The Netherlands: Parliamentary debate on collective bargaining and extension of collective agreements

On 4 February 2016, a parliamentary debate took place initiated by liberal parties VVD and D66 on issues regarding the collective bargaining system and the extension of agreements, which they believe distorts the labour market.

On 4 February 2016, a parliamentary debate took place on the collective bargaining system which has been in existence in its present form since the statutory introduction of collective agreements in 1927 and the system of extension in 1937. The debate, initiated by The People's Party for Freedom and Democracy (VVD) and Democrats 66 (D66), focused on their criticism of the present system and the extension of agreements that contain provisions on payment during sickness and facilities for older employees above the statutory minimum. In their view, this distorts the labour market, making several categories of employees too expensive for employers. Another issue was the present structure of the sectoral funds for training and education, which they feel is inflexible.

The debate took place after the presentation in January of the results of a research project on extension, conducted by Regioplan, Amsterdam. The main findings of the report were:

• In the documentation on extension, the perceived positive effects of extension are non-controversial. Furthermore, no potential negative effects (increased wage costs and distortion of the market mechanism) can be identified. Also, the instrument of extension leaves enough scope for tailor-made solutions, although currently not fully utilised.
• Existing quantitative research does not allow for conclusions of the effects of extension, especially with regard to the effects on employment levels.
• Stakeholders are generally positive on the instrument of extension.
• The main criticism pertains to procedural aspects, such as delays in the granting of extension, no full synchronisation with the underlying collective agreement and the objection and dismissal procedures.

Minister of Social Affairs and Employment Lodewijk Asscher acknowledged that some issues were problematic, but would not acknowledge the request to refuse extension in specific cases, stressing the internationally recognised freedom of collective bargaining.

Minister Asscher felt that the instrument of refusal of extension was too severe, pointing out the need to discuss the entire collective bargaining system with the social partners with the aim of possible revisions to the extension. A revision could deal with the increase in the number of self-employed workers, along with the possibility to create regional agreements that do not currently exist in the Netherlands. He further pointed out that some of the problems that have existed for many years are gradually being resolved. A good example is the increasing flexibility of training and education funds. Until recently, these were completely restricted to a limited number of sectors. However, sectoral boundaries have now been reduced, resulting in increased intersectoral mobility.

At the end of the debate, a majority vote of the Second Chamber rejected the motions that had been put forward by the liberal parties.