The promotion of equal career opportunities for women is rightfully in the spotlight. Despite numerous attempts by national and European legislators, there is still a battle to be won in the Netherlands. The latest official figures show that the average hourly wage of women in 2021 was still 13% lower than that of men.[1]

It is often overlooked that the Dutch works council is able to drive equal opportunities for women. The works council can force change in companies, to a certain extent. It is important that companies take this into account and adjust their policies accordingly. The works council can exert influence through:

• the right to consent regarding any contemplated decision to adopt, amend or abolish regulations on hiring and promotion of staff;
• advisory rights in the appointment of certain directors and, in some cases, influence on the composition of the board of directors and/or the supervisory board;
• the statutory duty to promote gender equality and entitlement to all the information it needs to fulfil that duty;
• the right to make proposals in the field of equal treatment; and
• attaching conditions to any advice and/or consent it gives, regardless of the topic on which the works council is consulted.

Right of consent regulations on staff appointment and promotion

The most firm, concrete right that the works council has with regard to the promotion of equal opportunities for women is the right of consent for every contemplated decision to adopt, amend or withdraw regulations in the field of hiring and promotion of staff.[2] If the works council does not agree with a contemplated decision of the employer, because, for example, the decision does not sufficiently address the promotion of equal opportunities for women, the company will have to obtain substitute permission from the court to be able to take legal action. The works council thus has a powerful tool to enforce equal opportunities or even promote affirmative action for women.

Influence on appointment of directors or supervisory directors

The works council has the right to advise on the appointment of directors pursuant to the Works Council Act (WCA), meaning on those who exercise the highest control in the management of labour.[3]This is not always a director of the company, but can be a branch, country or location manager. The advisory right is non-binding. The works council has no right of appeal if the company proceeds with the appointment of the director despite receiving negative advice.

In public limited companies, the works council must be given the opportunity to state its position on the proposed appointment of a director of the company.[4]

Large companies may be required by law to have a supervisory board. For the composition of the board, the supervisory board draws up a profile, which must be discussed with the works council upon adoption and amendment. The works council can also recommend candidates for the board and has an enhanced right of recommendation with regard to one third of board members. This right essentially means that the supervisory board (with some exceptions excluded) takes on the recommended person and nominates them to the shareholder for appointment.[5]

In all these cases, the works council can exert its influence to get more women into top positions in the company.

Duty to promote equal treatment and right to information

The previous rights and powers are relatively well known. A lesser-known power is that the works council has a statutory duty to promote the equal treatment of women and men within the company.[6] The law does not clarify what that task entails in concrete terms, so the works council chooses its own view of the task. Thus, the works council may choose to make an explicit effort to improve the position of women within the company.

Information is crucial to properly fulfil the works council’s duty of care to promote gender equality. The law gives the works council the right to obtain all necessary information from the company for the proper performance of its duties.[7] For example, the works council may request detailed information on pay differences between women and men.

Works council right of initiative

The works council has the right to make proposals on (almost all) matters affecting the company, including on promoting gender equality. The right to information will allow the works council to properly substantiate its proposal. The company is not obliged to adopt proposals from the works council, but the law stipulates that at least one consultation meeting must be held, in which the proposal will be discussed.[8] The works council can require that in some cases delegates of the shareholder or the supervisory board be present at this meeting.[9] The works council thus increases its audience.

Negotiation tactics

The strongest rights of the works council are the advisory right and the right of consent regarding specific situations described in the law. In most cases, those situations are not related to gender equality. Nevertheless, the works council can also put this issue on the agenda by attaching conditions to offering positive advice on, or consent to, a contemplated decision by the company. The works council can negotiate to fulfil its duty of care and achieve its objectives. If the company is not willing to accept such conditions, there is a risk that the matter must be brought before the courts and that the contemplated decision cannot be implemented pending the outcome of court proceedings.

To avoid the risk of the works council blocking or complicating the implementation of important decisions, most companies will be inclined to take a positive stance against such conditions attached by the works council. The works council is an important stakeholder in Dutch companies and companies will be keen to maintain and continue a good, constructive relationship with it.

Comment

There is still work to be done to improve equal career opportunities for women in the Netherlands, as demonstrated by the fact that there is still a significant gender pay gap. The Dutch works council has several tools to promote equal treatment of women and is a body to be reckoned with.

This article was written for the International Women’s Day special of Lexology’s International Law Office newsletter.

Endnotes

[1] Dutch Central Bureau of Statistics (29 April 2022).

[2] Section 27 of the WCA.

[3] Section 30 of the WCA.

[4] Section 2.134a of the Dutch Civil Code.

[5] Sections 2:158 and 2:268 of the Dutch Civil Code.

[6] Section 28 (3) of the WCA.

[7] Section 31 of the WCA.

[8] Section 23 of the WCA.

[9] Section 24 of the WCA.