Netherlands: Collective bargaining breaks through gridlock in public and construction sectors

Since the outbreak of the crisis, collective bargaining in the Netherlands has become more difficult, with bargaining rounds more protracted. Although there have been some breakthroughs in the current bargaining round, notably in the construction sector, a high incidence of conflict prevails in some sectors.

State of play regarding collective bargaining

Since the onset of the crisis, collective bargaining in the Netherlands has become more difficult. The bargaining rounds take longer, and in many cases there have been gaps in the valid time frames of successive agreements. According to employer federation AWVN, which has been involved in hundreds of negotiations, from 2013 onwards the number of agreements has systematically lagged behind the number reached in earlier years.

There are several reasons behind these more difficult and protracted bargaining rounds. In the public sector, the wage freeze as ordained in 2013 proved a major factor.  Since the  freeze was lifted, pension issues are now of major importance in reaching agreements on wage developments. In almost all sectors and companies, wage issues play an important role. In several sectors and companies, this has already resulted in industrial action, especially in the metal sector. Finally, mention should also be made of tensions within the bargaining parties, especially in the public sector (unions), in retail and catering, and for a time also in the construction sector (employers).

Notwithstanding this general picture, there have been a few breakthroughs. A major example is the agreement for the construction sector. In other sectors, however, conflicts are the order of the day. The situation in the public sector, in particular, is quite tense.

Sector-level bargaining

Public sector

In May 2015, three unions and the employer representatives for the public sector (600,000 civil servants) signed an umbrella agreement, after a long deadlock which was mainly due to the wage freeze. Wages will increase by 5.05% and all civil servants are due to receive a lump sum of €500.

However, the largest union FNV refused to sign the agreement, which has  still to be detailed and negotiated at subsector level. The main reason for this merits some explanation. In 2014, new legislation lowered the maximum amount of salary that could be put aside to build up a person's occupational pension, resulting both in lower pensions in the long run and in lower pension contributions for both the employer and the employee. According to the unions, pension contributions must be seen as deferred salary, and should therefore be returned in its entirety to the employees. To a certain extent, this has happened, but not everywhere. In a few situations, employers and pension funds argue that the money is needed to solve the financial problems of the pension funds, building up the necessary reserves and safeguarding pensions in the long run. This argument is also used in the public sector. According to FNV, this means that a significant part of the 5.05% wage increase is in fact being paid by the employees out of their own pocket.

The police force in particular have shown a lot of resistance to the umbrella agreement mentioned above. Union density is exceptionally high among the police force (around 80%, compared to the national average of under 20%), and the unions have started industrial action. Examples include the Tour de France (which kicked off in the Netherlands), and the first round of the Dutch soccer league in the second weekend of August resulting in the postponement of several matches and some angry reactions on the part of fans. On 10 August, the unions announced they would be taking industrial action also on the occasion of the annual opening day of the Dutch parliamentary year on the third Tuesday of September (Prinsjesdag). On 13 August, union federations similarly reported discontent among teachers, and civil servants working at the Tax Authority and in the public transport sector.

Construction

Following 18 months of negotiations, social partners in the construction sector (100,000 employees , 70,000 less than in 2008) came to an agreement. Wages will increase by 5.5% over a 25-month period. Other provisions are:

  • more flexibility in working time patterns;
  • gradual abolition of extra days off for older employees;
  • introduction of a personal budget, that employees can use, for example, for training and education;
  • more effective enforcement of compliance with the CLA;
  • stepping up the battle against bogus employment in the construction sector to avoid the collective agreement.

During the negotiations, there were some tensions within the employer camp, mainly between larger and smaller firms. Eventually the issues (financing of training and education, the battle against bogus employment in construction) were resolved.

Metal and engineering

In April 2015, negotiations in the metal and engineering sector (Grootmetaal, 150,000 employees, many large firms) came to a halt. Unions refused to agree to employer demands for increased flexibilisation with regard to working time. In the metal sector (Metaal en Techniek, 300,000 employees, mainly smaller firms), comparable problems ended the negotiations in March. Since then, the unions have organised a series of strikes, involving large firms such as DAF, Imtech and Cofely.

Retail

On 12 August, a major conflict between the unions came out into the open in the retail sector. FNV Handel refuses to be party to collective agreements in which unions Alternatief voor Vakbond (AVV) or De Unie is involved. These two unions have agreed to a Collective Labour Agreement (CLA). If the Ministry of Social Affairs (SZW) extends this agreement, it will cover 100,000 employees, of which only a tiny proportion is a member of either AVV or De Unie. It remains to be seen whether the Ministry will grant the extension.

Company-level agreements

Although sector agreements dominate the Dutch CLA landscape, many large firms have their own company agreement. At NS (Dutch Railways, 16,000 employees) an agreement was signed in June which will be valid until October 2017. In that period, wages will increase by just over 5% and older employees will keep their extra days off. Up to 2019, an employment guarantee is in operation. Furthermore, external flexiwork will be reduced by 20%.

At KLM (Dutch Airways) two agreements were signed, one for  ground personnel and one for pilots. The latter agreement (beginning July 2015) proved contentious.  The 2,800 pilots agreed to refrain from wage increases and to work more hours. In addition, the pension age will increase from 56 to 58. The agreement is valid for three years, starting on 1 January 2015. Earlier, in April, an agreement for ground personnel was reached: under the terms of this agreement, there will be no forced dismissals until 2020 in exchange for a wage freeze and older employees lose part of their extra days off.

Commentary

Bargaining has been difficult since the outbreak of the crisis, and tensions are rising. The main union federation FNV has taken a tougher stand (possibly encouraged by a recovery of the Dutch economy), and the level of industrial action is increasing. In the public sector, in particular, employees seem keen to put an end to the wage freeze they have endured since the crisis.

 

 

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