Government seeks SER recommendation on Working Conditions Act reform

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In October 2004, the Dutch government asked the tripartite Social and Economic Council (SER) to issue a recommendation on suggested changes to the 1998 Working Conditions Act, which governs health and safety at work. The government's premise is that primary responsibility for ensuring good working conditions rests within companies themselves and that more leeway must thus be given to employers and employees to develop this responsibility. It therefore proposes deregulation and the promotion of self-regulation, with special attention to the position of small and medium-sized enterprises. The social partners have differing views on the changes suggested by the government.

In a letter dated 29 October 2004, the State Secretary of Social Affairs and Employment, Henk van Hoof, submitted a request to the tripartite Social and Economic Council (Sociaal-Economische Raad, SER) for a recommendation on the government's proposals for reform based on a recent evaluation of the 1998 Working Conditions Act (Arbeidsomstandighedenwet, Arbowet). The evaluation took place between October 2002 and October 2004. The Working Conditions Act (NL9812112F) is the main item of legislation regulating health and safety at work.

The conclusion drawn by the government from this evaluation is that while the main aims of the 1998 Working Conditions Act - employer and employee responsibility, and leeway for 'customisation' to specific sectoral or company situations - still apply in general, insufficient attention is paid to them in practice. All too often, it is thought, the government has to intervene and regulate, and self-regulation in this area among employers and workers fails to work properly.

The request for an SER recommendation includes proposals for adjustments to the statutory working conditions regime, increasing the present level of responsibility allocated to employers and employees. The request makes the following main points:

• employers and employees must be stimulated to assume responsibility themselves;

• the government must change its supervisory role.

• the burden of regulation should be reduced; and

• provisions for 'self-activation' must be further developed.

Because small and medium-sized enterprises (SMEs) in particular have problems in applying the Working Conditions Act, special attention is given to supporting this type of company.

Employer and employee responsibility

The government believes that the law should provide more leeway for customisation in the area of health and safety. Article 17 of the current Working Conditions Act (on 'customisation') could be extended to support this. At present, this article provides options to deviate from the relevant provisions of collective agreements or agreements between the employer and works council (or representative staff body), based on the conditions specified in the Act. The government is now suggesting support for the option of allowing deviations from the provisions of the Working Conditions Act itself.

It is suggested that employers should be held accountable for their responsibilities to a greater extent, based on sector-wide agreements and targeted information at company level.

If employers and employees give shape to self-regulation, government should attach consequences to this with respect to the priorities of the capacity and content of Labour Inspectorate (Arbeidsinspectie) inspection activities, by elevating the provisions of sectoral agreements in this area to the level of 'standard practice'. Also, concerning enforcement, responsibility should to a greater extent rest primarily with the parties. In this respect, consultation and alternative methods of settling disputes should be the focus and the civil courts or Labour Inspectorate should be called in only as a last resort. With this aim, conditions should be introduced, regulating access to the Labour Inspectorate in terms of requests for investigation and the submission of complaints.

Government's supervisory role

The government should adopt a different role in terms of supervision, according to the request for an SER recommendation, focused more on serious risks and greater activation of employers and employees within companies. The request draws a distinction between 'low' health and safety risks and 'other' risks. Concerning such low risks, the government suggests scrapping the legislation, insofar as this proves possible within the scope of EU law. With respect to the other risks, even though the government believes that primary responsibility rests with the parties, there should still be some input from the public authorities. However, this input should serve as a stimulus initially and differ for each subject. The government proposes a number of criteria to this end for the SER to assess. For low risks still governed by legislation stemming from EU law, enforcement would be left primarily to the civil courts. Public law would provide only a 'safety net' in relation to these low risks, enabling the Labour Inspectorate to take action if cases of abuse nonetheless arise - and the Inspectorate should adopt a restrained stance towards such action. However, concerning the other risks, pressure surrounding enforcement should be stepped up and sanctions should be tightened (larger fines and the application of 'naming and shaming' tactics).

Decreased burden of regulation

The burden of regulation must be lifted, the government argues, calling for deregulation and simplification (ie transparency and the removal of contradictions). Deregulation is limited by boundaries set by EU law and is therefore restricted through force of circumstance to additional national legislation. The government proposes scrapping certain parts of such legislation while retaining others. To the extent that this can be measured, the government's proposals to deregulate and simplify the rules would generate savings of around 5% to 6% in administrative charges. Because EU law imposes limitations with respect to deregulation and simplification, these matters will be taken up in the European context, with the government seeking a joint positions with several other Member States.

Self-activation provisions

Provisions for self-activation on health and safety issues by employers and employees should be developed further, especially by the parties themselves. Studies conducted by the Institute for Applied Social Sciences (Instituut voor Toegepaste Sociale Wetenschappen, ITS), which also served as input for the current evaluation of the 1998 Working Conditions Act, indicate that a number of factors are especially important for shaping sound working conditions policy within companies. This pertains to risk inventory and evaluations, and the intended approach as a starting point for working conditions policy within companies, the role of the working conditions coordinator and the role of employee participation (NL0408102N).

