Self-employed people without employees seek place in social partner consultation

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In 1999, the number of interest groups representing self-employed people without employees in the Netherlands has rapidly grown, while some trade unions affiliated to the FNV confederation now also include these individuals as a target group for recruitment. The increase in self-employment without staff stems from the healthy economic situation, diminished social security for employees and perceived greater opportunities for people to apply their talents in a self-employed capacity. Whether the current trend will continue in the future remains to be seen.

In 1999, the number of interest groups representing self-employed people without employees - denoted using the Dutch acronym ZZP, for zelfstandigen zonder personeel- has multiplied rapidly. The latest ZZP lobby is the Dutch Small Business Association (Vereniging Kleinbedrijf Nederland, KBN). KBN aims to establish a place for self-employed people without staff alongside employers and trade unions in consultations with the central government. According to KBN, a small business is fundamentally different from groups represented by employers' associations and trade unions. "By definition, entrepreneurs face limitations and rules are to their disadvantage," according to KBN chair CMA Bosman, who called for tax and social security reforms to provide more equitable treatment for ZZPs.

Another recently formed interest group is the ZZP Association (Vereniging voor Zelfstandigen zonder Personnel, VZzP) which focuses on the construction sector. VZzP offers products and services including employment placement services, general legal advice, mediation in the collection of bad debts and local information and contact meetings.

The interest groups IT-United and VONIT represent self-employed individuals in the information technology (IT) sector, whom the various social security administration agencies do not regard as self-employed in all cases. Consequently, these interest groups' main goal is to establish the legal status of self-employed IT workers in the basis of criteria drawn up in advance. These groups place less emphasis on offering products and services to members.

Position taken by the trade unions

A number of trade unions within the Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV) are also actively recruiting ZZPs. Although the Dutch Journalists' Association (Nederlandse Vereniging voor Journalisten, NVJ) and the Hair Stylists' Union (Kappersbond) have made a case for freelancers for years, a decision was made only relatively recently within the Building and Woodworkers' Union (Bouw- en Houtbond) and Allied Unions (FNV Bondgenoten) to adopt the ZZP cause. The Building and Woodworkers' Union previously viewed ZZPs, who are not the employed workers for whom trade unions were created, as hostile to unions and as unfair competitors to employees. In the past, member opposition often derailed union leaders' efforts to recruit the self-employed. However, plans have now been made to investigate options to attract ZZPs to the union. This change of heart is mainly attributed to today's perception of ZZPs, namely as employed workers in disguise who "only hire out labour, but use the customer's materials". In the meantime, the Allied Unions have set up a separate association for self-employed people. Previously, the former Transport Union (Vervoersbond), since absorbed by the Allied Unions, was the only union catering to ZZPs, with the formation in 1997 of a linked association. Now, an Allied Unions leader has announced that a great deal of work must be done, given that "contracts are frequently unsound for the self-employed, who have become the new group of 'legally powerless' people on the labour market."

Not all unions are keen on defending the interests of the self-employed. The growth in the number of companies providing employment placement services to "free-agent" nurses and care providers running their own one-person businesses prompted the AbvaKabo civil servants' union, affiliated to the FNV, to contemplate its role in this area. The principal viewpoint is still that "we must not participate, as it only leads to undermining the collective agreement." Hout- en Bouwbond CNV, the building and woodworkers' union affiliated to the Christian Trade Union Federation (Christelijk Nationaal Vakverbond, CNV), has adopted the same reason for barring ZZP membership. "The consensus was that self-employed individuals are not true employees and create competition for our members in the labour market," according to a spokesperson, who claimed that "they do not have a problem with working longer hours than established in the collective agreement, and you never know what they will do in the event of a strike. Plus, they weaken the foundation for collective arrangements such as early retirement and pensions." However, he added that "many ZZPs were forced to go into business for themselves, otherwise they would remain unemployed. Moreover, they do not really fit the description of entrepreneur because they do not employ any personnel. All in all, they fall into a category that comes awfully close to employee."

ZZP numbers continue to increase

Self-employed individuals are riding the current favourable economic wave, and their numbers continue to increase, especially in the IT, transportation and construction sectors. At present, 25,000 ZZPs work in the construction and related branch (5,000 of whom have joined the ranks since 1996), 10,000 in transportation and 62,000 in the business service industry (7,000 added since 1996), according to figures from the Federation of Small and Medium-Sized Businesses (Midden en Klein Bedrijf, MKB). The total number of self-employed people, including ZZPs, increased by 100,000 from 1992 to 1997, when it stood at 945,000. This represents 13% of all jobs in the Netherlands.

The growth in self-employment is not simply a matter of supply and demand or scarcity in the labour market, according to an FNV official. The effects of a cultural shift are manifesting themselves in the labour market: nowadays, more people believe they cannot fully utilise their talents or specialisations as a salaried employee. Consequently, the ranks of the self-employed will not exhibit dramatic growth in the future if employers treat employees differently and give them more room for personal development.

The VZzP secretary offered another explanation for the current increase in ZZPs. The erosion of social security for employees has significantly reduced the consequences of the leap to self-employed status and the accompanying loss of social security rights. Another influential factor is that employers now assume greater responsibility with regard to social security, partially due to the privatisation of benefits under the Sickness Benefits Act. Hiring a ZZP relieves employers of social security obligations and is therefore regarded as an advantage.

Commentary

Despite exhaustive efforts by various organisations, it remains to be seen whether many self-employed people without employees will join an interest group. Promoting ZZP interests is based on the premise that collectively organising this group offers advantages. However, the fact that employees choose to establish themselves as self-employed makes a strong statement of individuality, and such people may very well resist joining an organisation on principle.

The ZZPs who do wish to join must choose between a trade union or an organisation specifically focused on ZZP interests. The trade unions will most likely recruit from the group of ZZPs who do not see themselves as "true" entrepreneurs and who also previously belonged to a union during salaried employment. ZZPs who join an "independent" organisation will mainly be motivated by a belief that an interest group can stand up for ZZP interests only if there are no chances of entanglements of interest with employees.

Although the increase in ZZP numbers cannot be denied, it is unclear whether this growth will continue in the future. The ZZP phenomenon must expand significantly to counteract the trend during the last decades of a decrease in the proportion of the self-employed in the total labour force from 16% to 13% (NL9906145F). At least one commentator rejects this scenario and claims that independent employment as opposed to salaried employment also has intrinsic disadvantages - see "De arbeidsmarkt van de toekomst", P De Beer, in ESB-Dossier "Zoeken is vinden", 84/4201(1999). Self-employed individuals run greater risks and must put more effort into arranging individual insurance and pension plans than salaried employees, while the client suffers from the additional administrative red tape required for individual contracts with individual ZZPs. In conclusion, the cost of doing business is increasing for both sides. Therefore, it is plausible that the new strain of self-employment will not retain a fully individual character, but rather inspire those self-employed people active in the same field to join forces by setting up a company or a commercial partnership (Vennootschap Onder Firma, VOF) to reduce the administrative workload and share expenses. (Maaike Verheul, HSI)

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