Role of social partners an issue in plans for new social security system

The basis of the Netherlands' proposed future social security system was laid down in a memorandum published by the Ministry of Social Affairs and Employment at the end of March 1998. According to this memorandum, trade unions will no longer play a role in the administration of social security benefits.

In a memorandum published in March 1998, the Ministry of Social Affairs and Employment outlined its proposals for the future administration of the social security system (NL9704109F). The memorandum envisages a system where disability benefits (WAO) and unemployment benefits (WW) are administered through privatised organisations, while the Government will continue to grant the benefits themselves.

According to the memorandum, the five institutions (uitvoeringsinstellingen- UVIs) currently involved in the administration of the WAO and WW will be privatised on 1 January 2000. Starting in 2001, the institutions will have to compete for contracts from industries, sectors and major companies. At present, these contracts are concluded by the National Institute for Social Security (Landelijk instituut sociale verzekeringen, Lisv), a tripartite body. Employees will no longer be represented in the administration of the benefits under the new system.

The social partners have made some explicit statements about the Ministry's plans. The Dutch Trade Union Federation (FNV), for example, which opposes all plans to privatise the social security system, advocates making only moderate changes to the current system. Furthermore, the FNV feels that trade union input is essential to the administration of social security. According to the FNV, the memorandum foresees a prominent role for employers only. The FNV predicts that during future collective bargaining rounds, the unions will focus on even higher pay demands since it now appears that they will be sidelined in the new social security system. The Christian Trade Union Federation (CNV) agrees that concluding administrative contracts with institutions should be a matter for both employees and employers.

In contrast to the FNV, the CNV advocates the privatisation of the social security administration, a viewpoint it shares with the employers' associations VNO-NCW and MKB-Nederland. The employers fear a lack of coherence if the allocation of benefits is organisationally separated from the actual administration of benefits. They therefore feel that private organisations should also process requests for WAO or WW benefits. The VNO-NCW feels that trade unions and employers' associations should establish an agency to supervise the privatised operations. According to the VNO-NCW, Dutch industrial relations are characterised by the prominent role that trade unions play in such matters as the administration of social security.

The social partners have been asked to advise the Ministry on its plans for the new social security system. Later in spring 1998, the VNO-NCW intends to conclude an agreement within the bipartite Labour Foundation (Stichting van de Arbeid, STAR) on the privatisation of such matters as the administration of social security. Since the FNV wishes to prevent the social partners from providing contradictory advice, it wants to discuss the matter with the new Government, the employers and the other unions after the general elections on 6 May 1998.