September, 2013.
The role of the expert in labor relations in the Netherlands
The Dutch systems of labor relations is a two channel system with separate roles for the trade unions and the works councils. Contrary to the practice in many European countries, the link between the two is not necessarily strong: most works councils –not all- have unionized members, but in most cases they are not in the majority. More importantly, unions and works councils each recognize the role of the other and the differences that exist between them.
The main difference is that the unions, by law, carry the responsibility for matters regarding so called primary labor conditions, in most cases laid down in collective agreements that may cover laborers of one specific company or of an entire sector. These agreements typically apply to union members and none-members, because the Minister of Social Affairs has the power to declare an agreement binding for members and none members alike. Unions are also the preferred partner to negotiate social plans that deal with the social consequences of a restructuring. As a matter of fact these plans almost have the judicial status of a collective agreement.
Works councils on the other hand only represent the people working in the enterprise and they only deal with issues regarding that specific enterprise. Which matters they deal with is defined in two articles of the Law on Works Councils, i.e. articles 25 and 27. When items in article 27 (mainly dealing with HR-related issues) are already covered by a collective union agreement, that agreement prevails.
The role of the expert then, revolves around these two articles in the law on works councils and on the law itself, on its application and pursuing conflicts. Before we go into further detail it should be mentioned that the unions of course function as experts too, mostly for their members. Unions do work as experts for works councils, but quite often only where they have a substantial membership. In the majority of cases, experts work for commercial organizations.
As stated, the subjects works councils deal with, are defined in the articles 25 and 27 of the law on works councils. Article 25 deals with management decisions that are potentially of great impact on the enterprise and therefor on the people that work there. Broadly speaking they involve decisions on restructuring, financing and loans, major investments or divestments and matters in the area of mergers and acquisitions etc. Works councils have the right to advise the management before management takes a final decision. In case management does not comply with the conditions the law demands from a “request for advice” and the procedure it involves, or in case the final decision of the management does not meet the conditions of the works council in its advise, the council can go to court.
The subjects dealt with in article 27 typically involve matters regarding the people working in the enterprise and policies dealing with them. Pension plans, job rating systems, reward systems etc. On these matters the works council has a right of consent. Failing to recognize the verdict of the works council also means the council can go to court.
Given these definitions the expert working for a works council typically knows her way around matters dealing with business administration, organizational design and development, business strategy and any such areas of expertise when dealing with “article 25”matters, while experts dealing with “article 27” matters, typically are poised on matters dealing with major HR-themes, including of course strategic HR. And as mentioned before, because of the judicial context of the law on works councils one often sees lawyers working on behalf of works councils.
Although these are fairly complex areas of expertise, most experts are generalists, who know a little about a lot and who combine their general knowledge with one area of true expertise, usually in either an article 25 area or an article 27 area.
Works councils require that their experts help them, not only with the content of the proposed decision they are requested to support, but also with the process of the request for advice or request for consent that is on the table. So the role of the expert requires knowledge about the content as well as feeling for and intricate knowledge of the process and all judicial aspects they involve. Finally the expert role requires creativity to deal with any mishaps that occur.
When it comes to the content the law requires that a request for advice or consent clearly states what measures the management proposes, why they propose them, what the consequences will be for the workers and how they will deal with these consequences through social measures. It follows then that the expert first of all needs to establish that the definition of the problem that management takes measures for, is adequate. Have the right analyses been made and the right conclusions drawn? He or she has to validate that the proposed solution is the best solution for the company and its stakeholder the workforce and that it is a balanced solution and that where social consequences occur, the proposed social plan is dealing with them. In many cases negotiations with the unions have not been finalized at the time of submission of a request, which requires the expert to work with the unions, delaying the advice to facilitate them in their negotiations. Given the higher complexity of organizations, with both internationalization and networking as the two most powerful complicating factors, more often than not the expert has a team of colleagues he or she can draw upon.
On the process side the expert helps the works council to gain and maintain a position. More often than not, due to internationalization, the management that is responsible, is residing in a far away country with local management putting pressure on the council to take a swift decision. Unions tend to put pressure on the council, through their members, to take a decision that is in line with their policies and views and the constituent of the council pressures the council in a position that is in line with their short term interests, whereas the council is required to also look at what is good for the company (as stated in the law).
Finally the council is a council of equals and taking a decision that often hurts part of the constituent of the council is no easy matter. In that role the expert works as a sparring partner for the special committee of the council and the council itself.
In short, in the role of the expert in the two channel Dutch system of labor relations generally is the role of a professional, helping a client (a works council) to validate the proposed management decisions through analysis of data, strategy etc. and to deal with the process both internal (in the council) and external, because of pressure by other stakeholders. Because of the two channel system, with in many cases a limited role for the unions in a works council, experts are quite often not union related.
