SØRENSEN LAWYERS works with US-led organizations to translate global restructuring decisions into Dutch-compliant execution.
Restructuring in the Netherlands: the role of the works council
A restructuring plan is finalized at group level. The timeline is set. The Dutch HR team is handed the execution. At some point, ideally at the start of planning, in practice often considerably later, someone asks whether the works council needs to be involved.
If the Dutch entity has a works council, the answer for most significant restructuring decisions is yes. And the moment at which that question gets asked has a direct bearing on whether the process stays on schedule.
What the works council is
Any Dutch company with 50 or more employees is legally required to establish an ondernemingsraad (OR), a works council of elected employee representatives. This is not an informal consultative body. It is a statutory institution with defined rights and the ability to enforce those rights before a specialist court.
Under Article 25 of the Wet op de ondernemingsraden (WOR), the works council holds a statutory right of advice on a defined category of significant decisions. That category includes major restructurings, mergers and acquisitions, significant changes to the company’s organizational structure, outsourcing and collective redundancies. These are precisely the decisions that tend to reach Dutch subsidiaries from US parent companies as completed plans, on compressed timelines.
What Article 25 WOR requires
The employer must request the works council’s advice in writing before the decision is made, or at the latest before it is implemented. The request must set out the reasons for the proposed decision, the expected consequences for employees and the measures the company intends to take in response to those consequences.
Critically, the advice must be sought at a point in time when it can still genuinely influence the outcome. A works council that is informed of a decision already final in all practical respects, where the announcement has been made, the structure is fixed and the timeline is set, has not been properly consulted within the meaning of the WOR.
After receiving the request, the works council has the right to deliberate, put questions to management and issue a formal written opinion. If the employer proceeds despite a negative advice, the works council can appeal to the Ondernemingskamer, the Enterprise Chamber of the Amsterdam Court of Appeal. The Enterprise Chamber has authority to suspend implementation of the decision if it finds the employer acted unreasonably or that the consultation process was not genuine.
This is an enforceable right that works councils have exercised, including against restructurings driven by US group mandates where the Dutch procedure was treated as a formality.
Where it goes wrong
The most consistent problem in international restructurings is treating the works council procedure as a compliance step to be completed rather than a process to be run. Providing a compressed consultation window, incomplete financial information or, whether explicitly or by implication, a sense that the decision is already irreversible are precisely the indicators the Ondernemingskamer examines when assessing whether consultation was genuine.
A well-organized works council, and Dutch OR’s are generally well-organized, will ask substantive questions: about the financial basis for the restructuring, what alternatives were considered, how the selection of employees was determined and what the consequences will be for those affected. An employer that cannot or will not answer those questions substantively creates a record that is difficult to defend.
Build the timeline into the project plan
The works council procedure takes time, typically four to eight weeks, and longer for complex restructurings. That timeline must be built into the project plan from the beginning, not retrofitted after the global announcement has already been made.
Engaging the works council early, providing complete information and responding substantively to its questions does not prevent an employer from ultimately proceeding with a decision the works council disagrees with. What it does is place that decision on procedurally sound ground, ground that holds up when challenged.
U.S. vs. Netherlands: employee consultation in restructuring
| United States | Netherlands | |
| Consultation body | No statutory equivalent | Ondernemingsraad (works council) mandatory at 50+ employees |
| Legal basis | No direct equivalent | Article 25 WOR, statutory advice right |
| Timing | No requirement | Before the decision is made or implemented |
| Content required | No equivalent | Reasons, employee impact, proposed measures |
| Enforcement | Not applicable | Appeal to Ondernemingskamer; implementation can be suspended |
| Typical timeline | Not applicable | 4 to 8 weeks; longer for complex restructurings |
Quick answers
Does every Dutch company have a works council?
Any Dutch company with 50 or more employees is legally required to establish a works council. Companies with between 10 and 49 employees may be required to establish a personnel representation body (personeelsvertegenwoordiging) with more limited rights.
What decisions require works council advice under Article 25 WOR?
Article 25 WOR covers major restructurings, mergers and acquisitions, significant organizational changes, outsourcing and collective redundancies, among others. If a restructuring decision falls within this category, prior written advice is required before the decision is implemented.
What happens if the employer proceeds despite a negative works council advice?
The works council can appeal to the Ondernemingskamer. The court can order suspension of the decision’s implementation if it finds the employer acted unreasonably or that the consultation was not substantive.
When exactly must works council advice be requested?
The advice must be sought at a point when it can still genuinely influence the decision, not after the outcome is fixed. Timing is one of the most frequently contested issues in works council proceedings and is central to whether the Ondernemingskamer finds the process adequate.
Can the works council block a restructuring?
No. The works council does not have a veto. However, where its advice is negative and the employer proceeds, the Ondernemingskamer can suspend implementation. The employer that has run a proper process (genuine information, adequate time, substantive engagement) is in a significantly stronger position than one that has not.
When to involve legal counsel
Before the OR advice request is submitted: The advice request is a legal document with defined content requirements. How the restructuring is described, what information is included and how the expected employee impact is framed all matter, both for compliance and for the substantive response the works council will give.
During the consultation period: Works councils ask pointed questions. Having legal counsel available to advise on how to respond (particularly to questions about financial projections, selection criteria and alternatives considered) is important for maintaining a defensible record.
If the works council issues a negative advice: The employer must formally decide whether to proceed and on what grounds. That decision requires deliberation, documentation and, if challenged, a position that holds up before the Ondernemingskamer.
SØRENSEN LAWYERS structures works council procedures for US-led organizations planning restructurings in the Netherlands, advice requests, consultation strategy, management of the OR process, response to works council questions, and coordination with WMCO notifications and UWV filings where collective dismissal is involved. If you are planning a restructuring that involves your Dutch workforce, contact us before the process begins.