1997 Annual Review for The Netherlands

This record reviews 1997's main developments in industrial relations in The Netherlands.


The Dutch economy continued to develop favourably in 1997. The level of economic growth stood at 3.3%, which is higher than the EU average. Although inflation in the Netherlands, at 2.2%, was considerably higher than the EU average, it was fairly stable. The General Government Financial Balance for 1997 was -2.0% of GDP (NLG 14.2 billion - ECU 6.4 billion). Eurostat put public debt at 72.1% of GDP. Unemployment decreased significantly again in 1997, and the number of unemployed persons stood at 336,000 (6.4%) in the last quarter of 1997.

The current Government is a "purple" coalition, composed of the Labour Party (Partij van de Arbeid, PvdA), the liberal People's Party for Freedom and Democracy (Volkspartij voor Vrijheid en Democratie, VVD) and the social democratic Democraten 66 (D-66). New elections for the Second Chamber of Parliament are due in May 1998.

Key trends in collective bargaining and industrial action

In mid-November 1997, the social partners represented in the bipartite consultative Labour Foundation (Stichting van de Arbeid, STAR) reached a new agreement on the future agenda for collective bargaining (NL9711148N). This agreement reaffirms the importance of wage moderation and of enhancing the "employability" of the labour force. Although this is in line with government policy and contributes to the preservation of the so-called Dutch "consultation economy" (NL9710137F), the first rounds of collective bargaining since the agreement have been progressing with difficulty (NL9801157N). Training and wage demands (NL9801155N) appear to be the main stumbling block (NL9802160F).

Strikes remained rare in 1997. With the exception of disputes in the docks (NL9711146N), industrial action appeared to occur mainly in the public sector - workers in both the national railways and regional transport companies took action in protest against deregulation and privatisation plans. The year also saw industrial action taken by public employees in public transport and refuse collection in some cities in support of claims for higher wages by workers recruited on several job-creation schemes (NL9712153N)

Industrial relations, employment creation and new forms of work organisation

Employment in the Netherlands is growing rapidly, and exceeds the rate of job creation in other European countries (about 1.4% a year in recent years, as opposed to a European average of 0.4%). It is expected that high job-growth will continue in the years to come. Women, young people and long-term unemployed people have also benefited from these developments. Subsequently, the inactivity/activity rate has changed significantly: from 81.3% in 1992, to 76% expected for 1998.

In accordance with agreements reached at the Luxembourg special Employment Summit in November 1997, the Dutch Government has drafted a national action plan to implement the EU employment guidelines for 1998. This plan emphasises the concept of employability. (A recent example of EU-inspired (and partly EU-financed) policy in this area is the "Employment Pact" concluded by three Dutch provinces (Noord-Brabant, Limburg and Flevoland) on 20 February 1998).

Dutch job-creation policy operates on two fronts. The first concerns direct job creation for target groups. The most prominent measures in this area are: (1) The Guaranteed Youth Employment Act (Jeugdwerkgarantieplan); (2) The National Labour Pool (Rijksbijdrageregeling Banenpool); (3) The Additional Employment Measure for Long-term Unemployed People (Additionele werkgelegenheidsmaatregel voor langdurig werklozen) commonly known as the "Melkert 1 " measure; and finally (4) The" Melkert 3" measure which aims for the social reintegration of disadvantaged long-term unemployed people through volunteer work. Wage subsidies comprise the second front of Dutch employment creation policy. As of 1998, the job creation schemes are now incorporated in the Job-seekers Deployment Act (Wet Inschakeling Werkzoekenden).

As in other countries, flexibilisation of the labour market is a key issue in the Netherlands. In 1996, the Government launched proposals for a new law on flexibility and security. These proposals were then elaborated on by the STAR, which provided the basis for proposals for legislative reform which were submitted to parliament in 1997 (NL9706116F). The Second Chamber (or Lower House) of Parliament accepted the proposals (after discussion and amendments) on 18 November 1997. In early 1998, the proposed legislation was being discussed by the First Chamber.

The flexibility and security initiative concerns amendments to dismissal law and the repeal of the permit system for temporary employment agencies, in order to enhance labour market flexibility. At the same time - and this is where the "security" element comes in - "atypical" employees (particularly temporary agency workers) are given a stronger position in terms of job security and social security (NL9711144F).

