Decentralisation of working time regulation to enterprise level assessed

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One of the goals of the Dutch Working Time Act of 1996 was to transfer decision-making on working time to the enterprise or even plant level. A survey evaluating the effects of the Act, carried out in 2000 and published in 2001, finds that the ability of employee representatives to counter management proposals in this area leaves a great deal to be desired in many enterprises. As yet, however, the government sees no reason to intervene.

Since the early 1990s, there appears to have been a trend towards decentralisation in the development of Dutch labour law, whereby the emphasis in the regulation of industrial relations is shifting from the macro level to the level of individual enterprises. At the same time, the government has been withdrawing from some fields of economic and social policy. The most striking example of this decentralisation trend was the 1996 Working Time Act (Arbeidstijdenwet), which allows the works council and the employer, under certain conditions, to make arrangements relating to rest periods and working hours. The Working Time Act has now been evaluated after five years. Below, we look at the main findings of this study and the government's response to the evaluation.

Main points of the Working Time Act

The primary objective of the 1996 Working Time Act is to protect the health, safety and well-being of employees by laying down statutory regulations governing working and rest hours. The second objective is to promote the ability for employees to combine employment with care tasks. The third objective is to restrict the government's role and increase the role of the social partners in the matter of working time. The Act contains standard norms with regard to a large number of working time issues. It is possible to deviate from these norms under certain conditions by means of a collective scheme. Such a collective scheme can be an agreement with trade unions, but also an arrangement whereby the employer reaches a written agreement with the works council or the 'employee representation' (a kind of small-scale works council in smaller firms).

The working and resting hours agreed in a collective scheme are restricted by the so-called negotiation norms. These offer greater leeway than the standard norms. The question of whether the works council or employee representation are competent to negotiate a collective scheme depends on whether or not the company is subject to a collective agreement and what the contents of such an agreement are:

  • if there is no collective agreement, the employer and the works council or employee representatives can agree a collective scheme within the parameters of the negotiation norms;
  • if there is a collective agreement, but the collective agreement does not stipulate working or rest times, the employer is not authorised to agree a collective scheme with the works council or the employee representatives, and is bound by the standard norms of the Working Time Act;
  • if there is a collective agreement and this contains provisions on either rest hours or rest-break regulations ('cluster A'), or on working hours, working at night or on Sundays ('cluster B'), the employer may agree a collective scheme with the works council or the employee representatives on the 'cluster' of subjects stipulated in the collective agreement. If the collective agreement covers both clusters, the employer may therefore agree on a scheme covering both with the works council or employee representatives.

Evaluation of the Working Time Act

On the instructions of the Ministry of Social Affairs and Employment (Ministerie van Sociale Zaken en Werkgelegenheid) an extensive survey was conducted into the evaluation of the Working Time Act in 2000 (Arbeidstijden in overleg? Evaluatie van de Arbeidstijdenwet, JWM Mewissen, R Knegt, W. Zwinkels et al, The Hague, Ministry of Social Affairs and Employment, 2001). The survey consisted of several subsurveys, including a poll among trade union organisations and employee participation bodies about the practical effects of the Act, a poll among individual employees and an analysis of collective agreements and collective bargaining.

Collective agreements

The analysis of collective agreements finds that the 'working hours, working on Sundays and working at night' cluster of issues has been dealt with in virtually all agreements. When a cluster is dealt with, this offers the opportunity for specific arrangements to be agreed at company level, at least insofar as the collective agreement offers the scope for this.

The survey finds that it is possible to make specific arrangements regarding working hours at enterprise level for 14% of the employees who are subject to a sector-wide collective agreement. A notable finding is that this 'negotiation scheme' is sometimes used at company level in a way not intended by the legislation. For example, some employers ignore the employee participation body, while others use the negotiation scheme without having established an employee participation body. The negotiation scheme is also sometimes used even if the collective agreement does not offer scope for this.

Initiative lies with the employers

The initiative to use the company-level negotiation scheme lies mainly with the employers. In many cases, the trade unions have opposed such initiatives, partly on the merit of the case or on grounds of ideology, and partly for reasons of a strategic negotiating nature. Furthermore, the unions in many sectors find that company-level negotiations are not developed to such an extent that works councils are capable of countervailing the employer's wishes. Finally, the unions are sometimes wary of setting a precedent for the sector concerned. However, this does not detract from the fact that the trade unions are increasingly prepared to delegate the regulation of working hours to negotiations at enterprise level.

