The WEOR applies to undertakings or groups of undertakings which, over the past two years, have had an average of at least 1,000 employees in the EU, of whom at least 150 were employed in each of at least two Member States. Approximately 73 EWCs are currently based in the Netherlands, 43 of which have a Dutch parent company.
The new rules are intended to improve information sharing and consultation on transnational matters, including reorganisations, business closures and major investments with implications for more than one Member State. The amendments are designed to ensure that employers and employees engage in timely and meaningful dialogue on proposed decisions.
What exactly is changing?
Removal of exemptions
To date, undertakings that established an EWC before 5 February 1997 under a voluntary agreement have been exempt from the WEOR. This exemption will cease to apply on 2 January 2028. From that date onwards, all businesses will be subject to the same legal rules, ensuring equal rights for all employees and equal obligations for all undertakings. In the Netherlands, this will affect 11 undertakings.
A clearer definition of transnational matters
The concept ‘transnational matters’ will be defined more precisely. In practice, debate still regularly arises as to whether or not a proposed decision is transnational in nature. Under the new definition, a matter will be regarded as transnational if it is expected to affect employees in more than one Member State, whether directly or indirectly. The definition thus extends to decisions initially taken in one Member State that are reasonably likely to affect employees in another Member State. In essence, this codifies existing common practice.
Strengthened information and consultation procedure
The information and consultation procedure is being strengthened in two respects:
- From now on, information will be provided at such time, in such fashion and with such content that employees’ representatives can undertake an in-depth assessment and prepare for consultations.
- From now on, the EWC will receive a reasoned written response to their opinion from central management, provided that the employees’ representatives have expressed their opinion within a reasonable time – and that this takes place before the decision is adopted. The urgency of the transnational matter will be taken into account in the above.
Confidential information: objective criterion
From now on, whether an undertaking has a legitimate interest in providing information in confidence will be assessed using an objective criterion aligned with the definition of ‘trade secret’ in the Trade Secrets Protection Act (Wet bescherming bedrijfsgeheimen, Wbb). If the information falls outside this definition, central management and the EWC may agree on tailor-made confidentiality arrangements. Information that – even if it were to be kept strictly confidential – would seriously jeopardise the undertaking’s operations, can be withheld altogether. Central management must, however, explain why the information is not being provided.
Gender balance
There is a best-efforts obligation to ensure a balanced representation of men and women within the special negotiating body (SNB) (the group of employees’ representatives that negotiates with management on the structure of the EWC) as well as within the EWC and the select committee (if one is established). The target is for each gender to account for at least 40% of the members. If this target is not met, a written explanation must be provided to employees setting out why the target could not be met and what circumstances played a part in that outcome.
Meetings: at least two a year
Under the subsidiary requirements (the statutory minimum arrangements that automatically apply if the employer and the employees’ representatives are unable to reach an agreement), the minimum number of meetings between central management and the EWC will increase from one to two each year. In exceptional cases, meetings may be held online or in a hybrid format, provided that meaningful information provision and consultation can still take place.
Law enforcement
Enforcement is being tightened up and brought into line with the framework under the Works Councils Act (Wet op de ondernemingsraden, WOR). The Enterprise Chamber will be expressly empowered to take two types of measures:
- General measures: the Enterprise Chamber can require an undertaking to take certain actions or, conversely, to cease certain actions.
- Specific measures in the event of shortcomings with regard to information and consultation: where a breach of the information provision and consultation obligations is successfully invoked (Article 7a WEOR), the Enterprise Chamber may order the undertaking to revoke a decision in whole or in part, to undo its effects, or to refrain from implementing it.
Notably, unlike a Dutch works council – which can challenge the substance of certain decisions under Article 26 WOR – an EWC cannot mount a legal challenge against the decision itself. The Enterprise Chamber’s specific measures referred to above are available only in the event of a shortcoming in the information and consultation procedure. If the procedure has been carried out correctly in accordance with Article 7a WEOR, central management is free to disregard the EWC’s opinion without the EWC having any legal remedy against that decision.
Failure to comply with a measure imposed by the Enterprise Chamber is prohibited and is punishable as an economic offence under the Economic Offences Act (Wet op de economische delicten, WED). For legal entities – which Community-scale undertakings always are – the court may impose a fine in the fifth category (up to EUR 110,000), taking into account the seriousness and duration of the infringement, its consequences, and the undertaking’s annual turnover.
All reasonable costs incurred by the EWC, including those relating to litigation and the engagement of legal experts, will be borne by the Community-scale undertaking or the parent company from now on. This also applies to the costs of training and professional development activities completed during working hours with continued payment of wages, provided the undertaking has been notified of these costs in advance.
Implications for Dutch practice
Transitional law: two implementation dates
The transitional regime provides for two dates:
- 2 January 2028: the exemptions will cease to apply and the amendment scheme for existing agreements will come into force.
- 2 January 2029: all other new provisions will come into force, including the mandatory law rules on information and consultation, the definition of transnational matters and the rules on confidentiality.
Existing EWC agreements
Existing EWC agreements will remain legally valid during the transitional period but must be amended to comply with the new WEOR requirements by 2 January 2029 at the latest – in particular with regard to the matters governed by Article 11(3), (6) and (7) WEOR. In particular, amendments to existing agreements will need to address the following: the rules on information and consultation (including the obligation to provide a reasoned written response before a decision is adopted); the definition of transnational matters; the confidentiality rules (including alignment with the definition of ‘trade secret’ under the Trade Secrets Protection Act); arrangements regarding gender balance (the best-efforts obligation to ensure at least 40% representation of each gender); arrangements regarding experts (including legal assistance) and training for EWC members; and the format of meetings (in person, hybrid or online). The parties will have a two-year negotiation period in this regard. If no agreement is reached, the statutory minimum arrangements will automatically apply as a fallback. Undertakings with a voluntary agreement dating from before 5 February 1997 will be fully subject to the WEOR from 2 January 2028 onwards and will likewise be given two years to conclude a new EWC agreement.
The Dutch works council
The Dutch (central or other) works council will retain a key role in appointing members from the Netherlands to both the EWC and the SNB. EWC members have the right and the means to inform the national employees’ representatives – or, in the absence of these, the employees themselves – about the content of the information and consultation within the EWC. In the Netherlands, this communication generally takes place via the (central or other) works council.
Online consultation
The draft legislative proposal is open for consultation until 7 August. This means that employers, employees and other stakeholders can submit comments and highlight practical points for consideration. The proposal might still be amended in light of the responses received.