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The : EIRO annual review 2008

Grünell, M.

Publication date 2010 Document Version Final published version Published in EIROnline: European industrial relations observatory on-line

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Citation for published version (APA): Grünell, M. (2010). The Netherlands: EIRO annual review 2008. EIROnline: European industrial relations observatory on-line, 19-02-2010, NL0903029Q. http://www.eurofound.europa.eu/eiro/studies/tn0903029s/nl0903029q.htm

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About this The Netherlands: EIRO Annual Review 2008 document ID: NL0903029Q In the first half of 2008 the relationship between government and social partners was frosty. The Author: Marianne Grünell entwining of two issues – labour participation and dismissal law – held all parties in a strangling hold. Eventually agreement was reached on a new activating policy on unemployment, with the Institution: HSI issue of dismissal law being delegated to a research committee. In the recovering economy it was Country: Netherlands possible to have higher wage demands and since at the beginning of 2008 it was espected to have Language: EN labour scarcity, employer associations called for responsible wage development but finally higher Publication date: 19-02- wages demand were met in agreements. The improved relationship among social partners and the 2010 joint initiatives were being further developed when the financial crisis hit the Netherlands in August. As the crisis turned into an economic recession, priorities have changed in keeping companies afloat and employees at work. Government and social partners have now somewhat Related Links closed ranks to cope with the effects of the crisis. Netherlands: country 1. Political developments profile

The government in office during 2008 consisted of three parties. For the fourth consecutive term, the new coalition includes the Christian Democratic Appeal (Christen Democratisch Appel, CDA) which with 41 seats presents the biggest party in the Dutch House of Representatives. Both the Labour Party (Partij van de Arbeid, PvdA) with 32 seats and the Christian Union (Christen Unie, CU) with 6 seats are new in government and accountable for the more left character of government’s policy. Mr of the CDA served once again as Prime Minister (NL0612019I).

The entwining of two issues – labour participation and dismissal law - presented a strangling string for both government and social partners, in 2007 and in 2008 (NL0701039I). The Minister of Social Affairs and Employment, , had to compromise. In December 2007 the policy to create new jobs, with wage subsidies for employers, has been actualised without solving the issue of dismissal law. The issue of dismissal law was postponed and delegated to a research committee, the so-called Bakker Committee (NL0807019I).

In the spring of 2008 the Minister of Social Affairs and the social partners looked for solutions to the impending economic recession. Increased labour market participation was a central issue. The minister called for support from the social partners in keeping older employees – driven by the incentive of a bonus – working for longer, even after retirement age. The social partners first wanted the increase in value added tax (VAT) to be postponed and the spending power of the county’s citizens to be safeguarded. (NL0807039I)

The financial crisis hit the Netherlands in August 2008. The economic crisis that followed brought the government and social partners closer together. The traditional autumn consultation between the Dutch cabinet and social partners concluded satisfactorily at the start of October 2008. Agreement was reached on moderate wage demands, scrapping unemployment premiums, and earmarking millions to retain the spending power of people suffering from chronic illnesses and minimum-wage earners. Even the social partners’ interim agreement on dismissal law was accepted (NL0901029I). Agreements were also reached on helping to find jobs for no less than 200,000 people in a weak position in the labour market and on education and training. Before starting the consultation, the respective parties attached great importance to reaching consensus for the outside world, especially given the degree of turbulence in today’s financial markets (NL0810019I).

There were no general or regional/local elections planned in 2008

2. Collective bargaining developments

In comparison to 2007 no significant changes took place with respect to the level of concluded collective agreements (primarily sectoral).

Pay

The largest unions, the Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV), the Christian Trade Union Federation (Christelijk Nationaal Vakverbond, CNV) and the Federation of

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Managerial and Professional Staff Unions (Middelbaar en Hoger Personeel, MHP) remained of the opinion that in the recovering economy higher wage demands were possible, with a minimum of 3% increase. Since labour scarcity was expected in the beginning of 2008 the umbrella employer association VNO-NCW stressed responsible wage development.

