Netherlands: Changes to wage-setting mechanisms in the context of the crisis and the EU’s new economic governance regime

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Since 2008, there have been virtually no changes in the wage-setting mechanisms in the Netherlands. There were no legal changes and no changes in the structure and number of agreements. The only change worth mentioning is that many agreements remained in force after the formal expiry date, due to more protracted bargaining rounds.

Section 1: Mapping changes in wage setting mechanisms in the private sector

For each aspect of wage setting mechanisms indicated below, please indicate:

1.1 whether there has been any recent change (since mid-2008). If there have been changes in many sectors, report the most prominent examples.

1.2 in which year any such change(s) occurred. Report for the most prominent examples if there have been changes in many sectors.

1.3 If any changes, briefly summarise the change(s) which have taken place and illustrate with prominent examples.

a) main level(s) of collective bargaining over wages (collective wage setting), where a main level under single-tier bargaining is one that accounts for at least one-fifth of employees covered by collective bargaining or under multi-tier bargaining is a level that accounts for a non-trivial element of collectively agreed pay

No changes

b) mechanisms governing coordination between different levels of collective wage setting, under 2- or multi-tier arrangements (for example, rules implementing the ‘favourability principle’ under which lower levels can only improve on wage standards agreed at higher levels, or rules governing the respective of competence of levels on different aspects of wage setting)

No changes

c) formal and informal practices of coordination across bargaining units at the same level, such as pattern setting arrangements and/or which settlement sets the pattern, either between sectors (under multi-employer bargaining) or between companies (under single-employer bargaining)

No changes

d) the relationship between wage setting in the private and public sectors, for example over which (if any) sector establishes a pattern or benchmark for the other

No changes

e) extension mechanisms

No changes

f) number and nature of opening clauses in sector and multi-sector agreements

No changes

g) opt-out clauses in sector and multi-sector agreements

No changes

h) duration of agreements

No changes

i) number of agreements

No changes

j) continuation of collective agreements beyond expiry

This has increased because in many cases the negotiation process has been protracted. However, there are no precise figures.

k) extending bargaining competence beyond trade unions to other types of workforce representative

No changes

l) indexation mechanisms

No changes

m) minimum pay setting arrangements, including the relationship between, and respective roles of, collective bargaining and statutory mechanisms in setting minimum wages

No changes

n) reconfiguration of existing sector agreements, establishment of new sector agreements, termination of existing sector agreements

No changes

o) other aspects of wage setting, for example integration of agreements covering blue- and white-collar workers in the same sector

No changes

The mechanism itself has not changed, but there have been changes in the use of the mechanism. The main reasons for the stability of the mechanism are threefold:

• unemployment (at least until recently) has remained relatively low in the Netherlands;
• social parties are on average content with the wage setting mechanism;
• the mechanism is flexible. Virtually all agreements contain opt-out and/or opening clauses.

Section 2: Sources of change to wage setting mechanisms

For each type of change that has occurred (except c) d) i) o)), please indicate the main source(s) of the change. Note that more than one of the following sources may have been influential to a change. Please provide brief details in the relevant rows in the table below.

2.1. externally imposed or required (e.g. by the European Commission, ECB and/or IMF)2.2. externally influenced (e.g. via Country Specific Recommendations under the EU’s new Economic Semester governance arrangement) 2.3. imposed by national government 2.4. negotiated/concerted between cross-sector social partners, with or without government involvement2.5. negotiated between social partners at sector level 2.6. other (please specify)

Section 3: Factors influencing changes in wage setting mechanisms

For each type of change identified in Section 1 (except i) and o)), please indicate the main factors or rationales which have been influential. Please provide brief details in the relevant rows in the table below.

3.1. Macro-economic, e.g. wage moderation, uncertain economic outlook 3.2. Micro-economic, e.g. increased variability in competitive circumstances of companies, financial hardship, business restructuring 3.3. Economic organization, e.g. emergence of new business activities which increase diversity within existing sectors and/or blur boundaries between sectors and/or create new sectors; and/or growing recourse to outsourcing, which blurs boundaries between sectors and creates structural tensions according to position in the supply chain within sectors 3.4 state policies and/or requirements from the European Commission, ECB and/or IMF involving weakening or strengthening of state supports for collective bargaining, e.g. changes to extension mechanisms, changes to indexation mechanisms, changes to the favourability principle, authorising workforce representatives other than trade unions to conclude agreements, changes to the boundary between statutory determination and collective bargaining

Section 4: Influence of the EU’s new economic governance regime

Have any aspects of a) wage setting arrangements b) other features of industrial relations been the subject of country specific recommendations under the European Semester system which took effect as from 2011 i.e. in 2011, 2012 or 2013?

4.1 Please check the Table summarising country specific recommendations attached to the questionnaire, and indicate any changes or amendments that are needed.

Not applicable

4.2. If Yes, specify any changes to a) wage setting arrangements b) other feature of industrial relations that have been implemented following the recommendation(s)

Not applicable

4.3. If Yes and changes, were these required by the European authorities, required by the IMF or recommended but not required?

Not applicable

4.4. Have there been changes in any formal or informal mechanisms aimed at cross-border coordination of wage setting, for instance in response to the new economic governance regime?

Not applicable

If yes, please provide brief details.

Section 5: Perspectives of the social partners

What are the views of employers’ organizations and trade unions on:

5.1 The desirability of the changes to wage setting arrangements introduced

Not applicable

5.2 The effects / impact of the changes to wage setting arrangements introduced

Not applicable

5.3 The main factors or rationales influencing changes to wage setting arrangements

Not applicable

Sources: Euro plus Pact Commitments in 2011 - Background on the Euro Plus Pact, European Commission; European Semester recommendations – European Commission, 2011a, 2012, 2013.

Robbert van het Kaar, AIAS/HSI.