The Works Council cannot bind the company, but it has to be involved in the decision-making process on many occasions. With respect to this, the law provides the Works Council with the following rights:
- The right to give advice. One of the most important rights of the Works Council is the right to render advice on proposed major financial and organizational decisions of the entrepreneur. The law determines which preliminary decisions are subject to the right to render advice. Consultation is required for, among other things, transferring (a majority of) the control within the company, reduction of activities, expanding or changing activities of the company, or raising an important loan.
- The right to give consent: Decisions concerning social policies within the company are subject to prior approval by the Works Council. Social policies can be regulations with regard to a pension insurance scheme, illness, working hours and vacation days. Without the consent of the Works Council, the company’s decision is null and void.
- The right to be informed: The Works Council has the right to be informed with regard to the financial, economic and social situation of the company. The Works Council always has the right to request the entrepreneur to supply information that is reasonably required for the proper execution of its tasks.
- The right to take initiative: The Works Council also has the right of initiative. It may present its proposals regarding all aspects of the company to the entrepreneur by means of a motivated notice in writing or during the consultation meeting.
In general, employees, Works Council and employee representation may demand observance of the law on employee participation by the entrepreneur by instigating proceedings before the Subdistrict Court. The subject of such proceedings could be, for instance, forcing the entrepreneur to institute a Works Council or an employee representation, or to act in accordance with the right to information.