Collectively agreed wages have risen more sharply in 2008 than in 2007. According to the 2008 Autumn Report on Collective Bargaining (Ministry of Social Affairs, Najaarsrapportage cao- afspraken 2008), covering 94% of employees, collectively agreed wages have risen by an average of 3,2% in 2008. Employees received no more than a 2% rise in 2007 (NL0807029I). In many sectors – education, hospitals, police, transport or light engeneering industry – agreements cover a two to three year period. A good example stems from the education sector.

A collective labour agreement emerged for the education sector in mid-April 2008 following far- reaching concessions made by the Minister of Education, . Dissatisfaction is rife amongst teachers. There is also a looming shortage of teachers. It is hoped that the collective agreement will resolve these issues. Despite fears that the agreed employment conditions will do little to resolve the shortage of teachers, the negotiating parties were pleased with the outcome. The collective bargaining agreement has been approved by the unions’ membership base. Over and above the customary collectively agreed increases, teaching staff across the board will gain 5% to 10% in the years ahead. Teachers will more quickly reach their maximum earning. (NL0804059I)

Working time

The 36-hour working week remained the norm and the average collectively agreed normal working week is 37 hours. However, trough the Working Time Act the legal space and the actual pressure of employers to extend the working week has increased.

There were no significant actions around working time during 2008.

Training and skills

According to the 2008 Spring Report on Collective Bargaining (Ministry of Social Affairs, Voorjaarsrapportage cao-afspraken 2008), training provisions are included in nearly all collective agreements. In fact, the issues training and training leave have become common subjects in agreements during the period 2000–2006. In the context of employability, agreements have increased on vocational training, individual developmentplans and performance interviews. This social partner consensus on the importance of training has continued during 2008. Training has become more and more central to combat unemployment. At national level, government and social partners agreed on education and training in the context of helping to find jobs for no less than 200,000 people in a weak position in the labour market.

Job security

The Bakker Committee, assigned by the Dutch cabinet to resolve the deadlock reached surrounding dismissal law, issued its recommendations in June 2008. The recommendations significantly redefine the importance of changes to dismissal law. The Bakker Committee takes current labour market trends into account and highlights potential labour market scarcity in the future. This calls for every possible (policy) measure to be adopted in a bid to get more people working and to keep them working for longer. While dismissal law is marginal in this respect, employee flexibility is a key factor. Minister Piet Hein Donner of Social Affairs responded positively to the report, as did the social partners, although they are critical concerning a number of points. Employers are against having to assume too much responsibility for getting their older employees back to work. Employees oppose cutbacks in relation to unemployment benefits and raising the retirement age from 65 to 67 (NL0807019I). The report, although received with approval, has become less important at the moment the top of the social partners reached an own agreement on dismissal law.

Elder workers

It appears from the 2008 Working for Longer in Perspective (Ministry of Social Affairs, Perspectief op langer doorwerken 2008) collective agreement inventory, that the number of extra days off is being reduced gradually for older employees. This arrangement ties in with the policy of the Minister of Social Affairs to urge the social partners to do away with policy geared towards sparing older employees, so that these costs can no longer be used as a ground against older employees. Additionally, more employees will this year be given an opportunity to continue working after having turned 65. In 2006, only one in four had been given such an opportunity – the ratio now is one in three (NL0807029I).

Equal opportunities and diversity issues

Women

In the Netherlands the wage gap is among the highest in Europe. In 2008, Dutch women still earn far less than their male counterparts. With a wage gap of 18% in 2006, the Netherlands tops the European average, according to a report by the International Trade Union Confederation (ITUC).

