In a significant ruling, the Dutch Supreme Court has declared that works councils (a works council is a support structure within a business that is built to protect and promote an employee’s position in the company) in the Netherlands possess an advisory right concerning decisions to hire temporary workers on a group basis. This ruling extends to both routine hiring practices and one-time occurrences, impacting companies employing temporary staff. The decision encompasses hirers utilising platforms or Employer of Record (EOR) services for temporary workforce provision.

The case at the forefront involves the online division of Dutch supermarket giant Albert Heijn (AH). Notably, around 90% of AH’s 9,500 temporary workers are engaged in fulfilling online orders. AH periodically conducts tender processes with employment agencies, establishing framework agreements that delineate terms for hired workers. The dispute centres on whether the works council holds an advisory right concerning these framework agreements.

Works councils may advocate for a specific percentage of permanent employees and assess the effectiveness of such policies during contract renewals.

Initially, the Enterprise Chamber of the Amsterdam High Court held the view that the advisory right is applicable only in cases deviating from standard hiring practices. However, the Supreme Court took a contrasting stance, asserting that the works council possesses advisory rights regardless of adherence to standard practices. This ruling significantly enhances the works council’s influence over hiring policies, enabling them to impact workforce composition, including the proportion of temporary workers. Consequently, works councils may advocate for a specific percentage of permanent employees and assess the effectiveness of such policies during contract renewals.

Fiona Coombe, Director of Legal and Regulatory Research, commented, “While not hindering companies from hiring temporary workers, the ruling might introduce delays to the tender process and influence decisions on the extent of temporary workforce utilisation.”

Law firm Osborne Clarke emphasised, “The decision underscores the importance of involving the works council in decisions related to the group hiring of temporary workers. In the Netherlands, the works council’s advisory process is a crucial step for various decision types, as illustrated in this case.”