Cabinet and social partners reach compromise on new social security structure

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In January 2000, the Dutch social partners and the government reached a compromise on a new structure for the social security system, under which the social partners will assume a larger role in formulating policy on reintegrating unemployed and disabled people into the labour market. The cabinet's proposal to place the payment of benefits to these two groups, and responsibility for implementation, entirely in the public domain remained unchanged.

In January 2000, the Dutch cabinet and social partners reached a compromise on a new structure for the social security system, after spending the winter of 1999 at loggerheads with one another (NL9912176F). The social partners favoured complete privatisation, whereas the cabinet concluded that decision-making responsibility for the provision and implementation of benefits for unemployed and disabled people should once again be borne entirely by the public sector. The cabinet's plan left the actual reintegration of unemployed and disabled individuals down to market forces, assigning the social partners an advisory role. During reintegration, however, representatives of the social partners do play a policy-making role alongside municipal representatives in the Employment and Income Council (Raad voor Werk en Inkomen) advisory body. The cabinet has now created more options, especially in this respect, by offering the council a budget, while essentially maintaining the broad lines of its proposal.

In the area of supervising reintegration into new positions in the labour market, the cabinet has now granted trade unions more power by allowing collective agreements to include provisions obliging companies to help former employees find another job. The Minister of Social Affairs can declare such agreements generally binding, which means that the entire sector must comply with their provisions. Consequently, this restricts individual companies' degree of freedom.

The allocation of a budget to the Employment and Income Council forms the cabinet's second concession. The council, comprising representatives of trade unions, employers and municipal authorities, can use the budget to award reintegration subsidies at sector level. This also provides the social partners with more leverage at a level above that of individual companies. Reintegration occurs in cooperation with commercial companies in the private sector. With this change in implementing social security policy, the Minister of Social Affairs has in effect assigned more supervisory power to the social partners and kept the public aspect - the provision and implementation of benefits - completely out of negotiations.