Deadlock in negotiations on dismissal legislation

Employer and employee representatives in the Social and Economic Council (SER) have failed to reach agreement on changes to legislation on dismissal. Although the council promised a cabinet recommendation by the end of 2006, it concluded in December that agreement could not be reached among the parties. For the time being, this means that an SER recommendation will not be forthcoming supporting a reform of dismissal legislation linked to higher unemployment benefits and the reinforcement of employability.

In December 2006, employer and employee representatives and members appointed by the crown, meeting in the Social and Economic Council (Sociaal-Economische Raad, SER), concluded that they were unable to reach agreement on proposed changes to dismissal legislation. During 2006, the SER had issued various medium and long-term recommendations concerning key socioeconomic issues (NL0609049I; NL0610039I). However, the controversial topic of the dismissal law was not addressed in any of the SER recommendations. While the SER did promise to issue a cabinet recommendation by December 2006 at the latest, it admitted at that point that agreement could not be reached between employers and employees.

Dismissal protection reduced, right to education reinforced

In November 2006, the Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV) created an opening by responding positively to a proposal put forward by the Christian Democratic Alliance (Christen Democratisch Appel, CDA) in relation to dismissal legislation. This proposal supported the idea of simplifying the existing two dismissal procedures in an effort to draw up one single procedure and doing away with the preventative dismissal test by the Centre for Work and Income (Centrum voor Werk en Inkomen, CWI) (NL0611039I). However, employers within the SER wished to go one step further by also lowering the level of dismissal compensation, although the FNV did not wish to pursue this idea. Therefore, as a result of the deadlock in negotiations, the two procedures as well as the preventative test conducted by the CWI will continue to exist. The level of dismissal compensation will not be restricted and unemployment benefits under the Unemployment Insurance Act (Werkloosheidswet, WW) will remain unchanged. The right to education was also linked to an easing of the dismissal law; the trade unions consider that if employees can be dismissed more easily, then employers must invest in the training of staff to enable them to apply for other jobs having gained more expertise. The last element in the rejected agreement on the amendment of the dismissal law involved a transition agreement for older employees; this, too, failed to materialise.

Deadlock between social partners

A connection is evident between the deadlock in consultations and the parliamentary election results in late 2006 (NL0612019I). The former coalition parties, the right-wing liberal People’s Party for Freedom and Democracy (Volkspartij voor Vrijheid en Democratie, VVD) and the left-wing liberal Democrats 66 (Democraten 66, D66), lost the national elections held on 22 November 2006. This brings a new coalition including left-wing parties one step closer to leadership. The Labour Party (Partij van de Arbeid, PvdA) and the Socialist Party (Socialistische Partij, SP) do not support the reform of the existing dismissal legislation. Employers and employee representatives are thus now at loggerheads.

While the FNV is in favour of simplifying the dismissal procedures, it believes that employers should not influence dismissal compensation levels. Across the board, the Christian Trade Union Federation (Christelijk Nationaal Vakverbond, CNV) remains negative, asserting that plans have been tabled under which the average Dutch citizen will not be better off. Reaching an agreement with employers solely in the interests of making it easier for them to dismiss employees is not one of the CNV’s objectives. Meanwhile, the Confederation of Netherlands Industry and Employers (Vereniging van Nederlandse Ondernemingen-Nederlands Christelijk Werkgeversverbond, VNO-NCW) is enraged about the situation. Chair of VNO-NCW, Bernard Wientjes, has accused employee representatives of sabotaging discussions in anticipation of the election results. He believes that entering into discussions with trade unions that allow themselves to be guided by these kind of political considerations is pointless. Mr Wientjes has threatened to withdraw from the so-called ‘polder consultations’ as reaching a consensus among all parties seems impossible. However, even such actions are considered by some as part and parcel of the ‘polder dance’.

Marianne Grünell, Hugo Sinzheimer Institute (HSI)

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