The Dutch State Secretary Klijnsma has submitted a Bill to Parliament which seeks to extend the Works Council’s right of consent in relation to pension schemes. The bill is based on the advice issued by the Dutch Social and Economic Council (SER). It is not yet clear when the bill will enter into force.

 Right of consent

The right of consent is essentially the right to withhold consent to certain decisions planned by the employer. The result is that the employer cannot continue to implement the decision without the approval of the Works Council or the alternative consent of a judge – i.e. the right to consent, in fact, constitutes a veto right. The Works Council, however, does not have a separate right of consent if the relevant matter has already been dealt with in a collective labour agreement or in a regulation of the employment terms adopted by a regulatory authority.

Current situation

The Works Council currently has a right of consent with regard to the intended decision of the employer to establish, amend or revoke a pension scheme that is administered by an insurance company or a premium pension institution. If, however, the pension is arranged via a mandatory industry-wide pension fund or a company pension fund, the right of consent applies solely to the establishment or revocation of pension arrangements. In addition, the current law provides that the Works Council must be involved with the pension agreements, but not with the administration agreements, which are the agreements between the employer and the pension provider. In practice, important (financial) arrangements are, in fact, set out in the administration agreement.

Key changes

The following changes are to be introduced:

  • The Works Council will have the right of consent with regard to the establishing, amending or revoking of pension schemes regarding a pension agreement, irrespective of the pension administrator.
  • The Works Council will have the right to be informed of intended amendments to the administration agreement. If the intended amendments to the administration agreement will have a direct impact on the pension agreement, i.e. the employment conditions with respect to pensions, then such amendments will fall under the scope of the Works Council’s right of consent. This will be the case in any event with regard to a regulation on how the premium is determined or a regulation on the granting of supplements.
  • The Works Council will not have a right of consent if the pension agreement is placed with a mandatory industry-wide pension fund.