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Information and consultation of employees in the Netherlands

Information and consultation of employees in the Netherlands. Jan Kees Looise University of Twente. Content presentation. Legal provisions information and consultation of employees (focus on works councils) Factual application of these provisions (based on own research in 1987 and 1999)

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Information and consultation of employees in the Netherlands

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  1. Information and consultation of employees in the Netherlands Jan Kees Looise University of Twente

  2. Content presentation • Legal provisions information and consultation of employees (focus on works councils) • Factual application of these provisions (based on own research in 1987 and 1999) • Possible effects of information and consultation of employees • Some conclusions and general remarks

  3. Legal provisions information and consultation of employees • Law on works councils (since 1950) • Law on company structure (1971, 2004) • Laws on collective bargaining and the extension of collective agreements (1927/1937) • Law on reporting collective dismissals (1971,1993) • Law on official enquiry (1971)

  4. Law on works councils • Works councils are compulsory in all `undertakings’ (including organisations in public sector) with 50 and more employees • `Undertakings’ between 10 and 50 employees can choose between: - a works council - an employee representation (3 members) - employee meetings at least twice a year

  5. Legal rights Dutch works council • Right to advice on important strategic decisions • Right of veto on personnel management issues (if not in collective agreement) • Right of initiative on all issues • Information rights • Appeal rights with court  Weaker rights in small companies

  6. Factual position Dutch Works Council • Works councils are present in about 70% of all companies with > 50 employees. Of the companies between 10 and 50 employees about 30% has a works council and 30% an employee representation or representative • Large differences between different sectors (public and semi-public sectors vs. building, trade and transport sectors)

  7. Factual application information rights • According to 50% of the works councils information rights are applied in a reasonable way, 28% in a good way and 22% in a bad way • Information provision is best on personnel, organisational and general company issues and policies and fewest on financial, commercial and technological issues and policies

  8. Factual application advice rights • Works councils are spontaneously asked for advice in 60% of the cases in which they have to be asked for advice • After action by the works councils the percentage of asked advices risis to 80% of the cases. In only 2% of the cases works councils go to court to realise their right of advice

  9. Factual application veto rights • Works councils are spontaneously asked for approval in 65% of the cases in which they have the right of veto • After action by the works councils the percentage of asked approvals risis to 90% of the cases. In only 2% of the cases employers go to court to realise the approval of the works council

  10. Effects of works councils on decision making • According to 60% of the works councillors and the managing directors works councils have positive effects for: - the quality of decision making and of decisions themselves - the acceptance with and support of personnel for decisions - attention for personnel interests

  11. Effects of Works Councils on company performance • According to 25% of the works councillors and 10% of the managing directors works councils have positive effects for: - the efficiency of the company - the profitablity of the company - the innovation capacity of the company

  12. Conclusions on role works councils in information and consultation • Works councils are only present in 70% of large companies • Information and consultation rights are (reasonable) applied in 80% of these companies  In 50% of the larger companies no or bad exercise of information and consultation rights (and what about smaller companies?)

  13. Conclusions on role works councils in information and consultation • Works councils are representative bodies, with mostly weak ties with their constituency • The position of works councils is weakening due to all kind of organisational changes  Need for other channels of information and communication

  14. Need for more direct involvement in information and consultation • Nowadays need for (additional) direct forms of information and consultation at different levels • These forms can be initiated by management but should be controlled by works councils and/or unions  Do we need legal provisions for direct information and consultation?

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