Works council and dismissal law

Works council and dismissal law: 6 essential topics

  1. Prohibition of termination of your employment contract

In the Dutch Civil Code (DCC) there are two distinguishable groups of employees who receive extra employment protection based on their participation in the work of the works council. Both groups are protected by a prohibition of termination.

The first group of persons is described in chapter 10, paragraph 9, of Book 7 of the DCC:

  • members of the works council;
  • members of the central works council;
  • members of the group works council;
  • members of a standing committee or a committee for part of the enterprise of the works council;
  • members of the employee representative body;
  • members of an Arbo-committee within the enterprise;
  • members of the European works council;
  • the secretary of the works council or the employee representative body.

The second group is described in article 7:670, paragraph 10, DCC:

  • the employee who is placed on a list of candidates for the works council or the employee representative body;
  • the employee who has been a member of the works council, central works council, group works council or of a committee of these councils or of the employee representative body for less than two years ago;
  • the employee who as employee representative, has been a member of the special negotiation group of the European works council in European Works Councils Act for less than two years ago;
  • the employee who has acted as representative of information and consultation of workers at a European works council as mentioned in the European Works Councils Act for less than two years ago;
  • the employee who is a member of a committee to prepare matters of the works council, central works council or the group works council;
  • and the employee as mentioned in article 62 of the Personal Data Protection Act.

 

  1. Exclusion from job protection

The prohibition to dismiss the persons mentioned in the two groups above (ex article 7:670 DCC) does not mean that an employer could never terminate the working relationship with a person who falls under the protection of this provision.

The employment contract can – depending on the circumstances – despite the job protection be terminated in the following situations:

  • termination during the probationary period;
  • summary dismissal;
  • termination with written permission of the employee;
  • termination because of business economic reasons, if the employee/works council member works for longer than 26 weeks at the workplace that is going to be cancelled;
  • termination because of cessations of the company’s activities;
  • the employer requests the dissolution of the employment contract on the basis of article 7:671b DCC. The request for dissolution may not relate to the prohibition of termination. If dismissal relates to works council-activities, the request needs to be rejected. Exception is possible if dissolution is in the interest of the employee;
  • the employer requests dissolution of the employment contract on the basis of article 7:686 DCC due to a culpable shortcoming to perform the contract (breach of contract);
  • termination of the employment contract can sometimes also take place during suspension of payments and bankruptcy;
    In addition, an employment contract can also end by mutual agreement or automatically after expiry of a fixed-term employment contract.

 

  1. Role works council in case of dismissal of director

Article 30 Works Councils Act obliges the entrepreneur to give the works council the opportunity to give advice with regard to any proposed decision for appointment or dismissal of the director of the enterprise.

The director is described in article 1, paragraph 1, sub e Works Councils Act as the person who “alone or jointly with others, exercises the highest direct authority in managing work within an enterprise”. The director is therefore the natural person, who in the day-to-day management of labour ‘has no one above them anymore.’

Article 30 of the Works Councils Act therefore concerns the director within the meaning of the Works Councils Act, i.e. the person who alone or together with others in the company has the highest control over the management of the work. The term director in the Works Councils Act has a different meaning than the term director in company law.

The advice on the intended decision shall be invited at a time when it can still significantly affect the decision to be taken. This means that the works council must be informed in a timely manner. The works council also has the right to advise on termination of the employment contract between an employer and a director on the basis of a settlement agreement.

 

  1. Role of the works council in the event of multiple dismissals and collective dismissal

Multiple dismissals: dismissal of two or more employees

In case of multiple dismissals – the dismissal of two or more employees -, the works council should be consultd on a regular basis. Article 25 of the Works Councils Act stipulates that in certain situations a proposed decision must be submitted to the works council for advice. A significant reduction in the enterprise’s activities or a major change to the organization of the enterprise frequently results in the dismissal of one or more employees. See art. 25, paragraph 1, sub c, d or e Works Councils Act.

The term major in the Works Councils Act is not expressed in a number. Major means in the first place that it must be an unusual decision for the entrepreneur. A decision he proposes to make with regards to the dismissal of a group of less than 20 employees, often falls under the advisory rights of the Works Councils Act.

 

Collective dismissal and works council

Article 3 WMCO pertains to the termination of the employment contracts of twenty or more dismissals within a period of three months of employees geographically working within one UWV-district. In such a case, both trade unions and works councils can play a role. The trade unions have been given the primary role in this process, but the works councils can also play an impotrant role according to article 25 Works Councils Act.

 

  1. Social plan and dismissal policy

A social plan regulates the provisions for the dismissal of the employees.  In which the trade unions and/or works councils should be involved.

The term social plan

The term social plan is not defined by law. A social plan has many forms and contents. Globally speaking, a social plan can actually be considered as two types of arrangements. On the one hand, these are arrangements for the employees who despite the restructuring keep their job within the relevant enterprise. On the other hand, it concerns arrangements for those whose employment contracts are to be terminated as part of the restructuring: the redundancy arrangements.

Social plan with works council

A social plan can also be concluded with a works council. The case law of the Enterprise Section of the Amsterdam Court of Appeal stipulates that the works council has the right of advice over the social plan as well,, because it provides insight into the intended measures as referred to in article 25, paragraph 3, of the Works Councils Act. This is even the case when the social plan is concluded with the trade union.

 

  1. Right of consent for dismissal policy

Article 27, paragraph 1, sub e Works Councils Act grants the works council the right of consent with regard to the policy on dismissal.

The law or legislative history do not indicate what exactly is to be understood by the term dismissal policy. There is little case law on regulations in the field of dismissal policy ex article 27, paragraph 1, sub e Works Councils Act.
In practice, the right of consent  is not being actively ‘claimed’ by the works councils with regards to dismissal regulations in the sense of article 27 paragraph 1 Works Councils Act. In practice, the employee participation of the works council regarding dismissal policy almost exclusively takes place within the framework of article 25 Works Councils Act (right of advice).  In this case, the social plan shall be considered as information on the consequences of the business decision for the persons employed in the enterprise and on the measures taken in that framework.

Parts of a social plan can fall under the right of consent.