Social partners agree on 3% general wage increase

In July 2006, a collective wage agreement stipulating an average increase of 3% was secured. Although this was higher than that agreed in 2005, the overall increase can be considered relatively low. The difficult labour market situation has not tempted the trade unions to demand higher wage requirements. In 2005, the number of strikes doubled compared with the total number of strikes recorded in 2004 and industrial unrest continues into 2006.

Increasing strike action

In 2005, a total of 28 strikes were held, resulting in the loss of 42 work days. There were twice as many strikes in 2005 than in 2004, which represents the highest number of strikes since 1991. However, fewer days were lost due to strikes in 2005 than in 2004. One in three strikes was related to the collective labour agreement (CAO) negotiations, in particular in industry and commercial services. One fifth of the strikes concerned issues unrelated to the CAO agenda. The conflicts focused on the reorganisation and loss of jobs due to the closure of establishments, shifting of production and competition from ‘cheaper’ labour. Eleven of the 28 strikes were, in principle, unofficial strikes; the trade unions only got involved in the conflict afterwards. It was expected that the number of strikes would decline in 2006.

Nevertheless, the labour unrest has continued into 2006. Industrial action took place, for example, at various companies in the port of Rotterdam. At the beginning of May 2006, strike action was held at the port-based terminal company AEBT in protest at the need for a better collective labour agreement. In the same month, some 300 employees staged a two-week strike at ADM Europoort before a more favourable collective labour agreement was secured. There was also considerable unrest at the Albert Heijn supermarket chain during the summer months.

Wage demands

The trade unions demanded a wage increase of 3%, but the employers were against such an increase. Following further protest action and with the threat of additional action looming, the social partners eventually agreed on a wage increase of 3% at the end of July 2006. The wage increase will come into effect retroactively from 1 April 2006 and has been agreed for a period of one-and-a-half years.

Although the wage demands and increases in 2006 can be considered moderate, they are higher than those agreed in 2005. While the wage increase was 0.7% in the summer of 2005, since then there has been an increase of almost 2%, as reflected by the wage demands at the Albert Heijn supermarket. Much of the negotiations in 2005 were focused on addressing and supplementing the statutory changes that the government had implemented: pre-pension, life course schemes and sickness benefit were three critical areas that required additional regulation and financing. As a result, there was little scope for wage demands. In 2006, the more moderate attitude of the trade unions has been maintained, even though the labour market situation is becoming more difficult.

Views of the social partners

The Allied Industry, Food, Services and Transport Union (FNV Bondgenoten), affiliated to the Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV), believes that employment is a more important issue than wage demands. Moreover, the union does not want to endanger the link between wages and benefits; the issue of pensions is another matter for concern. FNV Bondgenoten wants to retain indexing, and this requires adequate funding. A survey among the union’s members shows that they support the union’s policy: job security ranks highest for the majority of members as does greater certainty with regard to pension levels. The union is demanding a 2% wage increase, which is 0.5% above the level of inflation.

Meanwhile, employer representatives such as the General Industrial Employers’ Association (Algemene Werkgevers Vereniging Nederland, AWVN) have indicated that they would prefer to make wage increases incidental rather than structural, expressing their preference for performance-related remuneration. In general, FNV Bondgenoten has become more accustomed to the idea: the union is not against incidental bonuses and is even willing to talk about the proposal for performance-related remuneration. However, according to FNV Bondgenoten, the biggest union in the market sector, a structural wage increase must first be secured to at least compensate for inflation; they are also demanding a further 0.5% increase to compensate for the effects of the government’s policy on health insurance.

Marianne Grünell, Hugo Sinzheimer Institute (HSI)