The Bill pertaining to the introduction of a right of the Works Council of public limited companies (NVs) to express its position on proposed shareholders’ resolutions regarding important management decisions, the appointment, suspension and dismissal of Members of the Management Board and of the Supervisory Board, as well the remuneration policy, was passed by the Upper Chamber on Tuesday, 29 June 2010. The legislative amendments pursuant to this Bill entered into force on 1 July 2010. The Bill provides for a transitional arrangement however, the right and rules implemented by the Bill will not apply to any shareholders’ meeting held within ninety days of such date.

The Bill provides for a right for a statutory Works Council of a public company (naamloze vennootschap or N.V.), to express its position with regard to a number of specific decisions of the General Meeting of Shareholders. This right also comes to any statutory Works Council of a subsidiary of such N.V., provided that the majority of the employees employed by the company and its group are employed within the Netherlands. The Works Council is to be enabled to express its position timely for them to be considered by shareholders determining their voting behaviour on the proposals concerned. The position must therefore be made available to the shareholders simultaneously with the agenda holding the proposals concerned. In addition, the Works Council has the right to orally explain the position it has taken at the General Meeting.

The proposals concerned are (i) approval of important management decisions within the meaning of section 2:107a of the Netherlands Civil Code (‘DCC’); (ii) adoption and adjustment of the remuneration policy; and (iii) the appointment, suspension and dismissal of Members of the Management Board and members of the Supervisory board. If the large company regime applies to the company concerned, the Works Council will also be entitled to express its position on nominations for the appointment of Members of the Supervisory Board (Section 2:158 lid 4 DCC).

The Bill confers a supplementary right on the Works Council, in addition to the current right to consultation the Works Council has on the basis of Sections 25 and 30 of the Works Councils Act (Wet op de ondernemingsraden or ‘WOR’).

The aim of conferring these new rights on the Works Councils is, amongst others, to involve employees more closely in determining views and positions on income and income ratios within the enterprise. It is expected that the dialogue, the internal support thereby created and the necessity that all those involved in the decision-making are availed of the correct information, each in itself and in correlation, will constitute reason for the company to comply with the rules proposed in the Bill.

The Bill determines that the lack of a position taken by the Works Council does not affect the decision-making on the proposed decision. Furthermore, the Bill does not impose sanctions on non-compliance with these new rules.

The Bill provides for a transitional arrangement. When this legislation enters into effect, the rights conferred on the Works Council cannot be exercised with regard to General Meetings which are to be held within ninety days of the entering into force of the legislation.