The Netherlands: Latest working life developments – Q3 2017

Unemployment figures at a six-year low, the minimum wage extended to contract workers, fines for work violations by employment agencies and sustainable employability of workers are the main topics of interest in this article. This country update reports on the latest developments in working life in the Netherlands in the third quarter of 2017.

Upward economic trends continue

Despite very positive developments in the Dutch economy, the purchasing power of low-income earners still lags behind that of other categories of workers. In order to address this imbalance, the government has allocated €425 million to fund tax breaks, and increases in care allowances and child-related benefits for low-income families. While employment figures, particularly for women, have risen, the number of children in day care has also soared, to 736,000 children in the second quarter of 2017, up 56,000 from 2016.

New group of workers entitled to minimum wage

As of 1 January 2018, around 60,000 additional workers will be entitled to the statutory minimum wage, following new measures proposed by Lodewijk Asscher, the then Minister for Social Affairs and Employment. These are workers who do not have an employment contract, but cannot (or will not) comply with the conditions of being self-employed. This is a vulnerable category of workers with a generally weak negotiating position, which often results in low pay.

High number of work violations 

The Dutch labour inspectorate (Inspectie SZW) has reported fining 131 temporary work agencies a total of €1.3 million for work violations in 2016, mostly due to the underpayment of temporary workers. The inspectorate, which checked 500 temporary work agencies, also focused on:

  • illegal or fictitious employment;
  • working time (including unpaid overtime);
  • labour exploitation;
  • tax evasion.

The sectors most affected were agriculture and horticulture, metalwork and industry, HORECA (the food service industry), retail, construction and cleaning. Inspectie SZW, together with the tax authorities and parties representing the temporary work agency sector, developed a checklist for companies recruiting temporary staff through temporary work agencies. This is to help companies assess whether they are employing these workers in a fair, healthy and safe way. The companies can use the checklist to assess the temporary work agency they use, and to see how they themselves can improve their relationship with temporary agency workers. Annually, around 770,000 temporary work agency workers are active in companies in the Netherlands, with approximately 12,000 temporary work agencies registered with the Chambers of Commerce (KvK).

Recent checks by Inspectie SZW among seasonal agricultural workers showed that those working for asparagus-growing companies were the most affected by violations, mainly for working time regulations. The inspectorate reported that 17 such companies, out of the 30 checked, were found to be in breach of the Dutch Working Time Act.

Promotion of sustainable employability of workers

In July 2017, Jetta Klijnsma, the then State Secretary for Social Affairs and Employment, launched an initiative aimed at helping workers to achieve a healthier, longer and sustainable working life. A total of €12.5 million has been made available for grants aiming, for example, at improving health and safety at work, good practices in employment and intersectoral labour mobility. The grants can be requested by (joint) social partner organisations in regions and sectors.

Commentary

In the third quarter of 2017, political parties continued talks on forming a new cabinet. The Third Rutte Cabinet – supported by four parties in Parliament – was sworn in on 26 October after a record 225 days of bargaining.

The new cabinet has started working under rather favourable socioeconomic conditions. It aims to modernise the labour market by seeking a new balance between security and opportunities (making permanent jobs less permanent, and flexi-work less flexible). In order to ‘make work pay’, taxes on work will be substantially lowered and the social partners are being asked to agree on wage rises and on modernising collective labour agreements (such as more specific agreements, with more freedom of choice and attention to sustainable employment). Payrolling (where a company chooses workers, but asks an agency to organise their pay and official documents) and zero-hour contracts – though good for creating flexibility for employers and for clients – should not be used to compete on working conditions nor function at the expense of labour market opportunities for workers.

It is planned to bring in new regulations to deal with bogus self-employment. Attention will also be directed to a reduction of problematic debts and poverty by improving debt-counselling services. Efforts in the EU will continue to focus on ensuring a level playing field for companies and workers in order to prevent competition on pay and related working conditions between workers from different Member States. ‘Equal pay, for equal work, in the same place’ remains the guiding principle.

In close cooperation with the social partners, the cabinet plans to modernise the (capital-funded) Dutch old-age pension system, thereby achieving more personalised pension assets while retaining strong elements of the present system (such as obligatory participation, collective risk-sharing and fiscal support). Proposals on these can be expected soon.

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