22 Jun 20263 min read
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Works councils and other employee representative bodies can play a significant role in introducing pay transparency within organisations.
The Pay Transparency Directive directly affects topics where employee participation has traditionally held a strong position. Consider, for example:
As a result, many organisations will not be able to bypass the works council when implementing new processes or policies relating to pay transparency. The works council has significant statutory rights when it comes to establishing or amending these topics.
Although Dutch implementing legislation is still to follow, in practice we see that works councils are already raising questions about pay differences, transparency and objective remuneration criteria. This is logical. Employees are becoming increasingly aware of their rights, and societal attention to equal pay continues to grow.
Employers who only take action once questions from the works council arise run the risk of a reactive implementation carried out under time pressure. The reverse also applies: if, as an employer, you need to start working on your HR processes but do not yet have a works council or another form of employee participation in place, you will also need to address this immediately.
Not every organisation has a works council. In the Netherlands, a works council is mandatory from 50 employees. However, this does not mean that smaller organisations do not need to consider employee participation in relation to pay transparency.
Personnel representatives or other employee representative bodies can also play a role in matters such as employment conditions, remuneration policy and transparency.
Employers would therefore be wise not only to consider whether there is a works council, but also to look more broadly at which employee representation is active within the organisation and which rights apply to it.
Many organisations focus primarily on the legal question of whether they will comply with the law. However, it is at least as important to consider whether pay differences can be properly explained internally.
Once employees gain greater insight into salaries and remuneration criteria, more discussion about existing differences often arises. This is precisely why it can be valuable to involve works councils or other employee representatives at an early stage in the preparation.
For many organisations, the Pay Transparency Directive is not only a legal obligation, but also a reason to take a critical look at existing HR processes and governance.
Are roles logically structured? Are differences explainable? Are exceptions properly documented? And are processes designed in a sufficiently objective manner?
Organisations that start working on this now often have more control over the implementation process later and face less risk of discussions afterwards.
Would you like to discuss these insights further? Please get in touch with us.
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