Collective bargaining under the autumn 2004 social agreement

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In November 2004, the Dutch government and social partner reached a 'social agreement', providing for strict pay moderation in 2005 as well as dealing with matters such as occupational disability insurance, 'life-span leave' arrangements and early retirement. This article reviews collective bargaining since the agreement was reached, as of February 2005. Negotiations have generally been difficult and it appears that employers and trade unions have differing interpretations of the social agreement.

After a period of polarisation, industrial action and strikes, the social partners reached a 'social agreement' (known as the 'Museum square agreement', or Museumpleinakkoord) with the government on 5-6 November 2004 (NL0411102F). Trade union and employers' organisations on the one hand, and the government on the other, reached agreement on early retirement and 'life-span leave' arrangements (levensloopregeling) (enabling workers greater scope to save and manage periods of time off over their careers - NL0304103F), occupational disability insurance and wages. While the agreement does not rule out wage increases altogether, the parties agreed that a highly moderate stance should be adopted in 2005. Additionally, it was agreed that it would not be a matter of course that employees receive 100% of their pay in the event of sickness. The social agreement is being put to the test in the course of 2005, when almost all collective agreements come up for renewal.

An autumn 2004 report from the Labour Inspectorate indicates that contractual wages rose by 0.2% ('level-based') and 0.6% ('contract-based') in 2004. This represented a 2 percentage-point drop in comparison with 2003. While in the agricultural, industrial and construction sectors, wages rose more than the average rate, they actually fell in the services sector.

Bargaining stances for 2005

At the start of 2005, trade union and employers' organisations issued memoranda on terms and conditions of employment, setting out their demands for the forthcoming collective bargaining rounds. Taking account of the current economic climate, the Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV) has adopted a position of demanding an overall increase in costs of 3%. This includes a wage increase demand of 1.25%, with the remaining 1.75% to be devoted to a range of five key issues presented by FNV - childcare, earnings, a healthy working environment, pensions and job security. In each collective agreement, FNV will focus on two or three of these themes. The Christian Trade Union Federation (Christelijk Nationaal Vakverbond, CNV) is to uphold a maximum wage increase demand of 1.25% and has also expressed its intention to address childcare in all negotiations.

In its memo on employment conditions, the Confederation of Netherlands Industry and Employers (Vereniging van Nederlandse Ondernemingen-Nederlands Christelijk Werkgeversverbond, VNO-NCW) calls for a 'reserved' approach to amending current pension agreements and to lowering the level of sick pay during the first year of illness. The memo put forward by the Dutch Federation of Small and Medium-Sized Enterprises (Midden- en Kleinbedrijf Nederland, MKB-Nederland) highlights moderating labour costs, increasing labour market participation and raising labour productivity. This employers' organisation has also set the maximum wage increase at between 0% and 0.5%.

The trade union federations responded sceptically to the memos tabled by the employers' organisations. FNV is expecting confrontation during the bargaining rounds and has topped up its strike funds. Employers are opposed to FNV's negotiating position of a 3% increase. Despite the social agreement, employers and unions appear to be at loggerheads in some areas.

On the 'Buitenhof' television programme broadcast on 16 January 2005, the Minister of Social Affairs, Aart Jan de Geus, said that wages would not be going up until 2006. According to the minister, employees should not count on extra pay in 2005. He also anticipated tough negotiations during the 2005 collective bargaining rounds. The unions responded that wages are a matter between employers and employees and not the minister.

It seems clear from their memos that the different parties have different interpretations of the social agreement. Below we, review the outcomes of collective bargaining since the agreement was reached, as of mid-February 2005

Company bargaining

ABN Amro

A new collective agreement has been signed at the ABN Amro banking group by management, the FNV-affiliated Allied Unions (FNV Bondgenoten), de Unie, the CNV-affiliated Services Union (Dienstenbond CNV) and the Occupational Union for the Banking and Insurance Sector (Beroepsorganisatie Banken en Verzekeringen, BBV). The agreement provides for a rationalisation of employment conditions, with profit-distribution and guarantee schemes to be amended. Employees covered by these schemes will still receive two pay-outs over the next three years, followed by an annual drop in income of around 10%. They will also receive a real pay increase of 1.67% a year.

