoing matters was rejected, as this contradicted the legal framework. Consequently, the court declared the OR inadmissible.
Tip: A promise from the director that the works council has legal standing is not sufficient to establish legal standing. In such cases, it is advisable for the dissolved works council to assess whether there is still support for a procedure under the new employee participation structure. Otherwise, the effort may be in vain.
Click here to read the full ruling.
A dispute between CLdN Ports Netherlands B.V. (CLdN) and the works council concerned CLdN’s decision in 2023 not to grant pay steps to employees covered by the CLdN Ports collective labor agreement. The works council argued that this decision required consent under article 27(1) WOR, as it constituted a change in the pay system. CLdN, however, claimed that it was a matter concerning individual employees or related to primary employment conditions. Additionally, CLdN asserted that it had the discretion as an employer to decide whether or not to grant pay steps.
The district court ruled in favor of the works council, concluding that the decision was general in nature and did not merely concern individual employees. The court also determined that the decision constituted a change in the pay system, not in primary employment conditions. Furthermore, the court found that CLdN had no discretion regarding the bonus payments, as they had been granted annually, with few exceptions.
Because CLdN had not sought the works council’s consent, the decision was declared void. However, the works council could not enforce the granting of pay steps; employees would need to pursue legal action individually.
Tip: The right of consent over bonus schemes is often a point of contention between the works council and the director. It is also a recurring issue in case law. Make clear agreements about the right of consent – for example, in a covenant – to ensure clarity about which changes require works council approval. Increasingly, delegation clauses are included in collective labor agreements or could be negotiated for future agreements.
Click here to read the full ruling.
At Rijkswaterstaat Verkeer en Watermanagement (RVWM), work is scheduled based on standard and monthly rosters. The standard roster is established for an entire year, and monthly rosters are created accordingly. A dispute arose between RVWM and the works council regarding the standard and monthly rosters for 2024.
The works council argued that RVWM had not submitted a standard roster for consent for the Vlissingen location and had not obtained consent for the standard roster at the Vaartuigen Zuid-Oost location. Additionally, the works council contended that the monthly rosters were inherently linked to the standard rosters and therefore also required endorsement. The works council asked the court to declare it was justified that the works council had invoked the nullity of the monthly rosters.
However, the court ruled that monthly rosters are merely an implementation measure and therefore do not require endorsement under article 27(1) WOR. The works council’s requests were denied. Although the court acknowledged that RVWM had been late in submitting the standard rosters for 2024, this had since been rectified, and agreements were made to improve the process for 2025.
Tip: Although monthly rosters do not always fall under the works council’s right of endorsement, as they often impact employees individually, the court did rule that they must be published in a timely manner. It is advisable for the works council and the director to make agreements, such as in a covenant, to streamline this process, as was done in this case retroactively.
Tip: When introducing or changing schedules, it is crucial to distinguish between the scheduling policy and the individual schedules themselves!
Click here to read the full ruling.
Do you have questions about employee participation rights, such as the right of endorsement or the right of advice? Or do you need support in shaping your employee participation structure? Please contact one of our employee participation specialists. We are happy to assist you!
Renate Vink-Dijkstra, Partner & Attorney at law, Employment & Employee Participation
Thomas Catersels, Attorney at law, Employment & Employee Participation
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