8.7 Final conclusion

I have described a number of situations above in which the co-determination right of employees is not in keeping with the manner in which the decision-making is organised in that situation, even though that is one of the main principles of co-determination law. I have reviewed the works council’s powers under the Works Councils Act and a number of specific powers under Book 2 of the Civil Code, the Merger Code and the Public Takeover Bids (Financial Supervision Act) Decree. That review has specifically shown that the special powers are much better in keeping with the balance of control than the general powers under the Works Councils Act, which is due to the fact that the Works Councils Act is based on the enterprise concept. As a result of various “artifices” in case law and in practice, decision-making and co-determination are often lumped together. I refer to the Intergas doctrine, as a result of which advice must be sought on decisions that relate to the company, the link to the positive recommendation in the event of a takeover, and the doctrines of attribution, joint entrepreneurship and identification if a decision is made or proposed by an entrepreneur other than the entrepreneur to whose enterprise the works council is linked. This is practicable, and it may therefore not be desirable to change the current system. However, they remain artifices that are not truly in keeping with the system and may mean that co-determination does not have the desired effect, for instance because the measures taken by the Enterprise Section have no effect in relation to the shareholders’ meeting or because certain decisions, such as profit appropriation, fall entirely outside the employee representatives’ sphere of influence.

The special powers under Book 2 of the Civil Code, the Merger Code and the Public Takeover Bids (Financial Supervision Act) Decree were introduced for specific legal forms or specific situations, and are therefore better in keeping with the control ratios in the situations in question. Moreover, the works council and the trade unions have a number of other, more general powers at their disposal, such as proceedings under Sections 2:14-16 of the Civil Code, the right to institute an inquiry, the financial statements proceedings and the objection proceedings in the case of insolvency. Those proceedings offer employee representatives means of strengthening their position. There will nevertheless always be situations in which the employees play a limited role, despite the drastic consequences for the enterprise. To name a few examples: a transfer of business, a profit appropriation decision, a petition in the company’s own insolvency, a hostile takeover of the enterprise, forming part of an international group, and a cross-border change of the legal structure. I have therefore made a number of recommendations in the various chapters to strengthen the position of employee representatives. I have attempted in making those recommendations to base them to the extent possible on the principle of “co-determination follows decision-making” and have taken into account the interests of other stakeholders in the situation in question.

To name a few examples: