Exemptions from the statutory national minimum wage dropped

A bill that would have allowed employers exemption from the statutory national minimum wage in the Netherlands was withdrawn for political reasons in May 1997. Although both trade unions and employers' organisations had been critical of the proposed regulation, the employers' organisations were nonetheless disappointed.

On 7 May, the Dutch Government withdrew a bill that would have allowed employers exemptions from paying the statutory national minimum wage (NL9702103F). Discussions in Parliament had arrived at a political impasse.

The measure had been proposed as a way to increase the chances for the long-term unemployed to find full-time jobs, but it had proved controversial from the start. In 1995 the Social and Economic Council (Sociaal-Economische Raad, SER- a central advisory body of tripartite composition) had opposed the introduction of possible exemptions, questioning the effectiveness of the proposed regulations. However, the Minister of Social Affairs and Employment disregarded the SER's position since exemptions had been included in the 1994 agreement establishing the coalition Government. At that time, the political parties involved had reached a compromise on this politically sensitive issue, but only with great difficulty. The Liberals (VVD) had argued for the abolition of the statutory minimum wage, whilst the Social Democrats (PvdA) had strongly opposed abolition. As a compromise, temporary dispensations from the minimum wage were agreed upon.

Debates in Parliament focused on the question of whether a long-term unemployed person could be forced to accept work that paid less than the statutory minimum wage. Taking into account the level of the guaranteed minimum income, it was asserted that long-term unemployed people who were single could be forced to participate, but that "bread-winners" and single parents could not. However, according to the Progressive Liberals (D'66), this was in conflict with the principle of equal treatment. Initially, D'66 argued that every long-term unemployed person should be obliged to accept work. This opinion was shared by the VVD, which had already proclaimed the regulations as a right-wing liberal victory. Temporary dispensation would mean the first step towards abolition of the minimum wage. This conservative-liberal image gave cause for a radical change of position on the part of D'66: it should not be compulsory, but rather voluntary. By adopting this position, D'66 started to play the PvdA's game. This impasse in Parliament forced the Government to withdraw the bill.

In a reaction, Mr Blankert, the chair of the Dutch Employers' Confederation (VNO/NCW), expressed his disappointment. Earlier this year, he had called on the unions and the Government to "leave the trenches"' and, together, agree upon a pact against unemployment. Mr Blankert now believes that such deliberations are doomed to fail, considering that the political parties have, once again, taken their positions. The Dutch Federation of Trade Unions (FNV) believes that the level of the minimum wage is not an obstacle to promoting employment.

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