Thematic feature - collective agreements on changes in work organisation
This article gives a brief overview of collective bargaining on changes in work organisation in the Netherlands, as of September 2004. It looks at: the extent to which collective agreements introduce changes in work organisation that take into account productivity demands, flexibility and security in an integrated way; the main areas in which changes are being introduced; the overall success or otherwise of bargaining on the topic; and the prospects for the future.
The EU’s European employment strategy was revised in 2003 (EU0308205F), following demands for a more results-oriented strategy contributing successfully to the targets for more and better jobs and an inclusive labour market set at the Lisbon European Council in 2000 (EU0004241F). To support the three objectives of full employment, quality and productivity at work and cohesion and an inclusive labour market, the current employment guidelines identify 10 priorities ('commandments'), including one on 'promoting adaptability of workers and firms to change'. This identifies work organisation (alongside skills, lifelong learning and career development, gender equality, health and safety at work, flexibility and security, inclusion and access to the labour market, work-life balance, social dialogue and worker involvement, diversity and non-discrimination, and overall work performance) as an element in improved quality at work, which should be pursued through a concerted effort between all actors and particularly through social dialogue.
The 2004 Council Recommendation on the implementation of Member States’ employment policies provides for four priorities:
- increasing adaptability of workers and enterprises;
- attracting more people to enter and remain on the labour market, making work a real option for all;
- investing more and more effectively in human capital and lifelong learning; and
- ensuring effective implementation of reforms through better governance.
The Recommendation refers to promoting flexibility combined with security in the labour market, by modernising and broadening the concept of job security, maximising job creation and raising productivity. As defined in the employment guidelines, 'job security' refers not only to employment protection but also to building people’s ability to remain and progress in work. Changes in work organisation thus appear to be seen as a main vehicle for increasing the adaptability of workers and enterprises. Related to this issue is flexibility and security in the labour market and the relative attractiveness of 'standard' and 'non-standard' employment relationships (with the aim of avoiding a 'two-tier' labour market).
With work organisation playing an increasingly important role in European employment policy, in September 2004 the EIRO national centres were asked, in response to a questionnaire, to give a brief overview of the industrial relations aspects of the topic, looking at: the extent to which collective agreements introduce changes in work organisation that take into account productivity demands and flexibility and security at the workplace in an integrated way; the main areas in which changes are being introduced; the overall success or otherwise of bargaining on the topic; and the prospects for the future. The Dutch responses are set out below (along with the questions asked).
Recent agreements on changes in work organisation
Please provide information on recent developments (over the last three-five years) in collective agreements on work organisation that introduce changes in flexibility, security and productivity in an integrated way. The kind of issues that such agreements might cover include: introducing autonomous (or semi-autonomous work) teams; reducing the number of hierarchical layers; new forms of employee involvement; reorganising work functions; moving away from product-based structures to business unit; flexible working hours; multiskilling; job rotation; improving training (eg making it more systematic, ensuring wider participation, or changing the focus); new pay systems (eg performance-based pay, profit-sharing, share ownership schemes), and new financial and non-financial performance measures; or new appraisal systems.
The kind of agreements that we are interested in here are those that deal with a number of the issues listed above as an overall 'package'. Please provide any overall information available on this kind of development, if possible, and brief details of three or four agreements (at company and/or sectoral level) that you consider particularly innovative and interesting. Below is an indicative list of the kind of information we are seeking.
What are the main aims of bargaining on work organisation - eg increasing productivity? Increasing personnel flexibility? Improving the company’s position in the market? Avoiding redundancies and lay-offs?
The main aims of such agreements (see Aan de slag met slimmer werken[Starting to work smarter], Geert de Bruin, Michiel Donners, Bas Vermeulen and Fredy Peltzer), depending on the situation, seem to be: increasing flexibility of working time/production time; avoiding redundancies by increasing employability; and reducing absence due to sickness by improving working conditions
What is the extent of bargaining on work organisation - how many agreements are there? How many companies/employees are covered?
