Training and pay claims prove difficult in 1998 bargaining round

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In November 1997, the social partners represented on the Netherlands' Labour Foundation seemed to have reconfirmed the reputation of the Dutch "consultation model" by jointly averting a possible end to the policy of pay moderation. It was agreed in the Foundation to continue moderate pay increases in exchange for employee training opportunities and sick leave. However, initial analysis of negotiations in early 1998 reveals that, in practice, it is very difficult to translate the provisions of such an agreement reached at central level into a form that is acceptable to the social partners at sector or company level.

The first round of 1998 collective bargaining in the Netherlands, which started early in the year, can already be characterised as difficult. Although bargaining often seems to have trouble getting off the ground, the current problems seem particularly trying. A number of these obstacles relates to specific sectors or companies, such as the introduction of merit-based pay and "function contracts" (NL9801155N). Unions are willing to discuss performance-based pay, also known as "flexible incentive schemes", only if it comes in addition to structural wage increases (NL9712149F). Employers (such as Philips and the information technology firm Debis, a Daimler Benz subsidiary) on the other hand, support performance-based pay only if it would largely replace such wage increases. Moreover, employers such as Akzo Nobel intend to introduce employment contracts for staff in higher grades which may deviate from the collective agreements. Unions fear that such contracts will lead to a division between personnel within companies.

Pay and training contentious

In addition to these company and sector-related problems, two other issues have served as recurring obstacles in much of the collective bargaining this year: the level of pay increases and the implementation of training schemes. Despite the agreements reached by the social partners in mid-November 1997 (NL9711148N) within the Labour Foundation (Stichting van de Arbeid, STAR), agreements on wage increases and training have been difficult to conclude at the local level. The collective agreement in the banking sector, signed in January 1998, is a good example of this. In this sector (113,000 employees) employers were confronted with pay claims which, depending on the union, varied between 4% and 6%. These claims exceeded the 3.75% pay increase agreed for 1998 by the union confederations.

Because the collective agreement in the banking sector was the first major contract to be negotiated in 1998, the VNO-NCW central employers' association was determined that too many concessions should not be made with respect to pay increases. VNO-NCW feared that this could spark a wave of increases that could possibly affect collective bargaining in other sectors and companies. The banking negotiators finally opted for a nine-month "interim agreement" and a 3% wage increase. Training for banking personnel has also proved to be a source of conflict between employers and the unions. The banking sector is known for its relatively high proportion of less skilled staff. Although both parties acknowledge the need for training, this has not been included in the interim agreement because both parties were unable to agree on the issue. The unions are frustrated by this, and hope that an agreement on training can still be reached during the course of the interim agreement.

While the social partners in banking have succeeded in concluding an agreement, albeit non-standard, collective bargaining at Akzo Nobel (18,000 employees in the Netherlands) reached an impasse in early February. As was the case in the banking sector, the social partners at Akzo Nobel were unable to resolve the issue of training and employability, nor could they agree on the level of the pay increase. Akzo Nobel wishes to terminate the 1995 agreements on training, feeling these to be too specific. In contrast, the unions are satisfied with the agreements and wish to have them upheld by the 1998 collective agreement. The unions have indicated that they will consult their members before taking any industrial action.

An exception to the otherwise laborious bargaining processes was the principal agreement in the cardboard industry (7,000 employees). A moderate 3% pay increase for both 1998 and 1999 was exchanged for a stipulation that employers establish training schemes for all their employees. These schemes must be approved by a committee of representatives from employers' and employees' organisations. Companies which fail to submit schemes that meet the committee's criteria will be obliged to pay 0.25% of the average earnings to the sector's training fund. These agreements have demonstrated that it is indeed possible to exchange wage moderation for training provisions.

Commentary

Both employers' organisations and trade unions agree on the need to improve the employability of workers (NL9801157N). Both sides agree that adequate (continuing) training of employees is a vital factor. However, once negotiations are in progress, employers in particular recoil from specifying training agreements. The unions feel that employers should be responsible for providing training facilities, to be expressed in both time and money. On the other hand, VNO-NCW maintains that training not necessarily related to an employee's current position should take place in his or her own free time. It feels that employees should save up their free days or holiday time to attend training courses for longer periods.

Obviously, employers aim to limit wage increases for 1998 to a maximum of 3% without committing themselves to costly investment in personnel training. Before the 1998 collective bargaining round, the FNV trade union confederation stated that, in view of what it saw as astronomical salaries paid in 1997 to senior management, employees on the shopfloor should also benefit from economic growth. Now that collective bargaining has reached an impasse in some sectors and has not led to the desired outcome in others, the FNV has announced that compliance with its 3.75% pay claims and centrally concluded training agreements could be enforced by possible industrial action. Recent studies have shown an increased willingness amongst employees to undertake action to improve their working conditions. These results will certainly support the FNV in its pursuit of enforcing compliance. Strikes have already taken place in January and February 1998 to improve collective agreements in the education sector and "labour pools", the latter relating to the government's job-creation schemes. Moreover, with the bargaining processes in the traditionally contentious metalworking industry and at Philips, where the thorny issues are pay increases and employability respectively, still ahead, it is clear that collective bargaining this spring will prove to be another major test of the Dutch "consultation model" (NL9710137F) (Martijn van Velzen, HSI)