Subdistrict Court of Amsterdam, 14 November 2011, JAR 2011/302

The Facts

Employment contracts between Telegraaf Media Groep N.V. ('TMG') and its employees are governed by various collective labor agreements ('CAOs'), including the CAO Grafimedia. This CAO provides for a stratified structure of labor negotiations, which allows for binding agreements to be made on a decentralized level about giving substance to provisions from the CAO, for example in the field of the new remuneration system to be introduced.

TMG wished to make further arrangements with regard to excessive salaries, and invited the Central Works Council (Centrale Ondernemingsraad, 'COR') to talks about this. The COR asked the trade unions whether they wished to have these talks with TMG. When the trade unions declined this request, the COR began talks with TMG. The COR and TMG then concluded an agreement to adjust the salary structure, which caused the salaries of a great number of employees to be frozen ('the Agreement').

Was the COR really authorized?

Next, the trade unions took the position that the Agreement was null and void, because the COR did not have the power to enter into such agreements. Furthermore, the trade unions thought that the Agreement had not been implemented on time, and that at least 51% of the COR's rank and file should have agreed to the Agreement.

The trade unions then brought an action before the Subdistrict Court of Amsterdam, claiming (among other things) a declaratory judgment that the Agreement had not been concluded in the prescribed manner and was therefore null and void.

Both the COR and the Works Council of the business unit the Agreement relates to wished to join the proceedings between TMG and the trade unions; the COR on the part of TMG and the Works Council on the part of the trade unions. On 23 May 2011 the Subdistrict Court rendered a judgment in the motion for a joinder, and allowed both the COR and the Works Council to join the proceedings. I refer to my contribution to this newsletter of September 2011 for an explanation to the judgment of 23 May 2011.

Judgment of 14 November 2011

In a judgment dated 14 November 2011, the Subdistrict Court decided on the claims in the main action. The Subdistrict Court considered that it is true that the trade union is the primary party to make agreements about collective employment conditions, which means that the COR does not have the power to enter into CAOs. Therefore, in principle, agreements between the COR and the employer are not directly binding on the employees. However, this may be different if - as in the present case - the trade unions have agreed in the CAO that certain topics may be elaborated further on a decentralized level in an agreement between employer and COR. In that case, the trade unions use their power to create the option on a decentralized level of giving further substance to agreements made. This is especially so if it has been agreed explicitly that these decentralized agreements will be binding on the employer and the employees. With this argumentation the Subdistrict Court rejected the argument of the trade unions that the Agreement would not be binding. It also rejected the other arguments of the trade unions (regarding the promptness of implementation and the 51%).

Tips

  • Agreements in the field of collective employment conditions are within the domain of the trade unions. The starting point is that agreements between an employer and the Works Council are not reflected in the individual employment contracts of employees. For this reason, the Works Council in principle has no part in the creation and/or amendment of employment conditions.
  • The judgment discussed above shows that this may be different if a specific power is delegated to the Works Council in the CAO.
  • The judgment is relevant, because more and more CAOs contain provisions that can or should be further elaborated on a corporate level.
  • Incidentally, some authors take the position that agreements on a delegated level are not binding on employees who are trade union members.
  • Parties to a CAO may choose to set further conditions on the creation of decentralized agreements. In the case discussed above, the parties to a CAO could, for example, have set the condition that the agreements on a decentralized level had to be supported by a 51% majority.

First published in the Kennedy Van der Laan newsletter - February 2012

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