Integrated bargaining work organisation-related issues can be found mainly at company level, which means that the number of employees covered will be limited. No overall figures are available on this issue. However, some indications can be found in the biannual report on collective agreements from the Labour Inspectorate (Arbeidsinspectie), although the different issues are treated separately. For example, in two collective agreements, merit pay has been linked to a reduction of absence due to sickness. In 86% of the collective agreements (covering 78% of the employees) arrangements on a 'motivating remuneration policy' can be found. In 15 of these agreements there is an explicit link between increased availability/employability of the employee and remuneration.
What are the main areas in which changes are being introduced - eg new organisational structures, new more flexible and less hierarchical methods, new corporate cultures, new business practices, more training, new performance measurement techniques, new reward systems?
The main areas of change seem to be: flexibility of working time; employability linked to avoidance of redundancies/work security (not job security); employability linked to remuneration. New organisational structures and more flexible and less hierarchical methods are usually not negotiated with trade unions, but discussed with the works council. New corporate cultures are usually introduced unilaterally by management.
In the context of the introduction of work organisation changes, what kind of contractual and working time arrangements are provided - ie how is the flexibility and security issue being addressed?
The 1996 Working Time Act allows for considerable flexibility in working time arrangements, on the condition that employers reach an agreement with employee representatives or in their absence, with individual employees. The element of 'security' for employees thus has a procedural character.
In the context of work organisation changes introduced with a view to improving productivity, what specific measures have been agreed?
Examples of agreed changes seeking to improve productivity include a lengthening of 'machinery-time' (eg introducing second or third shifts) or flexible working time arrangements accompanying peaks and troughs in demand (eg seasonal variations in the production of beer or ice-creams).
What are the motives of the parties in concluding such agreements - please indicate the motives of each side (management and workforce), such as reducing costs, promoting flexibility, securing employment, preventing compulsory redundancy, or improving terms and conditions.
The motives of management in negotiating agreements are manifold, dependent on the specific organisation. A major motive is the introduction of flexible working time arrangements. Other motives include reducing absence due to illness, increasing productivity and increasing the availability/employability of employees. A major motives of trade unions is avoidance of redundancies and an increase in 'work security'.
Usually the initiative lies with management, while unions sometimes at first show some reluctance to negotiate such agreements. The bulk of the negotiations/agreements can be found in organisations with a relatively cooperative industrial relations history.
Examples of relevant agreements
At Corus Nederland BV (part of the Corus steel group) a collective agreement signed on 1 February 2002 (originally valid until 31 March 2004 but since extended by 10 months) contains an extensive 'side-agreement' on employment. According to this so-called employment pact, the parties acknowledge that the only way forward is to introduce (further) new technologies and concentrate on products with a greater added value. According to Corus, employment will probably decrease further, while the unions definitely consider this to be possible. According to the pact, Corus will do its utmost to avoid forced redundancies and try to find other jobs for redundant employees. Both parties stress the need for an increase in the employability of the employees. To achieve the aims of the pact, a bipartite structure has been created, which meets at least six times a year. The pact mentions a multitude of instruments to reach its goals. The company will do its utmost to avoid forced dismissals, on the condition that employees display a positive attitude towards change in jobs and training. Instruments include:
- undoing outsourcing;
- seconding employees both inside the firm and in the region, while keeping their Corus terms of employment;
- stimulating part-time work, especially among older employees;
- (under certain conditions) reducing working hours; and
- minimising the use of temporary agency work and fixed-term contracts;
Another relevant agreement covers bus cleaners. The cleaning of buses is usually done at night. Employees are usually low-skilled and non-Dutch nationals. Most of the jobs are part-time, because employees are not allowed to work in night shifts for more than 28 hours a week. Absence due to sickness is high, as is turnover of employees. Because of fierce competition, terms of employment are constantly under pressure. Unions and several employers in the bus sector have thus agreed to develop new rosters that are more favourable for the employees than before. This has resulted in less turnover and absence due to sickness, and thus in an increase in productivity.
