No Right to Consent on Primary Employment Conditions for the Works Council
A discussion of the judgment of the Court of Appeal of The
Hague dated 23 March 2010, LJN BM0767
No Right to
Consent According to the Subdistrict Court of Rotterdam
Last summer the Subdistrict Court of Rotterdam (JAR 2009/210,
see also our
newsletter of November/December 2009) ruled
that four changes that a company wished to carry through for two
groups of managers were not subject to consent. This concerned
the following changes:
- cancelling the Reduction of Working Hours ("ADV")
days and age-dependent holidays, and increasing the gross
salary as compensation;
- introducing a recruitment freeze for an unlimited period of
time for two job groups;
- freezing the salaries for two job groups;
- adjusting the remuneration targets and the moment when they
are paid out (from once to twice per year).
The Central Works Council (Centrale Ondernemingsraad,
"COR") invoked the nullity of the changes and took the
position that the changes of the arrangements were subject to
consent. The Subdistrict Court was of the opinion that the changes
were not subject to consent. The COR lodged an appeal against the
judgment of the Subdistrict Court.
The Judgment of the
Court of Appeal
The Court of Appeal considered that the starting point is that
the powers to consent of the COR and the Works Council stipulated
in Section 27 of the WOR do not relate to the primary employment
conditions and that the enumeration provided in Section 27 of the
WOR is limitative. Next, the Court of Appeal considered that the
question of whether a decision falls within the scope of Section 27
of the WOR should be adjudicated while taking into account the
contents, objective and purport of the decision concerned.
In the opinion of the Court of Appeal, the decision to cancel
the ADV and age-dependent days is not subject to consent. The
number of holidays to which an employee is entitled is part of the
primary employment conditions and the change of that number is in
itself not subject to consent. Since only the number of holidays
was changed, the Court of Appeal ruled that this change could not
be regarded as a change of a holiday scheme as meant in Section 27
(1) (b) of the WOR.
The decision to introduce a recruitment freeze is not subject to
consent either in the opinion of the Court of Appeal. The reason
for this is that decisions regarding the opening of vacancies or
the cancellation thereof, such as the recruitment freeze, do not
qualify as a scheme in the field of recruitment policy as meant in
Section 27 (1) (e) of the WOR or as a change in the field of
employment conditions as meant in Section 27 (1) (d) of the
WOR.
The freezing of the salaries is not a decision that falls under
Section 27 of the WOR either. After all, the amount of the salary
is a primary employment condition and therefore not subject to
consent. The Court of Appeal ruled that the fact that there is a
change in the actual relationship between the group of employees
whose salary is indeed increased and the group whose salary is not
increased does not imply by definition that the remuneration scheme
of Section 27 (1) (c) of the WOR has changed. Due to the fact that
these two groups have always 'moved' completely separately,
the Court of Appeal thinks that it cannot be stated that there is a
remuneration scheme that includes both groups and therefore that
there is no change thereof either by the freezing of the salaries
of one of the groups.
To conclude, the Court of Appeal ruled that the change regarding
the variable remuneration does not relate to the amount of the
'bonus opportunity', so that no change is made either to
the fixed and the variable part of the remuneration to be achieved.
In the opinion of the Court of Appeal, the change concerned relates
to the amount of the primary employment conditions to such an
extent that there is no question of a change of a remuneration
scheme within the meaning of Section 27 (1) (c) of the WOR.
The Court of Appeal upheld the judgment of the Subdistrict
Court.
Tips:
- The enumeration provided by the WOR in Section 27 is
limitative with respect to the right to consent.
- The powers to consent of the Works Council as stipulated in
Section 27 of the WOR do not relate to decisions with regard to
primary employment conditions.
- The Works Council has no right to consent with regard to
decisions concerning the opening or cancellation of
vacancies.
- Reduction of the number of holidays is in itself not
subject to consent.