NETHERLANDS Law and Practice Contributed by: Inge de Laat, Tijmen Noordoven, Ilaha Muhseni and Laetitia Wezenbeek, Rutgers & Posch
The works council has several important rights and duties, including: • the right to provide advice on significant financial, economic and organisational decisions made by the company; and • the right to give consent to proposals concerning the establishment, modification or revocation of regulations related to the company’s social poli - cies. If a company has multiple works councils, it may choose to establish either a central works council or a group works council. This choice should contribute to the proper implementation of the Works Councils Act within these companies. Employee Representative Body When a company has between 10 and 50 employees and does not have a works council, it may be required to establish an employee representative body ( person- eelsvertegenwoordiging ). This body must consist of at least three members who are directly elected through a secret ballot. 6.3 Collective Bargaining Agreements The Collective Labour Agreements Act ( Wet CAO ) defines the concept of a collective labour agreement and specifies which parties are authorised to enter into such agreements. A collective labour agreement is a written arrangement between one or more trade unions and one or more employers’ organisations. These agreements set out various terms and condi - tions of employment, including: • wages; • working hours; • pension schemes; • holiday entitlements; and • social provisions. These agreements are binding for both the employer and employee covered by the collective labour agree - ment.
There are two types of collective labour agreements: • for agreements with a minimum character, devia - tions are only permitted if they are more favourable to the employee than the provisions in a company scheme or individual employment agreement – deviations that are less favourable to the employee are null and void; and • for agreements with a standard character, any deviations from the terms are invalid and therefore null and void. If an employer is a member of an employers’ organi - sation that has concluded a collective labour agree - ment, the employer is obliged to apply the terms of that agreement to their employees. Additionally, the Minister of Social Affairs and Employ - ment may declare a collective labour agreement gen - erally binding upon request of the parties involved. This means the agreement applies to the entire sector, regardless of whether an employer is a member of the employers’ organisation that concluded the agree - ment. If the employer’s activities fall within the scope of the collective labour agreement, they must imple - ment its terms within their company. A fixed-term employment agreement or an agreement for a specific project ends automatically upon the expiration of the agreed period or completion of the project. For agreements lasting six months or longer, the employer is required to inform the employee at least one month in advance in writing whether the fixed-term agreement will be extended and, if so, under what terms. Termination of Open-Ended Contracts An employment agreement for an indefinite period can be terminated in the following ways: • termination by the employer with permission from the Dutch Employee Insurance Agency (UWV); 7. Termination 7.1 Grounds for Termination Fixed-Term Agreements
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