Court of Appeal of Amsterdam (Enterprise Section), 10 November 2011, JAR 2012/8
Request for Advice
The employer is a foundation that offers child care. In July 2010 the Works Council received a request for advice from the foundation about the intention to change the legal form of the foundation into a private limited liability company. Next, the foundation took the decision without awaiting the Works Council's advice. After the Works Council had appealed against the decision before the Enterprise Section, the parties entered into consultations. Subsequently, the foundation withdrew the decision and the Works Council withdrew the appeal before the Enterprise Section. One year later, the foundation requested the advice of the Works Council again about its intention to convert the foundation into a private limited liability company. The advice of the Works Council was negative because, in brief, it preferred the legal form of a foundation and the decision had been insufficiently substantiated. The foundation then informed the Works Council that it had taken the decision anyway, after which the Works Council went to the Enterprise Section once again.
Judgment of the Enterprise Section
The Enterprise Section argued first and foremost that in principle the foundation is free to use the statutory possibility of changing its legal form to a private limited liability company. However, this change has certain consequences to which the foundation had paid insufficient attention. The foundation had not sufficiently motivated its choice between the various alternatives either. The Works Council concluded that when weighing the interests involved, the foundation could not reasonably have come to the decision, and declared the appeal of the Works Council to be well-founded. The Enterprise Section then obliged the foundation to withdraw the decision to convert the foundation into a private limited liability company and to undo all consequences of the decision. The foundation was also prohibited from performing or having performed any acts in (further) execution of that decision or any parts thereof.
Tips
- Also in the case of a decision to which the employer is in principle entitled, the advisory procedure must be followed carefully and the intended decision must be well-supported by reasons;
- The Works Council should be critical, because failure to respond to the alternatives or questions brought forward by the Works Council may lead to the employer being obliged by the Enterprise Section to reverse the decision;
- The employer should be careful and should respond (well-supported by reasons) to questions and proposals for alternatives of the Works Council.
First published in the Kennedy Van der Laan newsletter - March 2012
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