Small and medium-sized enterprises

In the government’s request for a recommendation submitted to the SER, SMEs are given special attention in view of the specific problems facing such companies in terms of working conditions regulation. It is evident from the evaluation of the 1998 Working Conditions Act that the system of public and private rules and recommendations in the area of working conditions is considered highly complex by the SMEs sector in particular, that smaller companies are lagging in terms of a systematic approach and that this sector in particular would like to see aspects of the compulsory rules on providing occupational health services scrapped.

The Ministry of Social Affairs and Employment is involved in a number of supportive measures for the SMEs sector in the area of working conditions, especially in the field of information provision, and the development and accessibility of sector-wide risk inventory and evaluation instruments - eg a website, digital risk inventory and evaluation instruments, and an activity programme for SMEs.

Views of social partners

The trade union movement is critical of the government’s plans. The largest centre, the Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV) is especially disapproving. It believes that the proposed process of deregulation will largely serve the purpose of lowering costs for employers. FNV is critical of scrapping government enforcement of 'low' risk factors. It points out that risks are put in this category that, according to the official 2004 working conditions report, in fact again increased in 2003 and specifically led to exclusion and long-term absence from work, stemming from factors such as increased workload, undesirable behaviour in the workplace and work in standing positions. While FNV is not opposed to 'customisation', it states that more leeway provided in policy terms is not automatically used for customisation at company level, which is also clear from the evaluation of Article 17 of the Working Conditions Act (on customisation). In this context, FNV is calling for activation of the customisation provision in Article 17 of the Working Conditions Act, such that more customisation does not detract from the level of protection. Additionally, FNV argues in favour of strengthening employee participation with respect to working conditions. In its assessment of the Working Conditions Act, the Federation of Managerial and Professional Staff Unions (Unie voor Middelbaar en Hoger Personeel, Unie MHP) prioritises customisation, but sets explicit limits. Customisation should be promoted by strengthening Article 17 of the Working Conditions Act, while on the other hand making the targets of the Act more concrete, especially for the SMEs sector. New provisions should also be added concerning new risks such as repetitive strain injury, increased workload and rapid organisational changes. Unie MHP places the options for deregulation in context, arguing that Dutch health and safety legislation is little more than a translation of the EU rules.

That employers' organisations perceive this matter very differently is apparent from the fact that the issue of EU regulations is precisely where the emphasis lies in their recommendations. The Confederation of Netherlands Industries and Employers (Vereniging Nederlandse Ondernemers - Nederlands Christelijk Ondernemingsverbond, VNO-NCW) and the Dutch Federation of Small and Medium-Sized Enterprises (Midden- en Kleinbedrijf Nederland, MKB-Nederland) are calling for only a direct transposition of EU legislation in national legislation. MKB-Nederland in fact supports an analysis of legislation and regulations, as well as calling for many private rules to be screened in the area of working conditions. MKB-Nederland challenges the suggestion of the trade unions that smaller companies have a need for general provisions rather than target provisions. The SMEs sector has a pronounced need for fewer - and clearer - provisions, it states. In addition to greater 'applicability', both employers' organisations argue in favour of deregulation aimed at reducing the administrative burden.

Commentary

The request for a recommendation submitted to the SER by the government includes its conclusions drawn from a broad-based evaluation of the 1998 Working Conditions Act and its vision of how this should be amended. It thus advocates deregulation, self-regulation and adjusted enforcement provision - or put differently, the reinforcement of these approaches, because the 1998 Working Conditions Act was drawn up on this basis. The government raises several thorny issues for the SER to consider.

Not only does deregulation run up against the boundaries of EU law, the evaluation of the Working Conditions Act shows that self-regulation does not develop by itself. The call for activation of the customisation article in the Act is therefore of particular relevance, with the level of protection and participation requiring just as much focus.

Furthermore, adjustments to the new system of regulation with respect to enforcement by the Labour Inspectorate will not be easy to achieve, which the government also highlights. The idea that the Labour Inspectorate in particular will have to take substantive account of collective agreements reached within sectors is a tricky issue. The Inspectorate may need to adhere to different frames of reference when conducting inspections in the different sectors, and the question arise of what these should be for sectors in which no agreements exist. In such cases, the government suggests adapting agreements reached in one sector to others, which would certainly be a labour-intensive task.

Aside from the fact that tricky legal and administrative issues are at stake, the social partners appear to be diametrically opposed in terms of several important assumptions. Moreover, while employers and employees both favour customisation, their opinions differ on how this should be achieved. The SER certainly has its work cut out on this issue. (Marian Schaapman, HIS)