Disability insurance reform proves divisive

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Following the recent report of the Donner committee on the modernisation of the Dutch disability insurance system (WAO), the tripartite Social and Economic Council (SER) was due to advise the government on possible reform measures. However, before the SER had given its opinion, in summer 2001, two of the three parties in the coalition government, VVD and D66 joined with the opposition CDA in submitting a legislative proposal on the issue to parliament. This proposal would allow employers to dismiss employees who are off sick if the latter do not cooperate in finding ways to return to work. The other coalition party, the PvdA, immediately presented a counter-proposal requiring employers to take additional measures in this area. The trade unions are threatening to boycott the SER discussions on the issue if the government accepts the VVD-D66-CDA proposal.

In summer 2001, two of the parties in the coalition government - the liberal Party for Freedom and Democracy (Vereniging voor Vrijheid en Democratie, VVD) and the social liberal Democraten 66 (D66) - together with the opposition Christian Democrats (Christen Democratisch Appèl, CDA) submitted a legislative proposal to the Lower House of parliament which would allow employers to dismiss employees who are off sick if the latter do not cooperate in finding ways to resume work. This would mean limiting the legal employment protection currently provided during the first two years of absence from work through sickness and disability. Under the proposal, if an employee refused suitable work, the employer could dismiss him or her without first applying for permission from the subdistrict court, with only permission from the Employment Office required. The employee would, however, have the opportunity to contest the dismissal in court. The largest coalition party, the social democratic Labour Party (Partij van de Arbeid, PvdA), considers the proposal a direct attack on the legal position of employees, and countered with its own proposal in which employers would be obliged to comply with even stricter measures to help employees return to work.

The background to these developments is the recent report of the Donner committee on the modernisation of the occupational disability insurance (WAO) system (NL0105131F). The committee made a range of recommendations aimed at cutting the number of people claiming WAO benefits - currently nearly 1 million. The essence of the proposals is that only those employees who are, and remain, completely disabled should be eligible for WAO benefits. Employees who are partially disabled or have an illness of a temporary nature should remain bound by their employment contract with their employer. The employer should bear the responsibility of finding or creating an appropriate position for such partially or temporarily disabled employees. This can be a job in the company concerned, adapted to the employee's capabilities, or another job in a different company. The employee should be actively involved in the reintegration process and be required to accept a different suitable job, as long as the pay is at least 70% of their last-earned wage. If disability were to last for two years, and employer and employee efforts did not result in securing a new job, or if the employee did not contribute sufficiently to the reintegration process, he or she could be dismissed. In this case, employees could apply for benefits under a new unemployment benefit scheme. If the employer had not done enough to reintegrate the employee or find alternative work, it would be required to continue paying the employee's wages for longer than two years.

Both the VVD-D66-CDA proposal and the PvdA proposal are accentuated versions of recommendations in the Donner report, but arguably taken out of the context of the overall package of recommendations. For example, the VVD-D66-CDA proposal focuses on employees' duties, while the the Donner proposal also recommends increasing the responsibilities on employers.

The politicians appear to be drawing up proposals based on parts of the Donner report, without awaiting the opinion of the tripartite Social and Economic Council (Sociaal Economische Raad, SER), which is to advise the government on new measures based on the report. The social partner representatives and independent members on the SER are seeking to reach consensus on the issue, though the trade unions have already expressed serious doubts. Nevertheless, they are doing their best to reach an agreement, since consensus and clarity are regarded as badly needed in the WAO debate.

The Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV) has called for the withdraw of the VVD-D66-CDA proposal pending the SER recommendation. FNV stated that the potential dismissal of sick employees outlined in the Donner report is accompanied by guarantees on suitable work, review of the dismissal and entitlement to unemployment benefits. These guarantees are not to be found in the legislative proposal. FNV and the Christian Trade Union Federation (Christelijk Nationaal Vakverbond, CNV) are threatening to walk away from the SER discussions should the cabinet accept the VVD-D66-CDA proposal. It had been agreed that the cabinet would take a position on the issue once the SER recommendation had been issued, and only then would debate in the Lower House follow. The PvdA feels politically sidelined by its coalition partners' alliance with the CDA on this topic, and will not be pleased if this initiative upsets the potentially shaky consensus between the social partners in the SER. Although the State Secretary for Social Affairs, Hans Hoogervoorst of the VVD, is not actively opposed to the VVD-D66-CDA proposal, he is taking no position while awaiting the SER recommendation.