Social partners demand place in reorganised social security administration

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In November 1999, the Dutch government proposed calling a halt to the privatisation of social security and excluding the social partners from participating in its administration. The initiative unleashed harsh criticism from the social partners and outraged the trade union confederations. While unions announced plans for large-scale demonstrations, efforts to reach a compromise took place behind closed doors.

In November 1999, the Minister of Social Affairs submitted a proposal regarding the new structure and administration of the social security system, which rules out complete privatisation. Two years previously, the minister's predecessor started an initial round of social security privatisation related to the payment of unemployment and disability benefits as well as job placement, areas in which employer and employee representatives play a key role in administration (NL9807188F). In early 1999, the Social and Economic Council (Sociaal Economische Raad, SER) submitted a proposal to privatise only part of the social security system, in which the dispensation of benefits would be completely privatised, but allocation would remain in government hands. However, both the Lower House of parliament and the social partners attacked the proposal, claiming that the private and public segments would try to pass off responsibilities to one another, thus leaving beneficiaries in limbo. Next, the SER drafted an entirely different model whereby both implementation and allocation would be privatised. The minister's response now puts the entire system back into the public domain, and excludes the social partners from participating in its administration. Job counselling and placement, however, will be left to the market. Conceding that "clarity is better than pseudo-privatisation", the Lower House accepted the minister's proposal; the social partners, on the other hand, are thoroughly opposed. In their eyes, this places the entire Dutch "polder model" of consultation and dialogue at stake. The chair of the FNV trade union confederation, Lodewijk de Waal, announced plans for large-scale protest demonstrations

Social partners' reactions

In the current situation, the social partners participate with the Minister of Social Affairs to administer employment policy, job placement and social security benefit implementation. The cabinet's new plan assigns social security implementation to a government department, and the social partners, along with municipalities, would participate in an advisory board only on matters regarding job placement, while the minister would still be responsible for appointing an administrative board. The trade unions, including both the two largest confederations, FNV and CNV, consider the proposed advisory role for the social partners as insufficient. The unions want to continue exerting direct influence, both in job placement and in social security implementation. The employee representatives are now threatening to step down from the existing social security and employment policy administrative boards and, in the third week of November, postponed their regular meeting with the Minister of Social Affairs. In a rush to reach yet another compromise, many meetings and negotiations have since taken place. But what exactly does the social partners' contribution mean?

In the media, the trade unions' opposition to the most recent cabinet proposal is depicted mainly as a power struggle. The position adopted by employer and employee representatives reflects their past history of tending to use disability benefits in particular as a bargaining chip to smooth over company reorganisations. From this perspective, the proposed marginalisation of the social partners can arguably be seen as basically justifiable. The trade unions, however, defend their steadfast position, stating that negotiations with employers and the government on reintegrating benefit recipients, including the more vulnerable groups such as minorities, women and disabled people, would, under the new system, no longer be possible at the level of the social security administration. Collective bargaining on this matter is too limited, and employers can side-step the issue too easily. In short, policy regarding these points will have to be traded off as part of negotiations, which would consequently jeopardise continuity. The short-term interests of employers and municipalities would have the upper hand in the administration of social security. Moreover, this is a matter of managing financial resources raised by the employees themselves through contributions and premia. As agents representing employees, the trade unions have administered employee insurance for years, but now face the prospect of being pushed out of the picture entirely. Finally, the trade unions view the structural concept of a single advisory body representing both national and regional levels as ineffective, nor do they want seats to be allocated in such a manner that the social partners fall into a minority alongside crown-appointed members and municipal representatives.

Involvement necessary

Flip Buurmeijer, the chair of the National Institute of Social Insurance (Landelijk Instituut Sociale Verzekering, LISV), which currently coordinates implementation of unemployment and disability benefits, is mystified at the cabinet's apparent complete disregard for employer and trade union involvement in labour policy and social security. Mr Buurmeijer, who led the parliamentary investigation into possible mismanagement in the social security system in the early 1990s, now concludes that the social partners' role is essential in certain areas, although he does draw a clear distinction between administration and direct implementation. He sees the partners' expertise at an administrative level as indispensable, and views their involvement in preventing occupational disability and finding jobs for unemployed and partially disabled individuals as necessary. Although Mr Buurmeijer considers the minister's plans clear and consistent as a whole, he is puzzled by the exclusion of the social partners. Ten years ago, their involvement with new employment agencies was critical to a plan otherwise doomed to fail. He agrees that while employers should theoretically be held responsible for finding new jobs for employees rendered unable to work, that concept does not mesh with reality. Many employers in small businesses cannot assume that responsibility, and individual employees do not have adequate means to exercise power, which should be jointly organised by the trade unions and employers.

The chair of LISV also proposed a compromise designed to bring the minister and social partners closer together. He wishes to see the social partners and municipalities represented in the administrative bodies, along with increasing the role of the advisory board, which includes employers and employees. The advisory board should have the authority to make decisions regarding funds earmarked for providing job assistance to unemployed and partially disabled people. This authority would be an extension of exercising control over spending resources to reintegrate disability recipients. Here, Mr Buurmeijer also wants employers and employees to work together (reintegration will be carried out by private organisations).

Following an initial lack of response in the Lower House, reactions to the commotion over the government plans were subsequently forthcoming. Ad Melkert, chair of the socialist PvdA party, now demands a central role for the social partners in the social security funds, whereas the liberal VVD party expressed annoyance with the criticism of the plans. The prime minister decided to adopt an intermediary role.


The uproar surrounding the involvement of the social partners nearly conceals the core of the Minister of Social Affair's proposal. In the Netherlands, reintroducing public responsibility for social security is a historical step of significant relevance for the beneficiaries involved. As always, increased bureaucracy poses a threat, but the proposal makes it clear that privatisation is not the only answer to this problem. A clearly defined administrative system, integrated provision of services and commercial involvement must succeed in bridging the gap between receiving benefits and resuming work. Concerning the commotion surrounding the involvement of the social partners, it is to be foreseen that their place will again be at an administrative level in order to allow their participation in shaping policy on employment, reintegration and social security. (Marianne Grünell, HSI)

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