Social partners and government reach 'social agreement' for 2003

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In November 2002, the Dutch government and social partners reached a 'social agreement' for 2003, including a pay increase limit of 2.5% - the first such centrally agreed wage ceiling for a decade. Under the agreement, the government has released a sum of EUR 1 billion to meet the social partners' demands, including cuts in tax and social security contributions.

In November 2002, the government and the social partners concluded a 'social agreement' (sociaal akkoord) for 2003. The two largest trade union confederations in the Netherlands, the Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV) and the Christian Trade Union Federation (Christelijk Nationaal Vakverbond, CNV), agreed to accept a wage increase of 2.5% for all employees, despite their earlier demands for 3.5% based on inflation and rising pension contributions. This is the first time in 10 years that such a centrally agreed wage ceiling has been decided.

Several thorny issues were not dealt with in the agreement, such as reform of the Occupational Disability Insurance Act (WAO), leaving the forthcoming new government - to be formed in 2003 following the collapse of the previous administration in October 2002 (NL0211101N) - to reach decisions in these areas. In the interests of alleviating the burden of taxation and social security contributions, the current caretaker government has provided a sum of EUR 1 billion in the 2003 social agreement, of which half is earmarked for lessening the load borne by employers and employees.

Both trade unions and employers expect the government to provide occupational pension funds with more time to deal with their shortfalls resulting from falling stock market prices (NL0210102F). Pension contribution increases in 2003 will therefore be kept in check, offering partial compensation for moderate wage increases. The VNO-NCW employers’ confederation would also like to see its members' unemployment insurance contribution burden reduced by some EUR 250 million a year, while FNV wants to see EUR 130 million extra spent on helping to bolster the tax-exempt employee savings scheme (spaarloon).

The trade union movement also expects the government to spare subsidised employment from abolition (NL0206104F). This concerns the so-called 'Melkert jobs' scheme introduced by the former 'purple' coalition cabinet, which generates work for as many as 80,000 unemployed people. The plans of the centre-right government which collapsed in October 2002 to terminate the scheme met with fierce resistance not only from those workers directly affected and the unions, but also from the municipalities, which have used employment under these schemes to meet citizens’ demands for greater public safety and personal safety in public transport. A number of municipalities even stated that they intended to finance the jobs in question using their own resources if necessary (NL0208101N). The government has now agreed to co-finance the conversion of 20,000 of these jobs into regular employment. A solution has yet to be found for the 60,000 remaining jobs, in order to support the retraining and development of those concerned with a view to finding regular employment.

In 2003, the government has agreed to pay an extra supplement of EUR 450 to families who have been receiving social benefits at the minimum level for more than three years, thus partly meeting trade union demands.

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