A works council is the body representing staff within a business. An entrepreneur with as a rule at least fifty people working in the business is obliged to establish one. The council holds powers of its own in relation to significant decisions.
Legal basis
The Works Councils Act governs the position. Article 2 imposes the duty to establish a council at fifty employees. Article 25 confers advisory rights on financial, economic and organisational decisions, such as transfer of control, closure or significant reduction of activities, and significant reorganisation. Article 27 confers consent rights on social arrangements, including working hours, working conditions, appraisal systems and the processing of employee personal data. Article 26 gives the council a right of appeal to the Enterprise Chamber where a decision departs from its advice; Article 27(5) renders a decision taken without consent void if the council invokes that in time.
How it works in practice
Advice must be sought at a point when it can still materially influence the decision; a proposed decision that has effectively been implemented makes the process worthless. Where the entrepreneur departs from the advice, the decision must be suspended for one month so that the council can go to the Enterprise Chamber. For consent matters the position differs: without consent, or substitute authorisation from the subdistrict court, the decision has no effect.
Where it goes wrong
Entrepreneurs seek advice too late, for instance only after signing a sale agreement without a condition. A second error is introducing staff monitoring or a new appraisal system without consent. Third, the distinction between advice and consent is confused, leading to the wrong procedure.
Related terms
The council plays a role in the UWV dismissal procedure on reorganisation, in the asset deal and in the data protection impact assessment for monitoring systems.
Facing an advice request or a consent process? Our employment law specialists advise entrepreneurs and councils alike.
