Works council advisory rights (adviesrecht) under Article 25 WOR
The Works Councils Act (Wet op de ondernemingsraden, WOR) grants the works council (ondernemingsraad) an advisory right (adviesrecht) over major organisational and economic decisions of the enterprise. Article 25 WOR contains an exhaustive list of decisions that require the employer to seek the works council's advice before implementation. These include: transfer of the business or a substantial part of it, major investments, significant financing arrangements, restructuring (reorganisatie), collective redundancy, outsourcing, and establishing or dissolving a joint venture.
The advisory right is not a veto right - the employer is not bound to follow the works council's advice. However, the employer must genuinely consider the advice and, if it wishes to deviate from it, must explain in writing why it does not follow the works council's recommendation. The employer must also wait one month after providing this explanation before implementing the decision, during which time the works council can appeal to the Enterprise Chamber (Ondernemingskamer) of the Amsterdam Court of Appeal.
The advisory procedure in practice under Dutch law
The employer must submit a written request for advice (adviesaanvraag) in good time - that is, at a stage when the works council's opinion can still meaningfully influence the decision. A request submitted after the decision has effectively been taken is procedurally defective. The works council is entitled to all information it needs to give a considered opinion, including financial data, the reasons for the decision, and the expected consequences for employees.
The works council's advice must address the consequences of the proposed decision for the employees and any measures the employer proposes to mitigate those consequences. In restructuring situations, a well-prepared works council advice can be an important factor in subsequent discussions about a settlement agreement or social plan (sociaal plan).
Appeal to the Enterprise Chamber under Dutch law
If the employer ignores the advisory procedure or proceeds with a decision that the works council considers unreasonable, the works council can appeal to the Ondernemingskamer. This specialist court can prohibit or suspend the implementation of the decision, or order the employer to reverse action already taken. The threshold is that the employer's decision must be unreasonable given all the circumstances - a relatively high standard, but one that courts do occasionally apply in significant restructuring cases. The advisory right is particularly significant in the context of business transfers: Article 7:665a of the Dutch Civil Code requires the transferor employer to inform works council members of a projected transfer in good time, covering the intended date, the reasons, the legal, economic and social consequences, and the measures proposed for employees. The Hoge Raad has ruled that the employer is obliged to inform employees clearly about the various options in a transfer situation. Separately, the works council must be consulted on collective redundancy plans and on decisions to outsource or relocate activities, making it a central actor in any large-scale restructuring.