Agreement between AKZO-Nobel and the unions

Working time reductions at AKZO-Nobel, the Dutch chemicals group, have been safeguarded, but the standard 36-hour week has been dropped on the basis of a new agreement between AKZO-Nobel and the unions, signed in April 1997. Consequently, the feared start of a wave of pay rises in the Netherlands has been prevented.

On 8 April, AKZO-Nobel and the unions reached agreement on both working time reductions and pay increases. The dispute, which had served to divide AKZO-Nobel and the industrial unions since 13 March (NL9703108N), was resolved to everyone's satisfaction.

The cause of the dispute was AKZO-Nobel's announcement (NL9702105N) that it would not observe the 1995 collective agreement regarding the introduction of a standard, average 36-hour working week as of 1 July 1997. Particularly because experiments carried out over the past year and a half demonstrated that reducing the working week affects both employment and business management in a positive direction, the industrial unions affiliated to the Dutch Trade Union Federation (FNV) and the Christian Trade Union Federation (CNV) were furious and even threatened to take AKZO to court. However, two other unions, MHP and the union for professional and managerial staff at AKZO, VHP-AKZO, welcomed AKZO's new proposal to offer all workers a pay increase and the option to decide for themselves whether or not they wanted to work a 36-hour week. Consequently, the industrial unions could not afford to be too persistent regarding working time reductions, since this would run the risk that AKZO and the other unions might reach a new collective agreement without them. Besides, in the past period, their members had progressively indicated that they wanted to share in economic growth. Voluntary pay cuts in exchange for working time reductions appear to have become a thing of the past.

The dispute took on national proportions when Prime MinisterWim Kok publicly voiced concern about AKZO's position. A considerable wage increase at AKZO, the biggest chemicals firm in the Netherlands, might set off a national wave of pay increases. Such a wave would herald the end of the successful Dutch policy on pay moderation which has contributed greatly towards the favourable economic situation in the Netherlands. At least for the time being, the new agreement at AKZO has put paid to these concerns.

The outcome of the negotiations between AKZO and the unions is as follows. All workers get eight extra days off a year. They are then free to "sell" all these days back to AKZO, in return for which they will receive a wage increase of 3.2%. However, those workers who allow AKZO to allocate the timing of their extra eight days off will also be granted an extra four days off (that is, 12 in total), and will therefore end up working a 36-hour week on average. This model is expected to be copied by other firms.

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