It was announced in November 1999 that hundreds of jobs were in danger at the Dutch Joint Administration Office (GAK), which manages social security benefits, because the level of unemployment insurance and occupational disability benefits being paid out is decreasing as a result of the strengthening economy. Until recently, GAK was undergoing privatisation, but the government halted this process at the end of November. GAK is now to remain a publicly-owned company.
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It was announced in November 1999 that hundreds of jobs were in danger at the Dutch Joint Administration Office (GAK), which manages social security benefits, because the level of unemployment insurance and occupational disability benefits being paid out is decreasing as a result of the strengthening economy. Until recently, GAK was undergoing privatisation, but the government halted this process at the end of November. GAK is now to remain a publicly-owned company.
Hundreds of jobs are under threat at the Dutch Joint Administration Office (GAK), the largest organisation paying out benefits under the Unemployment Insurance Act and Occupational Disability Insurance Act, it was announced in the middle of November 1999. The jobs are in danger because the level of benefits being paid out is decreasing due to the strengthening economy. GAK Holding, the private division of the enterprise that deals in insurance, company support and property is flourishing, but the public division that deals with social security benefits is facing financial problems. If the board does not intervene immediately, the organisation will record a loss of NLG 63 million for the 1999 financial year, though a profit of NLG 36 million was recorded in the previous year, a spokesperson said.
GAK's benefits organisation is said to have too many people on its staff in relation to the unemployment insurance benefits currently being paid out, while there are too few employees, especially medical examiners, to deal with the occupational disability dossiers. Moreover, the company is paid on the basis of cases handled. GAK has more than 10,000 employees in permanent employment. Kees Kramer, director of the Allied Unions (FNV-Bondgenoten), said in response to the announcement of coming job cuts that he feared an even greater loss of jobs might follow, perhaps as many as 800 or 1,000. The number of temporary employees had already been cut back, forcing the remaining personnel to work under greater pressure, he claimed. The board's proposals were unpleasant, Mr Kramer added, especially since it had become public knowledge some weeks before that the salaries of the members of the board had risen some 400% since the partial privatisation of the organisation began in 1996.
A GAK spokeperson defended the decision, saying that continuing uncertainty regarding the reorganisation of social security was playing havoc with the privatised parts of the company. In recent years, the company board had been very enthusiastic about privatisation and had sold or hived off profitable units, while a merger with the insurance company Achmea had also been agreed, pending a decision regarding full privatisation. However, the operational management of the social benefits organisation had received considerably less attention. Moreover, the board had been in a position to conclude that, since the Dutch economy had been doing well for some years, this was bound to have an impact on the volume of social benefits.
At the end of November 1999, the government announced that there would be no further privatisation of the organisation, which will remain publicly owned. In the end, the board made clear that the move would involve the loss of 170 permanent employees and about 70 employees on temporary contracts. A redundancy plan for the permanent workers has been agreed with the trade unions.
Eurofound recommends citing this publication in the following way.
Eurofound (1999), Jobs threatened at GAK social security, article.
