Trade unions place new demands on part-time unemployment scheme

A new scheme took effect in April 2009 enabling companies to apply for part-time unemployment benefit for some of their employees. Trade unions in the sectors most affected by the global economic crisis are now making supplementary demands, including topping up benefits to equal 100% of the salary level. Employer organisations are unhappy with these demands. In response, the government has suggested setting up a mediation telephone hotline.

To help businesses to survive the recession, a new scheme came into effect on 1 April 2009, enabling companies to apply for part-time unemployment benefit for some of their employees. The government will offer companies in financial difficulties the option of rendering their employees unemployed for a maximum of half of their working hours and for a period of no more than 15 months. Since benefits amount to 70% of the salary level, employees would have to forfeit up to half of the remaining 30% – that is, 15% – of their overall salary. Moreover, pension rights will not accrue on the unemployment component of their income.

The provisions will have implications for the unemployment rights of workers who are part-time unemployed. Those who lose their jobs will deplete these rights. They may end up on benefits directly, also having to resort to their own savings.

Trade union demands

The trade unions in the sectors most affected by the global economic crisis – transport and industry – are now making supplementary demands, including the topping up of wages. A total of three unions have asked employers applying for part-time unemployment benefit for their workers to supplement their employees’ incomes to 100% of their salary level. The three trade unions concerned are the Allied Industry, Food, Services and Transport Union (FNV Bondgenoten) of the Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV), the Industry, Food and Transport Workers’ Union (CNV Bedrijvenbond) of the Christian Trade Union Federation (Christelijk Nationaal Vakverbond, CNV) and the Dutch General Independent Union (De Unie), which is a member of the Federation of Managerial and Professional Staff Unions (Vakcentrale voor Middengroepen en Hoger Personeel, MHP). The unions are also demanding that the companies in question keep these employees in their service for at least six months after termination of the part-time unemployment. This period is longer than the three to five months already proposed by the government. Furthermore, the trade unions also demand that employees who are part-time unemployed continue to accrue pension rights.

The three trade unions are of the opinion that the potential implications of part-time unemployment are too far reaching for employees. Workers cannot be the only ones to be disadvantaged by the measure. A loss of 15% on an average salary is not insignificant, while employers – apart from efforts directed at training – do little in return for saving 50% on staff costs. Moreover, the part-time unemployment scheme is intended for companies wishing to retain their skilled employees during the economic crisis and be in a more advantageous position when the recession is over. According to FNV, it should not be difficult under such circumstances for companies to supplement unemployment benefits to 100% of the salary level and retain the employees for at least six months after the period ends.

Employer unease

The Dutch Federation of Small and Medium-Sized Enterprises (Midden- en Kleinbedrijf Nederland, MKB-Nederland) is unhappy about the new trade union demands. However, the Confederation of Netherlands Industry and Employers (Vereniging van Nederlandse Ondernemingen-Nederlands Christelijk Werkgeversverbond, VNO-NCW) has been calmer in its response, asserting that – while the trade unions are free to make demands – other parties need not necessarily accept them.

Ministerial mediation

The Minister of Social Affairs and Employment, Piet Hein Donner, has offered mediation in the form of a telephone hotline for the social partners to call if they need to resolve any problems in this regard. The hotline will be used to resolve differences of opinion between employer and employee representatives regarding the provisions for part-time unemployment. It is not the intention for employers to reach agreement with individual employees about part-time unemployment; the trade unions must be involved in this respect.

Differences of opinion will be brought before the Labour Foundation (Stichting van de Arbeid, STAR). If the social partners then fail to reach agreement, the minister will have the last word. STAR has produced explanatory notes on the new scheme. From this, it should be clear that the trade unions may not reject part-time unemployment solely because employers refuse to supplement the benefits awarded to the employees concerned. In turn, employers may not in advance reject the possibility of supplementing salaries during the negotiation process. This means that topping up wages is not a specific precondition for agreement between employers and employee representatives.

Marianne Grünell, Hugo Sinzheimer Institute (HSI)

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

Eurofound welcomes feedback and updates on this regulation

Add new comment