2001 bargaining round likely to be difficult

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In its recommendations for the Dutch 2001 bargaining round, the bipartite Labour Foundation has called for wage moderation, plus measures to improve training and employability and to modernise remuneration policy. However, bargaining is likely to be turbulent, with some employers seeking cuts in sick pay, and a number of unions affiliated to the FNV confederation seeking 6% pay increases, rather than the 4% recommended by FNV. The government supports wage restraint and has taken budgetary and other measures to promote training, working time flexibility and employee savings.

In December 2000, the bipartite Labour Foundation (Stichting van de Arbeid, STAR) issued its recommendations to the lower-level social partners for the 2001 collective bargaining round. Sustained wage moderation is the central theme, with the Foundation viewing rapidly rising wages as raising the risk of eroding profits, competitiveness and job opportunities in companies and sectors. Increasing labour shortages are seen as the primary threat to moderation, and the STAR therefore appeals to the collective bargaining parties to combine wage moderation and investment in training and employability. It also promotes improving the work-life balance and adopting further measures to modernise remuneration policy.

As the 2001 bargaining round got underway at sector and company level in January, it became clear that putting the STAR's recommendations into practice was to be problematic.

Employers seek cuts in sick pay

Some employers affiliated to the VNO-NCW employers' confederation are pushing for reductions in wage costs, taking a different approach to that agreed by the VNO-NCW representatives on the Labour Foundation. A view long shared by some within VNO-NCW's ranks is that employees who are unable to work due to sickness should receive reduced pay, and current labour shortages are now giving support to this demand. Proponents believe that sick pay cuts will provide employees with sufficient financial motivation to return to work, or find suitable employment, quickly. They wish to repeal agreements reached in the past with the trade unions which supplement sickness benefits, bringing them up to 100% of the normal pay level in the event of sickness. Moreover, some employers wish to reward employees if they are not absent due to sickness for a whole year.

VNO-NCW interprets the Labour Foundation's central recommendations on investing in training and employability as meaning that, depending on the nature of the training, employees should be required to undertake it in their own time. Employers argue that training during working hours significantly reduces productivity, and it should therefore be assessed very critically.

The Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV) has expressed outrage at these proposals and anticipates tough negotiations at the bargaining table. If room for negotiation on training and sick pay vanishes, it is anticipated that this will serve only to push up wages further.

FNV demands

At the start of 2001's collective bargaining, FNV envisages a 4% wage increase, almost entirely to keep pace with inflation (NL0012115N). This moderate wage demand has not been welcomed across the board by FNV's affiliated unions. For example, the construction workers' union, FNV Bouw- which is usually the first to conclude a collective agreement at the end of winter period - is demanding a 6% pay increase. Similarly, the FNV unions represented at the Akzo-Nobel chemicals group and in the healthcare sector are seeking a 6% increase.

FNV's support for a 4% wage increase is dependent on pay moderation being accompanied by qualitative improvements in the areas of training, flexible working hours and remuneration policy. For example, agreement was reached in the Labour Foundation that an individual training budget will be made available for each employee. This reflects both employers' emphasis on employability, and a recognition by FNV of the necessity for ongoing training in today's economic climate. The government also attaches great value to this point. As emphasised by the Labour Foundation, it is of prime importance to ensure that today's employees are equipped to cope with the demands of tomorrow's "knowledge economy", especially in view of the ageing population.

Flexible working hours will also help to keep the present workforce employed in the future, according to FNV. Agreement has been reached within the Labour Foundation that employees will be free to determine whether they take, accumulate or exchange for cash so-called non-statutory holiday days, extra days off and the like. FNV is convinced that participation in time issues is a key factor in employee satisfaction. It has also become clear that employees who combine work and family care duties are far less prone to stress if there is some leeway when it comes to when they start and finish work each day. The government, too, sees advantages to greater working time flexibility and has drafted legislation to pave the way to saving up time off for longer leave periods (in the past, this was limited to leave periods of one year). In their STAR recommendations on the 2001 bargaining round, the social partners also indicate that they intend to devote a great deal of attention to long-term care leave and paid parental leave, for which the government has laid much of the groundwork (NL9907154N).

Modernisation of remuneration policy

The Labour Foundation's recommendations on modernising remuneration policy start from the belief that the system of payment should be more closely linked to the nature of the job concerned, with experience and level of skill replacing age as a criterion. Furthermore, it should be possible to reflect individual employee performance as well as that of the company as a whole in remuneration, in both a positive and a negative sense. To this end, the Labour Foundation suggests profit-sharing schemes, year-end and one-off bonuses and share-option schemes. Objectivity and transparency must, however, be upheld.

Although FNV concurs with these recommendations, a recent survey conducted by the Market Research Association (Marktonderzoekassociatie, MOA) among 900 employees and 1,000 employers indicates that employees are by no means enthusiastic about flexible forms of payment. Most of them say that, if given the choice, a fixed "13th month" pay cheque would be the favoured option. It is also noteworthy that the majority of employers are not keen on providing shares and share options to all employees, while they are positive about employee training. By contrast, employees are not enamoured with the prospect of exchanging pay for training: only one in three employees is in favour of this arrangement.

The social partners within the Labour Foundation agreed their various recommendations following concessions on the part of government. The government is particularly fearful of spiralling wage costs that would serve to fan already-rising inflation (2.5% in 2000). The Prime Minister, along with several other ministers, believes that a 4% wage demand is too high, perhaps even irresponsible. In consultations during autumn 2000, the cabinet urged the social partners to reach agreements on training, saving up time off and profit-sharing schemes. To promote such agreement, the cabinet has earmarked an additional NLG 350 million for vocational training and also intends to make agreements on time savings schemes in exchange for wage moderation more attractive by annually increasing the tax allowance for such schemes.

Commentary

Once again, FNV finds itself torn between conflicting interests. Employers' organisations have made proposals that potentially jeopardise the agreements reached within the Labour Foundation. On the other hand, while FNV's affiliated unions may indeed support the aims of central agreements in the Foundation on training and employee participation, practice shows that such agreements have little effect on the shopfloor. By contrast, agreements on increased wages have immediate results for employees. The findings of the MOA survey mentioned above serve to underpin this assessment further. This, however, does not detract from the fact that the social partners in the Netherlands carry responsibilities that transcend their own direct interests. Investing in the social capital represented by employees is one of their responsibilities, but the results will only be visible over time. (Marianne Grünell, HSI)