The Dutch Supreme Court has decided that the works council needs to be consulted in the event a business is restarted following the liquidation of a company. If assets are sold in the context of a business restart and the expectation is that the associated jobs will be preserved, the decision relating to the sale is subject to works council consultation.
In an earlier judgment, the Amsterdam Court of Appeal found that works council consultation rights were incompatible with the trustee's primary task—namely, to collect as much money for the creditors as possible, regardless of whether this is achieved through the company's liquidation or restart. The Supreme Court has ruled otherwise. Recognizing that the trustee must be able to take swift action, however, the Supreme Court allows the trustee to derogate from procedural requirements which normally apply. If time is of the essence, this implies, for example, that the trustee may impose strict deadlines on the works council and that he does not have to submit comprehensive written reasons for the business restart.