Social plan and the role of the Works Council
Developing a Social Plan: clear, careful, and workable
A social plan plays a crucial role in reorganizations, mergers, and other major organizational changes. It determines how employees are supported and compensated, while also directly affecting the feasibility and continuity of the organization. For this reason, a social plan requires careful decision-making and clear agreements.
CouncilWorks supports works councils and organizations in drafting, reviewing, and guiding the development of social plans. Our focus goes beyond legal frameworks alone, addressing how a social plan contributes to support, trust, and the effective functioning of the organization.
Contact us without obligation for support in negotiating, drafting, or reviewing a social plan
What is a social plan and what does it Include?
A social plan is a written agreement that sets out how the consequences of a reorganization or other organizational change will be addressed for employees. It provides clarity and stability during a period of uncertainty and contributes to calm and continuity within the organization.
A social plan typically includes agreements on:
- Supporting employees in finding alternative employment
- Redeployment and internal mobility
- Severance payments and departure arrangements
- Training and retraining opportunities
- Income protection and transitional arrangements
- Duration and scope of the social plan
A well-designed social plan is more than a collection of measures. It supports careful implementation of change and contributes to decisions that are workable and sustainable in the long term.
What requirements does the WOR set for a social plan?
The Dutch Works Councils Act (WOR) does not prescribe exactly what a social plan must contain, but it does set clear requirements regarding the involvement of the works council. In particular, where arrangements affect employment conditions or personnel policies, the works council’s consent rights may apply.
Under the WOR, it is important that:
When trade unions are not involved in negotiating a social plan, the works council assumes a more prominent role. In such cases, the works council is involved not only in decision making but also in negotiating substantive terms of the social plan, including compensation levels and arrangements. In this situation, it is essential that the works council is well prepared and involved early in the process.
For an independent explanation of the legal position of the works council in social arrangements, we also refer to information provided by the Social and Economic Council of the Netherlands (SER).
What Is the role of the Works Council in a social plan?
The role of the works council in a social plan depends on the context in which the plan is developed. When trade unions negotiate the social plan, the works council typically has a reviewing and complementary role. When trade unions are not involved, the works council takes on a more active and substantive role in the process.
The works council:
- Assesses whether the social plan is balanced and carefully designed
- Evaluates the impact on different groups of employees
- Negotiates substantive terms and compensation arrangements
- Asks critical questions about choices, conditions, and alternatives
- Safeguards transparency, feasibility, and consistency
- Contributes to support for decisions and the effective functioning of the organization
By being involved early in the process, the works council can exert meaningful influence on the content of the social plan and avoid being confronted with finalized decisions at a late stage.
Frequently asked questions about social plans
No, not always. The works council has consent rights only for those elements of a social plan that include arrangements falling under Article 27 of the Dutch Works Councils Act (WOR). Whether this applies depends on the content of the social plan and on whether trade unions are involved in negotiating the plan.
When trade unions are not involved in negotiating a social plan, the works council plays a central role. In such cases, the works council negotiates the terms, arrangements, and compensation levels, in addition to assessing the care, feasibility, and practicality of the plan.
Yes. When trade unions are not negotiating the social plan, the works council may — and in practice must — negotiate the content of the social plan. This takes place within the framework of the WOR and requires careful preparation, clear agreements, and appropriate expertise.
Formally, the works council must be involved once a decision is being formally considered. For meaningful influence, however, it is advisable to involve the works council early in the process, when starting points and key choices are still open for discussion.
Seek advice on reviewing or negotiating a social plan
A social plan requires substantive expertise, careful consideration, and attention to both employee interests and the functioning of the organization. CouncilWorks supports works councils in reviewing social plans and guiding negotiation processes.
Would you like to ensure that your social plan is developed carefully and supported across the organization? Request advice today on reviewing or negotiating a social plan and discover how CouncilWorks can support your organization.