Some 1,800 people are employed at the Dutch Philip Morris cigarette factory. As from 1 July 2002, unions and management agreed to use the machines in several departments full time (instead of two-thirds of the time). In these departments, for most of the time the employees work without supervision. In exchange for every additional percentage point that machines are used, employees receive an 'uptime bonus' of EUR 200. However, deductions of this amount are allowed if quality deteriorates. Because of the agreement a cost reduction of 10%, demanded by the Swiss parent company, has been avoided. Although the unions put their signature to the agreement, they have some reservation, mainly fearing a loss of objectivity and a loss of unity among the employees.
What have been the results of collective agreements introducing work organisation changes? Drawing on assessments/evaluations made by researchers or the parties to agreements (employers, trade unions, works councils etc) or other sources, please provide information on issues such as the following:
- whether agreements have been successes or failures, and the reasons why in both cases;
- the impacts on flexibility and security (eg are there any successful examples of collective agreements addressing this issue as part of work organisation changes?);
- the impacts on productivity (has productivity been improved as a result of the work organisation changes introduced?); and
- the impacts on collective bargaining - are such deals broadly considered as concession bargaining, or as 'zero-sum' or 'positive-sum' situations? What are the implications for the structure, process or nature of collective bargaining (eg company versus sectoral? workplace representatives versus trade union? from “distributive” to “integrative” bargaining [with mutual gains for both sides]) and the role of management?
Where significant differences of interpretation exist in assessments on these questions - notably between the social partners - please report on the differing views.
Overall, the agreements referred to above seem successful. However, a certain amount of caution might be appropriate, because in general attention seems to focus on successful experiments and not on failures. Moreover, even the launch of (serious) negotiations seems to indicate that chances of success are high. For the impacts on flexibility and security and productivity, see above (under 'Recent agreements on changes in work organisation').
Such deals are broadly considered as 'zero-sum' or 'positive-sum' situations. The implications for the collective bargaining structure and process seem limited. Many agreements have an experimental character and have been concluded outside the regular bargaining rounds. They can mainly or even exclusively be found at company level.
Debate and prospects
What impact has the kind of agreement referred to above had in your country, and what impact might such agreements have in future? What is the current debate on the topic? Please provide an assessment of prospects for the future in terms of work organisation bargaining in your country (differentiating by sector, if relevant).
Since the mid-1990s, a major part of Dutch labour legislation has been concerned with combining flexibility and security. Major examples are the 1996 Working Time Law (NL0110102F), the 1998 Flexibility and Security Law (NL9901117F) and the Work and Care Law (NL0002182F). The period in which this legislation took shape was characterised by good relations between employers' organisations and trade unions/union federations, plus a coalition government that took much of its legislative inspiration from the social partners and gave the social partners a role in the laws mentioned above. The period was also characterised by a prospering economy.
Since 2001-2, the situation has changed. The Dutch economy is lagging behind its European counterparts (NL0312101F) and relations between the government and the social partners (especially the unions, but not only them) have deteriorated. Recent governmant measures have also had an impact on the relations between the social partners themselves. Sometimes, the partners try together to 'repair the damage' inflicted by the government (NL0408104F), but relations have generally become more tense.
More directly, certain government measures might create a stumbling block for integrated bargaining on work organisation-related matters. A government proposal to refuse the extension of collective agreements to a whole sector of the economy might have a negative influence on integrated bargaining, at least when wage rises are part of a deal negotiated for a whole sector. On the other hand, this influence should not be exaggerated, because many integrated agreements are negotiated at company level. Furthermore, quite a few such agreements are not negotiated as part of the normal collective bargaining rounds, but separately.
Conversely, other government measures may stimulate integrated bargaining. Proposals to deduct redundancy payments from the unemployment benefit as of 1 April 2005 would make it harder for employers to shed employees with a relatively weak position on the labour market (especially lower-skilled and/or older employees). This might give a boost to integrated bargaining on training and employability to avoid dismissals, and to agreements on progressive retirement. (Robbert van het Kaar, HSI)