Collective bargaining in Netherlands

The dominant bargaining level in the Netherlands is the sectoral level, with many large firms having their own company agreement. According to the Institutional Characteristics of Trade Unions, Wage Setting, State Intervention and Social Pacts (ICTWSS) database (OECD and AIAS, 2021), coverage in 2008–2010 stood at around 84%. There are no collective agreements for the public sector as a whole. There are, however, 15 subsectoral collective agreements (covering areas such as central government, regional government, municipal government, defence and the police).

Many sectoral agreements are declared generally binding by the Ministry of Social Affairs and Employment for all firms in the sector. More and more, sectoral agreements can be considered framework agreements, which are then further elaborated on and implemented at enterprise level (either by unions or by works councils). As a rule, after the expiry of a collective labour agreement, the content remains in force if there is no new agreement for employees and employers who are members of the trade union or employer organisation that signed the agreement. The agreement is, however, no longer universally binding for the sector if it has expired, and while enterprises are in principle free to deviate from agreements it is unclear to what degree that happens in practice.

Since the COVID-19 crisis started in early 2020, far fewer collective labour agreements have been negotiated. Many of those agreements that were made and that came into force in 2020 had been negotiated in 2019 to start in 2020. Some collective labour agreements were frozen for 2020, with unions and employers agreeing to maintain the provisions of the officially expired collective labour agreement.

In the table below, the figures from the European Company Survey show the coverage of employees at all levels, with 79% overall bargaining coverage in 2013. The figures from the Ministry of Social Affairs and Employment in the second column are similar for overall bargaining coverage, but show a different picture at sectoral level, which is dominant in the Netherlands. This is partly due to the collective agreement extension mechanism, which adds some 13 percentage points to the sectoral level. It should also be noted that a different methodology is used by each source (the European Company Survey allows for multiple responses, while the national source only allows for a single response), making a direct comparison between different levels difficult.

Collective wage bargaining coverage of employees

Note: n.a., not available.

Sources: Eurofound, European Company Survey 2013/2019 (including private sector companies with establishments with more than 10 employees (NACE codes B–S), the question in the survey was a multiple choice question and multiple responses were possible); Eurostat [earn_ses10_01], [earn_ses14_01], [earn_ses18_01] (including companies with more than 10 employees (NACE codes B–S, excluding O), with a single response for each local unit; OECD and AIAS, 2021; CBS, 2022a.

The main recent trend in collective bargaining is the increase in the duration of bargaining rounds. Negotiations have become more difficult and therefore protracted. Sometimes there is a long period between the expiry of an agreement and the starting date of the new agreement. Another recently relevant issue is the negotiation of agreements that have not been signed by the FNV. However, these trends have not resulted in drastic changes in overall coverage, with figures decreasing only slightly between 2014 and 2021 (CBS, 2022a) What should be kept in mind is the growing proportion of self-employed people, who are not covered by agreements.

In the Netherlands, laws regulate the basic circumstances of working life, and collective labour agreements can build on these provisions. Laws on working time and minimum wages exist, and these must be upheld as a minimum requirement in sectoral agreements. The sectoral level is dominant in the Netherlands, but many large companies have company-level agreements.

Levels of collective bargaining, 2022

Articulation

At national level, the social partners may make recommendations to the affiliated bargaining parties, but this is increasingly less important. Links may exist between sectoral level and company level, and sectoral agreements increasingly have the character of framework agreements that leave some scope for deviation and elaboration at company level, especially regarding working time.

Traditionally, bargaining took place in the first months of the year. However, there is really no ‘usual’ pattern any more.

As the majority of social dialogue takes place at sectoral level, there is not much central coordination. As such, coordination is relatively weak in the Netherlands. The federations may issue recommendations, but these are not binding. Employers are demanding less coordination, asking the unions to take more account of differences across sectors and companies. There is no pattern bargaining, although traditionally some agreements (such as those in the metal sector) are considered to be more important (trendsetting) than others.

Sectoral collective agreements may be declared generally binding for a maximum of two years, or five years if they regulate joint funds (say, for pensions or training). Only certain types of provision may be made generally binding. A distinction is made between ‘normative’ (or substantive) clauses and ‘obligation’ (or procedural) clauses in collective agreements. Normative clauses regulate issues such as pay, working hours and other terms and conditions of employment, and may be extended by the Minister for Social Affairs and Employment to cover all employers and employees in the sector concerned, whether or not they are members of one of the signatory parties. Obligation clauses set out the mutual rights and obligations of the contracting parties in relation to the implementation of an agreement and may not be made generally binding.

Some companies voluntarily follow sectoral agreements, without being bound by those agreements.

When a collective labour agreement comes to an end and it had been declared universally or generally binding, only the signatory parties must still adhere to the clauses until a new agreement is made. Other workers and employers in the sector may, in principle, deviate from the provisions until a new agreement is developed.

Most agreements contain clauses permitting derogation in a general sense: firms can ask the parties to the agreement for dispensation. This used to happen only very rarely, but the use of this mechanism seems to have increased since the COVID-19 pandemic. There are, however, no figures on the prevalence of this form of derogation. In the case of extension, firms can ask the Ministry of Social Affairs and Employment for dispensation. This is not very common, and the ministry is rather restrictive in issuing exceptions.

As a general rule regarding derogation from collective labour agreements, employers may deviate from a collective labour agreement if derogating is somehow more favourable for one or more employees. Deviations from collective labour agreements that disadvantage one or more employees are not considered valid (De Unie, undated).

After expiry, collective agreements remain in force, but formally only for the signatory parties. For the non-signatory parties, extended agreements expire in principle. In practice, all parties stick to the agreement until a new one enters into force. This has become more important in recent years, as the negotiation process has become more difficult and time-consuming since the crisis. In several cases, there have been delays of up to two years.

Peace clauses in collective agreements exist in the Netherlands, but there is no quantitative information on them. See the section ‘Legal aspects’.

In the Netherlands, peace clauses (vredesplicht) in collective labour agreements tend to centre on the fact that while a collective labour agreement is in place employees should not take disruptive action towards their employer. This includes, for example, holding strikes.

There are hundreds of active sectoral collective labour agreements in the Netherlands. In an examination of agreements from three sectors as a sample, there was no mention of peace clauses explicitly. It appears that these clauses are not very prevalent in the Netherlands. A reason for this may be that it is common practice not to strike during the period of validity of a collective labour agreement.

The Ministry of Social Affairs and Employment maintains an overview of collective labour agreements active in the Netherlands. In addition to wages and working time, it addresses other subjects that are of importance in the agreements. These include:

• pay during sickness and unemployment, including the extent to which collective agreements contain provisions on pay on top of the statutory minimum benefits, which is especially important in the case of sickness and disability; the employer pays at least 70% of the wage during the first two years of sickness, but in many agreements this level is increased to 100% during the first year

• employability and lifelong learning

• variable pay

• the lowest wage scales

• fixed-term contracts

Some of the most publicised strikes throughout 2017 and 2018 were held over work pressure and remuneration. In the public transport sector, and for police, postal workers and primary school teachers, work pressure in relation to pay was a key theme. This trend continued in 2019, leading to large-scale strikes in the healthcare sector (specifically involving nurses and care workers), and for teachers and trainers in primary and secondary education.