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In December 2001, the largest trade union in the Netherlands, Allied Unions (FNV Bondgenoten), announced that it would be undergoing further reorganisation as a result of financial difficulties. Its membership figures are also stagnating, along with those of other unions. Meanwhile, parliamentary debate on the representativeness of the trade union movement has continued and the established trade union movement itself is seeking protection based on the representativeness criterion in cases of competition from new unions.
Dutch parliamentary debate on the representativeness of organisations of employees and employers was rekindled during discussion of the budget for the Ministry of Social Affairs and Employment on 9 November 2001. Whereas, previously, the debate had focused on the issue of representativeness in its entirety (NL0103127F), it now centred on the Ministry's expenditure on social funds (sociale fondsen). These sector-specific funds are jointly administered by employer and employee representatives, and are mainly intended for educational and employment-related projects. During collective bargaining, agreements are reached at sector level regarding the funds. Such agreements also carry the status of a collective agreement. In practice, this means that, at the request of the social partners, they are usually declared generally applicable by the minister at the same time as the regular collective agreement. As a consequence, unorganised employers are also obliged to contribute towards these funds.
The most significant issues of contention in the Lower House of parliament were the lack of transparency in relation to fund expenditure and the level of the free 'distributable reserves' of these funds, totalling more than EUR 500 million. The debate covered other points as well, including the fact that around 12% of fund expenditure finds its way back to the employer and employee organisations, which use these resources for the purposes of providing information and information-related services, for example.
In response to the debate, existing rules governing social funds will be tightened. The openness and availability of the funds' annual reports and financial reports will be increased, and the funds will be obliged to submit an auditor's statement with the annual report clarifying that expenditure conforms to the objectives. If, during the term of the collective agreements applicable to the funds, conclusive evidence of non-compliance emerges, their general applicability will be revoked.
Established unions face competition
The Dutch trade union landscape has always been dominated by three federations: the Federation of Dutch Trade Unions (Federatie Nederlandse Vakbeweging, FNV), the Christian National Trade Union Federation (Christelijk Nationaal Vakverbond, CNV) and De Unie-Federation of Managerial and Staff Unions (Unie Middelbaar en Hoger Personeel, De Unie MHP). To a large extent, organisational change has taken place and continues to take place within these federations, but this does not necessarily spare them from competition. For example, dissatisfied union members in the healthcare sector established their own organisation in 1991 under the name of Nieuwe Unie '91 (NU'91); on the railways, the Trade Union for Engine Drivers and Conductors (Vakvereniging voor Machinisten en Conducteurs, VVMC) occupies an important position in the representation of these groups (NL0104130N); in June 2001, engineers at the KLM airline announced their intention to establish their own union; and on 21 July 2001 casino staff established their own union.
The established unions recently addressed the issue of competition from newly established unions within the central consultative body of employers and employees, the Labour Foundation (Stichting van de Arbeid). Following the conclusion of a number of collective agreements by the Landelijke Bedrijfsorganisatie Verkeer (LBV) in the hotel, restaurant and catering trade, video shops and a number of temporary employment agencies, the established trade union federations proposed imposing a number of threshold criteria for new entrants to bargaining. LBV, a member of the Independent Association of Enterprise Organisations (Onafhankelijke Verbond van Bedrijfsorganisaties) which is rooted in Marxist traditions, has signed 20 collective agreements and has 8,050 members. In this regard, the union federations are seeking new rules based on the representativeness criterion. They argue that trade unions should be of a minimum size in order to apply for dispensation from coverage by a collective agreement extended to a whole sector. Also, in sectors where one of the large federations has already concluded collective agreements, companies should be able to sign a separate collective agreement only if the union concerned is deemed sufficiently representative.
Employers' organisations, and specifically the Federation of Small and Medium-Sized Businesses (Midden- en Klein Bedrijf, MKB), are not in favour of excluding LBV from bargaining.
