Significant wage increases across all sectors

In the spring of 2007, the Dutch Trade Union Federation anticipated a further collective wage increase. The 3% increase agreed on in both the public and construction sectors appears to have set the trend, with some sectors gaining even more than trade union demands. As the General Industrial Employers’ Association had predicted that the increases would be more modest, it must now recognise that economic recovery is fuelling higher wage increases.

Wage growth predictions

In the spring of 2007, the Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV) anticipated a further collective wage increase. The Central Planning Office (Centraal Planbureau, CPB) subsequently predicted a collective wage growth of 3.25%. At that time, the General Industrial Employers’ Association (Algemene Werkgevers Vereniging Nederland, AWVN) maintained its average wage growth forecast of 2.16%. However, as this calculation method does not differentiate between small and large-scale collective labour agreements, they are weighted equally, while the number of employees covered by specific agreements can differ. It is now emerging that the 3% increase agreed on in both the public and construction sectors appears to have set the trend in other sectors.

Recent wage increases

Drivers in the haulage sector will in fact receive a higher wage increase than the trade unions had originally requested. Accordingly, the trade unions and employers have agreed on a wage rise of 3.2% with effect from 1 June 2007, in addition to a further increase of 1.5% from April 2008. During lightning strikes held in March of this year, the trade unions demanded a 3% increase, while the employers were adamant that they would go no further than a 2.5% rise. The wage increase agreed on for civil servants played a significant role in the collective agreement recently reached in the haulage sector (NL0705019I). An additional one-off, year-end bonus of €350 has also been agreed on. In addition, supplements will be taken into account regarding pension accrual, while the shift work supplement is set to increase by 1.25% with effect from 1 January 2008.

A unique agreement has been reached whereby drivers hired from eastern European countries must always be paid in line with the collective wage stipulated. In civil aviation and at KLM Royal Dutch Airlines, employees are due to receive an overall structural wage increase of 6.5% over the next two years. This also exceeds the maximum wage demand of 3% put forward by the trade unions. However, the Allied Industry, Food, Services and Transport Union (FNV Bondgenoten) is only partly satisfied with the outcome. Both ground crew and airline crew were pushing for higher incomes, while cabin crew were demanding greater attention in relation to their workload. The employees must now consider whether the remuneration offers sufficient compensation.

Employees working in housing corporations and architectural companies will also receive a sizeable wage increase in the coming years, with a structural rise of 6.6% set to come into effect over the next two years in housing corporations. At the same time, architectural companies are due to receive two increases of 3% in the next two-year period. In return, however, the employees will have to settle for less than bargained for in terms of the length of the working week. While the working week will in principle be extended, existing staff can nevertheless offset the weekly extension against their holiday entitlement. Newly appointed staff will have to work on the basis of the standard 40-hour working week.

ING agreement includes training

While the trade unions are pleased with the new wage increases, they consider it regrettable that the agreements relate exclusively to primary terms and conditions of employment. The unions are particularly disappointed by the low number of agreements concerning training and education: new agreements have been taken up in only 13 collective agreements. The collective agreement for the ING bank is an exception in this respect: along with a phased yet structural wage increase of 4.25% for the bank’s employees, an additional agreement has also been reached, with effect from 2008, whereby ING employees will be entitled to a sum of €1,200 to devote to their personal development. These agreements stem from the redundancy plan in which diminishing job opportunities within the bank are to be compensated by development opportunities aimed at promoting employment outside of the bank.

Commentary

Overall, the trade unions must be satisfied that a number of sectors achieved higher than expected wage increases. For its part, AWVN declared that it anticipated more modest wage increases; the employer organisation must now recognise that economic recovery is fuelling higher wage increases.

Marianne Grünell, Hugo Sinzheimer Institute (HSI)