Government plans for 2005 meet fierce resistance

Download article in original language : NL0410101NNL.DOC

On 21 September 2004, the Dutch government presented its plans for the coming year. The proposals have proved controversial, especially those relating to early retirement, occupational disability insurance and compensation for dismissal. Employers are critical and the trade unions have stepped up their campaign against the government’s policy.

On 21 September 2004 ('Budget Day', or Prinsjesdag), the Dutch government - a coalition of the Christian Democratic Appeal (Christen Democratisch Appel, CDA), the liberal Party for Freedom and Democracy (Vereniging voor Vrijheid en Democratie, VVD) and the social liberal Democraten 66 (D66) - presented its plans for the coming year. Against the backdrop of an ailing Dutch economy, the plans include a number of far-reaching measures. The total sum to be raised by way of planned cutbacks and additional public income amounts to EUR 19 billion. The budget's most important measures in the area of industrial relations and employment include the following:

  • a wage freeze for civil servants in 2005;
  • splitting the current Occupational Disability Insurance Act (Wet op de arbeidsongeschiktheidsverzekering, WAO) (NL0404101N) into two separate items of legislation - one covering people who are disabled either completely or for a long period of time, and one for people still capable of working to some extent. Entry criteria will be tightened in comparison with the existing WAO;
  • tightening the eligibility requirements for unemployment benefits. From 1 January 2005, employees will need to have worked for 39 of the preceding 52 weeks to be eligible;
  • from 1 January 2006, making early retirement schemes accessible only for employees who were 57 or older a year earlier. Other employees will be able to save towards early retirement based on a newly created 'life-span leave' arrangement (levensloopregeling) (NL0409105F); and
  • making 'golden handshake' payments to dismissed employees deductible from these workers' subsequent unemployment benefits.

Employers' organisations have called on the government to make concessions on a number of points, notably maintaining current dismissal compensation rules and allowing for a broader transitional arrangement with respect to early retirement. Employers fear that these topics will otherwise reappear during forthcoming collective bargaining rounds. Some parties in the ruling coalition would also like the government to modify its policy with respect to these points.

The trade union response to the government plans has been extremely negative, and the unions have stepped up their existing campaign against the government’s policies (NL0409102N). On the day before Budget Day, the trade union movement organised a demonstration in The Hague. Around 30,000 people participated, a level of support that exceeded expectations. Spontaneous strikes were held at a number of companies, including the port of Rotterdam and the bus transport company in The Hague. More strikes are expected to follow in the coming months.

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment