The Philips electrical group intends to promote the mobility and employability of its 40,000 employees. However, recent plans to adapt its employment contracts leaked out prematurely in October 1997.
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The Philips electrical group intends to promote the mobility and employability of its 40,000 employees. However, recent plans to adapt its employment contracts leaked out prematurely in October 1997.
According to confidential papers disclosed at the beginning of October 1997, Philips intends to abolish traditional employment contracts indefinitely. These papers refer to proposals made by Philips in a working group with the trade unions on "collective employability". In the 1996 collective agreement, Philips, De Unie, the union for industry and services, and Vereniging voor Hoger Philips Personeel (VHPP) the union for professional and managerial staff at Philips, agreed to conduct a joint study. Although not formally part of the collective agreement, Industriebond FNV, the industrial union affiliated to the Dutch Federation of Trade Unions, and Industrie- en Voedingsbond CNV, the industrial and food union affiliated to the Christian Trade Union Federation, also participated in the working group.
Philips has made its proposals in anticipation of a socio-economic revolution resulting from developments in information and communications technology. Philips predicts that the ramifications of these developments will come to the fore in the 21st century, and envisages a future replete with "virtual enterprises" where workers attach less importance to their positions and functions within the firm, and more to their personal contribution to company results. In the opinion of Philips, life-long employment will no longer exist. Instead, each employee will be his or her own "Employability Ltd", responsible for managing his or her own career.
The permanent employment contracts currently in use do not fit into this future scenario. Instead, Philips would like to negotiate a framework agreement with employees, linked to a statement of intent, to establish the maximum time one may work in a particular position. Once this period has expired, the employer may decide whether to place the employee concerned back into this same position (for example, because no other position is available). However, this should not be done at the expense of the mobility of other employees. Automatic pay increases on the basis of age will be a thing of the past, and results and competencies will determine rewards. In the interests of vocational training, Philips will offer five days' training leave. This time off will be paid, provided that the goals are met. If a worker's performance remains insufficient, or if a worker refuses vocational training, Philips would like to have the right to demote, reduce pay or compulsorily transfer.
Because the trade unions agreed to a form of "radio silence", they have not been very vocal about their positions in the media. The unions are not opposed to the general principles underlying Philips' proposal, and view these as possible starting points for a new collective agreement. This could, for example, include variable pay and extra time for vocational training in the short term. Philips is expected to propose more revolutionary measures for the long term. The working group on employability plans to have its recommendations ready for the negotiators in November 1997. The current collective agreement expires on 31 March 1998.
Eurofound recommends citing this publication in the following way.
Eurofound (1997), Philips' future scenario: the end of job security, article.