Stagnating membership growth and an ageing workforce
In December 2001, the Central Statistical Office (Centraal Bureau voor de Statistiek, CBS) announced that growth in the number of union members is stagnating. The unionisation rate lies at around 27%. Members are divided across the different federations as follows:
- FNV - 1,222,700 (63.7% of the total);
- CNV - 355,500 (18.5%);
- Unie/MHP - 215,200 (11.2%); and
- other - 125,300 (6.5%)
The unions have failed to break effectively into new sectors such as information and communications technology (ICT) and are finding it difficult to organise young employees, women and people from ethnic minority groups. The percentage of female members in unions has however risen from 14% in 1981 and 19% in 1991 to 28% at present. The rate of unionisation among ethnic minority groups is around 20%, and among 'flexi-workers' 12%. Difficulties generating loyalty amongst young employees are also clear from the unbalanced age make-up of the trade union movement: only 4.6% of members are younger than 25. In 1992, this figure was 7.8%. The number of members over the age of 65 is considerably higher than the number of members under 25 years of age.
The degree of organisation differs markedly by sector. Sectors with a high unionisation rate include water and air transportation (56% in 1999), utilities (47%), primary metalworking industry (46%) and public administration (45%) and education (43%). At the bottom of the scale are ICT software and services (6%), and the retail (12%) and wholesale (13%) trade.
Reorganisation of Allied Unions
On 8 December 2001, the largest trade union in the Netherlands, Allied Unions (FNV Bondgenoten), announced plans for a reorganisation. The union's financial deficit for 2001 amounts to NLG 70 million, NLG 16 million more than budgeted. Over 2000, Allied Unions suffered a loss of NLG 86 million on an operating income of NLG 180 million. Since the start of 2000, its capital base has diminished from NLG 700 million to NLG 470 million, after several boom years because of rising share prices (NL0006192N).
The causes underlying the union's deficit are diverse: the process of reorganisation following the merger of four unions to create Allied Unions turned out to be more costly than expected; the number of collective agreements concluded has risen to 800; membership services are running at a loss – partly because members often require more legal aid than budgeted; and membership growth remains below expectations.
Allied Unions announced its intention to raise the level of union contributions due and to cut a further 45 jobs, following a reduction in the number of employees from 1,000 to 700 over a two-year period. Another measure aimed at stabilising the budget is to include employer contributions made to the union in the figures in the future. This relates to an annual amount of approximately NLG 49 million that employers pay as compensation for the costs incurred by the union in negotiating and concluding collective agreements. For example, Philips pays approximately NLG 1 million and the light engineering sector around NLG 10 million. To ensure that the union does not thus become dependent on the willingness of employers to conclude collective agreements, a special fund of NLG 20 million has been created. The employers' contribution is also not unimportant for CNV unions: some 20% of the costs incurred by the CNV Industrial Union (CNV Bedrijvenbond) are covered by employer contributions (in 2000, this amounted to NLG 133 per member).
Commentary
The political debate on the representativeness of the trade unions continues, although it appears to be focusing more on elements such as the social funds and less on representativeness in a broader sense, an issue which only the liberal liberal Party for Freedom and Democracy (Vereniging voor Vrijheid en Democratie, VVD) and the social liberal Democraten 66 (D66) - both parties in the government coalition - appear to be addressing. The other political parties, along with the trade union movement and employees themselves, seem less enthusiastic about a fundamental debate on representativeness.
Financial problems at a number of the largest unions, however, pose a far more real threat to the trade union movement. Also, at a more fundamental level, stagnating membership figures and the uneven make-up of the membership base of the union movement as a whole provide cause for concern. It remains unclear at this stage whether focusing on providing financial services for individual members will significantly contribute towards solving this problem (NL9908158N).
The abovementioned financial problems have also drawn some attention to the flow of funds to the trade union movement from the employer side. While such practices would be taboo in many other countries, in the Dutch 'polder model' of consensus and consultation, it is partly a well-considered gesture in the interests of employers in a favourable negotiating climate and a high degree of industrial peace. (Robbert van het Kaar, HSI)