In practice, trade unions and employers are already involved in discussing new forms of work, which are thought to follow a trend from job security towards "employment security". A prominent example is the so-called "job pool". This is an organisation that allocates workers within a "pool" to a company or a cooperative structure of several companies (within a certain region or sector), depending on the actual demand for labour. Job pools aim at enhancing the employability of workers, while at the same time promoting organisational flexibility and protecting employment. The number of job pools is increasing rapidly in the industry and service sectors. This development notwithstanding, existing job pools for the Amsterdam and Rotterdam docks faced serious difficulties in 1997, partly as a result of technological advances. This led to industrial action and protests by the dockworkers (NL9711146N).

Temporary agency work has continued to grow in the Netherlands (NL9711144F). The same is true for part-time work, even though Dutch levels of part-time working were already unparalleled in Europe. A proposal for a legal right to work part time (ie a right to reduce one's working hours), which clearly exceeds the new EU Directive on part-time work adopted in December 1997, was (rather surprisingly) rejected by the First Chamber of Parliament in 1997 (NL9712152N). However, new initiatives were announced subsequently (NL9803164F).

Developments in representation and the role of the social partners

A bill revising the Works Council s Act (Wet op de ondernemingsraden) was debated by Parliament in 1997 (NL9709130F) (and adopted by parliament on 10 February 1998 - NL9802162N). The new legislation contains no fundamental changes. Under the new system, employees who are employed for less than a third of normal working time are no longer excluded from consideration for the purposes of the establishment (and certain rights) of work councils. As a consequence, more companies will be bound by this law. On the other hand, only employers with at least 50 employees (instead of 35) must establish a works council. Companies with fewer than 50 employees are, depending on their size and the view of the majority of employees, either required to establish a new type of standing forum for employee representation, or free to do so.

The new Act also reinforces the participation rights of temporary workers. A further example of administrative modernisation is the explicit option in the law to allow agreements to be struck between the works council and the employer. This fits in with the trend towards the decentralisation of labour relations. Nevertheless, trade unions will continue to play the most important role with respect to the determination of the terms of employment (NL9703106F).

On 5 February 1997, the European Works Councils Act (Wet op de Europese ondernemingsraden) took effect, transposing the 1994 EU Directive into Dutch law (NL9706117F). The Dutch legislation has extended the provisions of the Directive slightly - for example, EWC members are granted the right to training. About 100 multinational companies which have their headquarters in the Netherlands are now subject to the EWC legislation. Prior to the Directive coming into force in September 1996, 20 "Article 13" (ie pre-exemptive) agreements were concluded in Dutch-based multinationals, while about five "Article 6" agreements have been reached since the Directive came into force (ie agreements covered by Dutch law).

1997 saw preparations for the merger of four trade unions (representing workers in industry, services, transport and food) affiliated to the Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV), which were already cooperating in a federal association (NL9711145F). The decision was finalised in early 1998. The new union, FNV Bondgenoten (Allied Unions) has almost half a million members. For the first time, people drawing benefits and older people are incorporated into the organisation as a distinct category. The decision to combine forces is aimed at promoting the interests of the members. The new union is expected to be better equipped to formulate a response to changing labour relations, including the decentralisation of negotiations on terms and conditions of employment. For that purpose, the new union intends to strengthen its position within companies and work in close cooperation with works councils.

Industrial relations and the impact of EMU

Wage moderation is a key issue in the preparations for EMU. As indicated above, this issue pervades collective bargaining and central policy-making.

Conclusions and outlook

In general, one can perceive a shift in the collective bargaining agenda. In the past, wage moderation was usually traded off for shorter working hours, but now unions have put training issues and workloads squarely on the agenda, while the employers wish to increase flexibility and performance-based pay (NL9712149F). Collective bargaining remained difficult in early 1998 over employers' wishes for separate contracts for specific categories of employee - which unions believe will increase working hours - and for flexible pay schemes (NL9803166N).

Without a doubt, working time matters, including various types of leave, will again become major issues in 1998 for the Government, the social partners at the central level, the collective bargaining parties and individual companies. An example is the proposal for a new Career Break Leave Financing Act (Wet financiering loopbaanonderbreking) (NL9705115N).

The merger decision by the four unions making up FNV Bondgenoten is expected to stimulate more intensive cooperation between the other Dutch trade unions.

(Tom Wilthagen, HSI)

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