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The additional disadvantage experienced by Dutch women can to a large extent be explained by the fact that Dutch women often work part time. Not only part-time workers often forfeit bonuses, but they are also less likely to be considered for retraining and tend to miss opportunities for further growth and promotion. Relatively fewer women can be found at the higher echelons of the business community. Government’s establishment of the Part-Time Plus Taskforce is intended to contribute towards achieving the target set by cabinet of 80% of women in employment by 2016; in 2006 this was 56%. Large-scale part-time jobs fall within the scope of this objective. (NL0804029I)

The Labour Party and the FNV union federation have in 2008 called for private sector management quota for women. In April 2008, Labour Party representatives have presented an initiative legislative proposal in the Dutch House of Representatives to statutorily establish a quota system for the number of women in management positions in the private sector. The parliamentary group will be compelled to take such steps if the Frijns Committee – that evaluates policy on management executives and remuneration on an annual basis; see 2. – does not itself propose targets in this respect. Although the representatives still support self-regulation in the business community, they expect little more to be achieved in this respect. In fact, they would like to see the Dutch Corporate Governance Code (also known as the Tabaksblat Code) supplemented by provisions governing efforts to appoint more women to positions on management and supervisory boards. The FNV trade union federation backs the Labour Party. However, the largest government party, the Christian Democratic Appeal is opposed to a quota system, as is the VNO-NCW employers’ organisation. (NL0804049I)

Immigrant workers

The number of employees working through mala fide temporary employment agencies has risen within the space of two years from 2006. While in 2006, the figure was 80,000, in 2008 this practice involves around 150,000 people annually. More than half the number temporary workers from Eastern Europe working in the Netherlands do so through mala fide employment agencies. The problems they face include being underpaid and living in poor conditions, and their employers often commit wage tax fraud. This largely concerns Polish employees who have been allowed to work in the Netherlands without a work permit since May 2007 (NL0711019I). Investigations into mala fide temporary employment agencies are carried out by supervisory agency SNCU together with the Labour Inspectorate (Ministry of Social Affairs). Fines amounting to €2.6 million have already been dished out since 2006. The Ministry of Social Affairs has now submitted a legislative proposal directed at holding companies that hire in temps through mala fide agencies liable for non-paid-out wages (NL0810029I).

In 2008 the Labour Inspectorate of the Ministry of Social Affairs has planned to intensify its checks on irregularities in the treatment of Polish employees and employees from other countries in Central and Eastern Europe in 2008. The Minister of Social Affairs, Piet Hein Donner, made this commitment to the House of Representatives in December 2007. The Labour Inspectorate plans to carry out additional inspections into possible cases of underpayment, overly long working hours and poor working conditions. The Labour Inspectorate will for the first time be dishing out fines to companies that pay minimum wages but make their employees work overly long hours. In December 2007, the Dutch House of Representatives decided that the Minister of Social Affairs must first resolve matters surrounding Polish workers before discussions could be initiated on granting Romanian and Bulgarian employees further access to the labour market (NL0802059I).

3. Legislative developments

Top salaries

The Frijns Committee issued in its third annual report (December 2007) recommendations on policy concerning top salaries. The committee appears to be hanging on to self-regulation and again spoke out against legislation. The committee believes that self-regulation is sufficient to prevent excessive remuneration at the top. Companies must clarify the maximum salaries to be received by chief executives on their appointment. In debating the issue of self-enrichment at the top in the Dutch House of Representatives, the Minister of Finance, Mr , repeatedly referred to the report’s findings on which basis he plans to formulate policy. It now appears the minister plans to uphold his original intention of addressing excessive remuneration using tax measures (NL0802049I).

Youth

From 2008, young people under the age of 27 years are no longer eligible to receive social security benefits, but must instead work, study or combine the two activities. Up until the end of 2007, young people aged between 18 and 27 years could apply for benefits. At the end of April 2007, some 29,000 young people aged under 27 years received benefits, 4,275 of whom were under the age of 21 years. The new measure will only apply to young people who actually register at their local authority, although registration is not compulsory. The youth wing of the FNV, called FNV Jong, is highly critical of the new measure (NL0802019I).

