Government appoints crisis team to deal with economic downturn

In January 2009, the Minister for Social Affairs and the social partners joined forces to deal with the economic crisis. Sustainable measures on labour market modernisation will be explored, to avoid mass redundancies and increase employee mobility. A reduced working hours scheme will remain in place until March. Refresher training programmes will be offered to unemployed people and some social partners will also create incentive plans like job pools and ‘green’ measures.

Increasing employee mobility

In January 2009, the Minister for Social Affairs and Employment, Piet Hein Donner, joined forces with the social partners in a bid to make use of the economic crisis as an opportunity to modernise the labour market. The country’ s three biggest trade union federations were involved – the Federatie Nederlandse Vakbeweging (FNV, Dutch Trade Union Federation), the Christelijk Nationaal Vakverbond (CNV, Christian Trade Union Federation) and the (Vakcentrale voor middengroepen en hoger personeel (MHP, Federation of Managerial and Professional Staff). The Vereniging van Nederlandse Ondernemingen-Nederlands Christelijk Werkgeversverbond (VNO-NCW, Confederation of Netherlands Industries and Employers) represented the employer side.

Increasing employee mobility is one of the more sustainable measures that aim to prevent widespread unemployment. Each month, the pool of unemployed people increases by thousands – the figure in January 2009 exceeded 80,000 people. Expectations are that small and medium-sized enterprises (SMEs) will be hit hardest in terms of job losses in 2009. According to estimates by the Economisch Instituut voor het Midden en Kleinbedrijf (EIM, Economic Institute for SMEs), the manufacturing industry – characterised by international competition – will also suffer significant job losses in 2009. According to the Economisch Instituut voor de Bouwnijverheid (EIB, Economic Institute for the Construction Industry), the construction sector will feel the impact of the economic crisis, albeit with some delay in 2010. The Centraal Planbureau (CPB, Netherlands Bureau for Economic Policy Analysis) forecasts that in 2009 unemployment will increase to 4.5% of the economically active population, and to 6.5% in 2010, equivalent to about 500,000 unemployed people. Minister Donner has set up a crisis team that is expected to put forward plans to deal with the economic downturn by 1 March 2009. The three parties agree that recently unemployed people should be helped back into employment as soon as possible. The crisis team will also draft plans to promote mobility in the labour market.

Reduced working hours scheme and training extended

The reduced working hours scheme will apply until 1 March 2009, after which it will be modified. Under the scheme, companies can apply to temporarily register some of their employees under the Unemployment Insurance Act (Werkloosheidwet, WW). The companies concerned, however, must prove that they have been affected by the economic crisis. Minister Donner insists the scheme will remain temporary; it was due to end on 15 January 2009, but has now been extended by six weeks (NL0812019I). FNV has urged for the scheme to continue for the time being.

Actively supported by companies, it has been agreed that employees will follow training programmes while unemployed. Many of the 266 companies that applied for eligibility under the reduced working hours scheme have initiated regular training programmes. Programmes at larger companies are often made available to supplier companies and other employees within the region. Minister Donner is impressed by such initiatives, especially within the steel and construction sectors. These sectors, together with the real estate and plastics industries, are proportionately making more use of the scheme.

Training

The reduced working hours scheme is limited, as it can only be used for a maximum of six months. It will therefore provide little relief in the period of economic hardship facing the Dutch economy over the next two years. For this reason, Minister Donner hopes to develop other sustainable instruments with the newly established crisis team. For example, companies will be given the option of applying a structural reduction of working hours for an expanded period, also referred to as part-time dismissal. This would involve registering staff – at least partly – under the WW. The crisis team intends to examine if employees could be offered refresher training or retraining during the extra time at their disposal.

Mobility centres and job pools set up

Mobility centres play a key role in Minister Donner’s plan to increase employee mobility. In addition to rising unemployment, human resources are currently lacking in the Dutch labour market. In December 2008, the minister decided to establish 30 mobility centres, 10 of which were due to be operational by January 2009. Their strength will lie in the level of cooperation established between companies, trade unions and job-finding organisations. As far as the minister is concerned, the main focus of this initiative is to create jobs were these can be found and not to protect jobs where there is no work.

The social partners strongly support the concept of job pools. Employees will be guided from one job to another within these regional job pools and employers can place their redundant staff in these pools. The job pools take over the employment contracts from the employers, pay the employees a salary and receive their unemployment benefits in exchange. Furthermore, the job pools search for suitable employment and training in the region and try as far as possible to transfer the unemployed individuals elsewhere within their sector. The job pool centre Metalektro Personeelsdiensten in Hengelo in the eastern Netherlands, which is managed by the trade union and employer organisations, has been working successfully for some time using this formula. Although the social partners consider the job pool scheme as a temporary bridging measure, they believe it will enable professionals to be retained within their sector, thus enhancing economic prospects and confidence. Minister Donner is, nonetheless, critical and fears that employers will simply dump their redundant staff in the job pools. For this reason, the minister put forward his plan for employers to directly transfer staff to other companies in the sector as a more effective solution and is prepared to offer companies financial incentives to actively seek alternative solutions. The government is currently debating the job pool scheme, which will affect individual players less in financial terms while still being a form of work-to-work supervision.

Views of social partners

VNO-NCW believes that the government has underestimated the country’s economic problems. Companies are making little use of the new facilities such as the guarantee scheme for SMEs and extra fiscal deductibility for investments. Only €1.3 billion of the estimated €6 billion has been used. VNO-NCW considers that the guarantee scheme for banks is especially limited. Emergency consultation between the Minister for Finance, Wouter Bos, and the banks has since resulted in all of the banks emphatically expressing their confidence in the scheme, and therefore expressing confidence in the banks that make use of it. It is hoped that this will promote mutual lending among banks and to companies. The package of cabinet measures also includes state guarantees for exporting companies. In so doing, loans to companies supplying eastern Europe and Russia will be covered by a state guarantee. Hospitals and housing corporations will also receive compensation for high interest on loans needed to execute construction plans. The government will also guarantee loans to private individuals if the funds are used to make their homes more energy efficient. Although the government has expanded the package of emergency measures, the social partners remain critical; they still believe the package leaves much room for improvement.

FNV and environmental foundation table ‘New green deal’

FNV has also tabled its own incentives plan. Together with Stichting Natuur en Milieu (Foundation for Nature Conservation and Environmental Protection), FNV wants the cabinet to invest €3 billion in a ‘green’ job-creation plan over the next two-year period, which would create 100,000 new jobs. Within the scope of this ‘New green deal’, the organisations are also calling for the value-added tax (VAT) rate on environmentally-friendly goods and services to be lowered from 19% to 6% (or from 6% to 0%). People must also be able to borrow at cheaper rates to better insulate their homes. Additionally, the organisations also want investments in expanding public transport and wind energy to be made sooner than planned. According to FNV, this would create 100,000 extra jobs in the construction, automotive and steel industries.

Marianne Grünell, Hugo Sinzheimer Institute (HSI)

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