Agreements with the works council/employee representation

Of the organisations that have a works council or employee representation (16% of the total number of organisations involved in the survey), 58% have reached written agreements on working and/or resting hours with the works council/employee representation. This was mainly the case in larger organisations and organisations with varying employment patterns. Usually the employees involved were consulted prior to the arrangements being made. The input of the works council/employee representation when reaching agreements varies. Usually, the employer's suggestions are adopted or amended. In only 5% of cases did the works council/employee representation reject the employer's proposals. In larger organisations, the works council sometimes submitted its own proposals.

In the remaining 42% of the organisations with a works council/employee representation, no agreements have been reached between the employer and the works council/employee representation. The reasons given for this were:

  • the collective agreement already offers sufficient scope;
  • working hours are fixed; or
  • there is no need to change the working and rest hours.

Evaluation of decision-making

The employers surveyed (87%) are more positive than employee representatives (74%) about the decision-making on working and rest hours. In 23% of cases, individual employees evaluate the activity of 'their' works council or employee representation in this area in a positive manner, while 7% have a negative judgment, with almost a quarter (23%) adopting a neutral stance. Almost a third (31%) have no opinion or gave 'don't know' as an answer. Less than a third of the employees surveyed are positive about the extent to which the works council/ employee representation involves them in the decision-making and one-third have no opinion on the matter.

The predominant impression is that the works councils mainly 'follow' in decision-making on working and rest hours. There are several reasons for this: lack of relevant knowledge; confidence in the management; and the acceptance of corporate interests. In most cases, the employer's proposals are approved, while in only 5% of cases do the works council/employee representatives reject a proposal. Occasionally, the works council then comes into conflict with the employees.

In a number of cases, the researchers questioned the countervailing power of the works council, particularly in organisations where the norms of the negotiation scheme are used as the point of departure without agreement having been reached with the employee representatives.

Government's response

Early in July 2001, the government responded to the Working Time Act survey (Parliamentary documents II 2000-1, 27 865, no. 1). It regards the partial failure of the negotiation scheme as a cause for concern in view of its central position in the Working Time Act system. These negotiations must therefore be revitalised, mainly by increasing the openness and transparency of employers' policy on working and resting hours.

Despite the shortcomings of the consultation process, the government stresses that 77% of employers were found to be satisfied with the norms of the Working Time Act. Furthermore, 57% of employee representatives believe that the Act offers sufficient scope to distribute work among employees. The government does not regard these figures as a reason to amend the Act's norms.

Commentary

A tacit assumption in the creation of the Working Hours Act was that employee participation bodies would be capable of weighing up the different objectives of the Act, including maintaining a basic level of employee protection.

A number of comments can be made with regard to this assumption. In the first place, not all organisations have appointed an employee participation body, not even where this is a legal requirement. Inadequate compliance mainly occurs in smaller organisations and is also concentrated in certain sectors such as construction and information technology. The guarantee provided by the Working Time Act in this context is that when there is no employee participation body (and if the condition that the collective agreement provides leeway is met), the employer cannot make use of the opportunity to use the negotiation scheme. However, the fact that some employers appoint an employee participation body 'for the time being' (ie apparently specifically for this purpose) is cause for concern.

What is more important, though, is the finding that many employee participation bodies do not appear to be adequately equipped to fulfil the role assigned to them. Insufficient knowledge, but also insufficient time and resources have a negative effect on employee participation bodies.

The statutory measures proposed by the government can hardly be called drastic. The question remains, however, whether more drastic measures are called for. While the works council has sufficient statutory instruments at its disposal, the problem would appear to lie in a general lack of decisiveness and contact with its members. When seen in this context, the instrument of policy measures would appear to be the more obvious choice. The government wants to provide better information as well as training and other useful instruments to improve knowledge of, and access to, the Working Time Act. In cooperation with the social partners, it is also the intention to determine which other instruments can be utilised to promote discussions about working and rest hours at enterprise level. (Robbert van het Kaar, HSI)

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