The partial agreement in the Netherlands reached by the recently formed coalition of the liberal VVD and social democratic PvdA parties on the country’s 2013 budget has been given a guarded welcome by both employer and employee representatives. Social partners on both sides support the crisis package for company pension schemes, which rules out heavy cuts, at least for the time being. However, employers are critical of proposals on the Sickness Benefits Act.
Employer and employee representatives in the Netherlands appear to have given a moderately enthusiastic welcome to a new budget agreement for 2013. The partial agreement was reached by the coalition of the liberal People’s Party for Freedom and Democracy (VVD) and social democratic Labour Party (PvdA) on the 2013 austerity measures.
The parties emerged as joint victors from the elections held on 12 September 2012. Together, they formed a parliamentary majority. The liberal VVD won 41 seats in the 150-seat lower house, 10 more than it had before the elections. The social democratic PvdA increased its number of seats to 38.
The partial agreement reached jointly by these parties on the 2013 budget effectively cancels several points accepted in the spring of 2012 by a majority of the House of Representatives when the outgoing cabinet’s budget was presented.
Social partners on both sides applauded the fact that commuter tax had again been removed from the budget, although employer associations rejected the idea that the shortfall could be covered by higher insurance premium tax. This once again redirects the bill to companies and citizens.
Compensation for companies with higher insurance premium tax has also been scrapped, leading to a €647 million reduction in the financial burden.
Employer associations are critical of plans for the Sickness Benefits Act (ZW). Organisations that have voiced their concerns include the Confederation of Netherlands Industry and Employers (VNO-NCW), the Dutch Federation of Small and Medium-Sized Enterprises (MKB-Nederland) and the Dutch Confederation for Agriculture and Horticulture (LTO Nederland)
The proposed amendments relate to people employed on flexible contracts, not to employees with a standard contract.
Flexible employees are more likely to take sick leave than those on a standard contract, and are likely to be sick for a longer period. The Government wants to tackle this by shortening the sickness benefit period to three months, and making employers responsible for getting employees on flexible contracts back to work after periods of sickness.
Employer representatives are angry at the proposal that they should take responsibility for ensuring those on flexible contracts return to work, and have called on the Senate of the Dutch Parliament to vote against the legislation. They argue that the time-frame within which an employer would carry such responsibility bears no relation to the short period during which flexible employees are generally in the job.
The unions endorse this position and believe that the panacea whereby employers carry financial responsibility for their sick employees and their reintegration into employment among full-time employees with a long service record merits attention.
Social partners are encouraged by pension proposals in the partial agreement for 2013, though they believe the Government needs to do more to safeguard the company/sector-wide pension fund system.
In the interim, the respective parties have approved an adjustment of the low interest rate.
After 2013, the definitive interest rate must be set for the long term, taking better advantage of European decision-making. But the employee and employer associations are pleased that less severe pension cuts will be made in the short term.
However, some employee organisations take a different view of the proposals.
The Netherlands Trade Union Confederation (FNV) and the National Federation of Christian Trade Unions (CNV) insist on their own more flexible plans and want to see the pension agreement reached between the social partners in June 2011 maintained (NL1112029I).
The FNV and CNV believe that older people and people who work in strenuous professions should also be given a chance to stay in the labour market for longer, even if they have to change their jobs. However, there doesn’t seem to be any money left in the budget to support such measures.
The unions are pleased that transitional arrangements have been agreed and that the working bonus is back, but they say things could have been organised better.
The FNV and CNV are both looking for new ways to supervise a smoother transition from one job to another after redundancy to minimise periods of unemployment. Both would like to see measures to achieve this in collective labour agreements.
In practice this would mean that the notice period for dismissal would have to be extended too, and that employers and employees would be jointly responsible during this transition period for looking for a new job.
Such measures would make it possible for support to be drawn from the knowledge possessed by regional and sector-wide transfer centres. After all, knowledge of the labour market is concentrated in the centres, and employees would gain more security while dismissal costs should decrease for employers.
Marianne Grunell, University of Amsterdam