News

Complete name of the Act

The Act amending the Works Council Act (WOR) and the Pension Act concerning the rights of the Works Council relating to pension as an employment condition (of 22 June 2016)

Date of the entry into force

1 October 2016.

What is the purpose of the act

The purpose of the act is to clarify that the works council has a right of consent concerning entering into, changing and terminating regulations on the basis of a pension agreement, irrespective of where this has been recorded (in the pension agreement, implementation agreement, the pension scheme or otherwise) and irrespective of the kind of pension provider. Click here for a link to the explanatory memorandum.

What is changing?

Expansion right of consent of the Works Council (OR)

Article 27 paragraph 1(a) Works Council Act (WOR) dealt with the right of consent of the Works Council (OR) in “a regulation relating to a pension insurance”. This has been changed into: “regulations based on a pension agreement”.

The seventh paragraph of art. 27 WOR has been amended and reads as follows:

Regulations based on a pension agreement as meant in the first paragraph, sub a, are also to be understood regulations included in an implementation agreement as meant in article 1 of the Pension Act or an implementation scheme as meant in part b of the definition of implementation scheme in article 1 of the Pension Act, which impact the pension scheme in any case understood to include: regulations about the way in which the premium due is being determined, the criteria for and the conditions under which indexation takes place and the choice of assigning it to a particular pension provider, pension institution from another member state or insurer with head office outside the Netherlands as meant in article 23, first paragraph, of the Pension Act.

The result of the proposed change is that the Works Council (OR) gets a right to consent on any intended decision to institute, change or revoke a regulation based on a pension agreement, irrespective of the pension provider being an insurer, a Premium Pension Institution (PPI) or a foreign provider.

Of course, the exception under art. 20, paragraph 3 Works Councils Act (WOR) applies here that the Works Council (OR) does not have a right to consent when the subject has already been regulated in the collective labour agreement (CAO) or a regulation of labour conditions determined by a statutory body.The Social and Economic Council (SER) subscribes to the opinion that the right to consent of the Works Council (OR) applies to the pension as an employment condition and not to its implementation. Should it however concern an aspect in the implementation agreement which clearly impacts the pension as an employment condition, such as the revocation of an employer’s obligation to make additional capital payments or the reduction of an indexation deposit with the insurance company, then this is part of the right to consent of the Works Council (OR)

Because the dividing line between the content of the pension scheme and its implementation is hard to draw, the SER advises to leave the determination of which segments of the implementation agreement are part of the pension scheme with employers and employees.

Should, in a specific case, asking the consent of the Works Council (OR) be less clear, then the OR has to state and prove in a judicial procedure that the specific implementation does indeed mpact the pension as an employment condition.

Right to information of the Works Council (OR)

A new article 31f is added to the Works Council Act:

“The employer is obliged to inform the works council as early as possible of any intended determination, change or repeal of an implementation agreement as meant in article 1 of the Pension Act.”

In art.1 of the Pension Act the implementation agreement has been defined as follows: “the agreement between an employer and a pension provider about the implementation of one or more pension agreements”.

Whom does the act affect?

The Works Council (OR): has better employee participation (right to consent) regarding regulations based on a pension agreement;

The employer: has to co-define the employee participation by asking consent regarding regulations based on a pension agreement and has to provide information to the Works Council in a timely manner;

The pension provider: adapting or amending regulations based on a pension agreement with her client has become more complicated.