Social partners debate collective agreement system

Worries about levels of union membership have prompted debates on the collective bargaining system in the Netherlands. Governments have supported collective bargaining but the current Minister for Employment has stressed the need to enlarge the social base of the system and has sought advice from the tripartite Social and Economic Council about how to do this. Around 80% of workers in the Netherlands are covered by collective agreements while union density has dropped to 20%.

Background

In the Netherlands, successive governments and parliaments have generally supported the collective bargaining system. However, there are some worries that falling union membership might compromise the legitimacy of collective agreements in the future.

Falling union density in the Netherlands has led to questions about the representativeness of unions, sparking debates in parliament about the system of collective bargaining.

Government seeks advice

The Minister of Social Affairs and Employment, Lodewijk Asscher, has asked for advice from the country’s tripartite advisory body, the Social and Economic Council (SER), about how to broaden the social basis of the collective bargaining system. While around 80% of Dutch employees are covered by collective agreements negotiated by unions, union density has dropped to around 20% of the workforce.

The SER is made up of one-third employer representatives, one-third union federation representatives and one-third independent members. In response to the minister’s request, on 23 August 2013 the SER issued its own advice about how to make sure the employees’ side of collective bargaining is as representative as possible of Dutch workers.

Coverage much higher than density

Sectoral collective agreements dominate the Netherland’s wage and working conditions negotiation processes, covering 5.6 million employees – 88% of them directly and 12% through extension of the agreement to other related sectors and businesses by the Ministry of Social Affairs and Employment. Such high coverage is, to a large extent, explained by the high levels of employer organisation density, which various sources estimate at between 50% and 80%.

Union density is much lower, having dropped from 25% in 2000 to 20% in 2012.

In general, employers and employees are satisfied with their collective agreements. Younger employees are particularly positive about both the importance of collective agreements in general, and about the deals that apply to them. This may be considered significant, given the very low union membership among younger employees.

Employers are also generally positive, though slightly less so than employees. Employers whose workers are directly covered by collective agreements are slightly more positive than employers covered through the extension mechanism.

Broadening the social base

The SER highlights the need to involve as many employees as possible in the collective bargaining process. This, it says, may compensate for falling union density and strengthen the legitimacy of the unions in the process. According to the SER, social partners have already developed initiatives to involve non-members in the collective bargaining process and it urges them to continue to do so.

The SER also emphasises the need for social partners to take into account developments in the labour market such as individualisation and flexibilisation. To some extent this has already happened, by using the growing flexibility of the collective bargaining system. Examples include the introduction of individual budgets for training and education, initiatives to enhance employability, and work-to-work initiatives that help employees to move from one job to another and avoid unemployment while companies are restructuring.

Finally, the SER points to the growing number of self-employed. Self-employed workers do not have employee status and are therefore not covered by collective agreements. The same is true for a large number of foreign employees working in the Netherlands.

The SER says the self-employed and foreign workers have a significant impact on the relevance of collective agreements. It argues that the social partners in the relevant sectors have a responsibility to develop initiatives to cope with these developments. It gives the example of arrangements to allow the self-employed to take advantage of training and education programmes negotiated as part of collective agreements.

Robbert van het Kaar, AIAS/HSI