Disabled youth

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The cabinet proposal to lower benefits for disabled youth has been viewed critically. In May 2008, the Minister of Social Affairs & Employment, Piet-Hein Donner, put forward a proposal to discontinue paying out benefits of 75% of the minimum wage to young people with a disability who are capable of working with effect from 2010. They should be given suitable employment, supplemented to 70% of the minimum wage. The minister based his proposal on a report published by the Central Planning Office (Centraal Planbureau, CPB) on the increasing number of disabled youth seeking recourse to benefits. The minister’s proposal invited harsh criticism from left-wing supporters in the Dutch House of Representatives, including the ruling Labour Party. The unions also expressed concerns, referring to the spring consultations in which cabinet, employers and employees in fact reached explicit agreement on creating more jobs for young people with a disability (NL084069I).

4. Organisation and role of the social partners

During 2008 no major changes took place in the organisation and role of the social partners. There were no mergers or a change in social dialogue structure. Membership levels and representativeness did not change significantly.

5. Industrial action

In 2007 in 20 disputes 26.400 labour days were lost. 20.700 Employees were involved in these strikes (Central Bureau for Statistics). Compared to 2006 there have been less disputes (20 to 31), but more labour days have been lost (around 10.000 more than in 2007). For 2008 these figures are not yet available. In 2008 there was one significant dispute in the police force.

Courts showed to be divided on the right of the police to strike within the scope of collective bargaining. February 2008 was preceded by months of negotiation between the police force and the Minister of Internal Affairs, Mrs , on the new collective labour agreement. The police unions began threatening industrial action and strikes in December 2007. The courts were divided, with some ruling out strikes as a means of industrial action and others condoning such steps (NL0802039I). The police continued their actions; while an investigating committee had been established to assess how much leway for negotiation existed between the two parties. In the end the unions agreed with the final collective-bargaining offer tabled by Minister Guusje ter Horst of Internal Affairs at the end of March 2008. Having mustered membership support to reject earlier proposals, the unions begrudgingly accepted the minister’s latest proposal.The minister made an overall three-year wage offer of around 12%: 10.25% structural and close to 2% on a one-off basis.

There were no changes to the regulatory environment, the law on strikes or dispute resolution in 2008.

6. Restructuring

Apart from restructuring due to the credit crisis and the recession, in 2008, major restructuring was announced at the former state-owned companies TNT (postal sector, 1850 jobs) and KPN (telecommunications sector, 4500 jobs). At ABNAmro, 900 jobs were lost of the takeover by an international consortium of three banks. The remaining restructuring announcements (all in the range from 100 to 500 jobs) were due to a few bankruptcies and for the rest mainly to internal restructuring. In many cases, there were no massive lay-offs, mainly due to the tight labour market.

7. Impact of financial and economic problems

The financial crisis hit the Netherlands in August 2008. The economic crisis that followed brought the government and social partners closer together. Aside from government’s bank takeovers, saving thousands of jobs, it is important in the area of labour relations to note that the Minister of Social Affairs, Mr Piet Hein Donner, granted permission for companies to temporarily ‘park’ employees under the Unemployment Insurance Act (Dutch acronym: WW) for some of their working hours. In November 2008 companies including Nedcar and Corus made immediate use of the arrangement. The social partners were grateful for the arrangement and in December pushed for it to be extended in 2009. They also put forward supplementary arrangements of their own. For example, unemployed employees should be obliged to continue training. Job-finding assistance must be better and intervention sooner. Opportunities for business credit must be expanded. Also, it may be possible for government projects to be shifted forward, so that construction companies do not find themselves with an empty order book. The parties also hope to see permit application procedures relaxed, facilitating swifter project implementation. The FNV trade union federation will supplement the list with its own ten-point programme, emphasising that with rising unemployment it is vital to invest heavily in people and a sustainable economy. In December, government broke taboo and, for the first time, used the ‘R’ word: recession.

Marianne Grünell, HSI

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