Industrial action and end to pay freeze loom following early retirement deadlock

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June 2004 saw the breakdown of tripartite talks in the Netherlands over new arrangements for early retirement and a 'life-span regulation', enabling workers greater scope to save and manage periods of time off over their careers. With the government now intending to continue with its own plans, the trade unions have decided to organise industrial action in support of their position. Furthermore, as the 2004-5 pay freeze agreed in autumn 2003 was dependent on a settlement of the early retirement/leave issue, the unions have stated that they will no longer be bound by it.

In autumn 2003, as part of a deal that included a pay freeze for 2004-5 (NL0310103F), the Dutch government and social partners agreed to talks over the former's proposals for new arrangements for early retirement and a 'life-span regulation', enabling workers greater scope to save and manage periods of time off over their careers (NL0304103F). Consensus over such a scheme was regarded as a prerequisite for maintaining the pay freeze. However, after lengthy and difficult negotiations, no agreement was reached at a tripartite meeting on 18 May 2004 (NL0406102F). A key sticking point is the extent to which early retirement/leave arrangements should be collective or individual. The government wants an individually-based arrangement with an option for workers to opt out. The trade unions prefer a collective approach, fearing that many young people will opt out of an individual early retirement/leave scheme and thus cut support for the scheme below viable levels. Employers backed the standpoint adopted by the government.

The Dutch Trade Union Federation (Federatie Nederlands Vakbeweging, FNV) and the Christian Trade Union Federation (Christelijk Nationaal Vakverbond, CNV) held a membership referendum at the end of June 2004. This found that the vast majority of union members support the standpoint adopted by the federations. This rejection of the government’s proposal means a definitive breakdown of the consultations. Now that it seems clear that a compromise cannot be reached, the government intends to return to its original intention to do away with all tax advantages currently associated with early retirement.

In this new situation, the trade union movement now intends to place pressure on the government and employers' organisations by means of industrial action and political demonstrations. The FNV chair, Lodewijk de Waal, has announced that strike funds will be released for various actions, culminating in a nationwide strike in October 2004. FNV has asked CNV to join it in this course of action. While the CNV chair, Doekle Terpstra, has agreed to join in, he regards the actions planned for October as being too late. CNV would rather engage in industrial action before the Lower House of parliament takes its summer recess.

Despite this pending industrial action, the government appears resolute about its intention to make early retirement unattractive in terms of possible tax advantages. On 25 June, the cabinet approved a legislative proposal to establish a new tax framework to deal with matters related to early retirement and life-span leave arrangements. The new system should take effect from 1 January 2005. Between 2006 and 2011, tax deductions for contributions to early retirement schemes will be cut to half the current level, after which this practice will be scrapped altogether.

In view of the fact that the government is standing firm over its plans, the trade union movement has announced its intention once again to include wage demands in forthcoming collective bargaining rounds. As noted above, it was agreed in autumn 2003 that a wage freeze would be maintained over 2004-5 on condition that a compromise could be reached on early retirement and life-span leave. Since this has not been achieved, the unions no longer feel bound by the commitments made in the autumn 2003 talks. In response to this, Aart Jan de Geus, the Minister for Social Affairs and Employment, has announced that collective agreements containing wage increases will not be declared generally binding (NL0211104F) across the sector in question.