TPG Post

On 24 November 2004, the management of the TPG Post postal services company reached agreement in principle concerning the a new accord with the public sector unions affiliated to FNV and CNV - Abvakabo and CNV Publieke Zaak respectively - and other unions. This included agreement on a profit-linked bonus of EUR 500.

Verstegen

Unions have reached agreement with Verstegen, a foodstuffs company that employs some 350 people on a structural wage increase of 1%. Performance-linked remuneration will be replaced by incremental increases and employees will be assigned to higher wage scales.

Philips

Bargaining continues at the Philips electronics group. FNV has called for each employee to be given EUR 2,000 to be spent on training and education as they see fit, plus a wage increase of 1.25%.

Sectoral bargaining

Childcare

On 3 February 2004, a framework collective agreement for the childcare sector was reached between Abvakabo FNV, CNV Publieke Zaak, de Unie and the Maatschappelijke Ondernemingsgroep employers' organisation. The agreement specifies that in 2005 wages and the year-end bonus will increase by 0.75% and 1% respectively. The parties also reached agreement on pensions, childcare and costs related to sickness.

Furniture

The Central Union of Furniture Manufacturers (Centrale Bond van Meubelfabrikanten, CBM), FNV Construction (FNV Bouw) and CNV Wood and Construction (Bouw- en Houtbond CNV) have agreed to a wage freeze for the 22,000 workers in the furniture-making sector until April 2005. FNV had demanded a one-off bonus of EUR 110 but later dropped this demand.

Metalworking and electro-technical industry

Bargaining continues in the metalworking and electro-technical industry. Employers want employees across the industry to work 48 hours more a year. While the unions reject a sector-wide increase in hours, they are prepared to approve such increases at company level.

Banking

Negotiations in the banking sector have reached a deadlock. The employers want employees to start paying occupational pension contributions for the first time. The unions will accept this only if the total pension contribution is calculated on an amount exceeding the wage level by at least 15%. The unions also demanded a 1.25% wage increase while employers were not prepared to go further than 1%. Consequently, the banks broke off negotiations.

Insurance

Bargaining in the insurance sector has also stalled because of differing wage stances. FNV Bondgenoten demanded a wage increase of 1.25%, which employers countered with a call for no structural pay increases. Employers later offered a one-off bonus worth 1% but FNV Bondgenoten considered this insufficient to resume negotiations.

Construction

Negotiations over a new agreement for the construction sector broke off on 8 February. Early retirement and life-span leave arrangements, as well as modernising the collective agreement, were the main obstacles. Employers then announced they had no desire to enter into a new sectoral collective agreement. Instead they want to come under another collective agreement governing staff carrying out technical administration (the 'UTA' agreement). FNV Bouw, Bouw- en Houtbond CNV) and the Zwarte Corps union will be discussing possible action with their members.

Civil service

On 17 February 2005, the negotiations over a new agreement for 120,000 central government civil servants were postponed. The previous agreement expired on 1 January 2004. The unions have demanded a 0.75% wage rise from 1 January 2005, but the Minister of Internal Affairs wants a pay freeze and is only prepared to offer a one- bonus of EUR 125. The parties also disagree on the level of sick pay.

Commentary

The 2005 collective bargaining round has got off to a bumpy start. Despite the fact that the central organisation have more or less reached consensus in the form of the November 2004 social agreement, labour relations still appear somewhat strained. From their memos on their demands for the 2005 bargaining round, it would seem that employers and unions have different interpretations of the social agreement, and these differences have taken on more substantial proportions at the negotiating table. Agreement has only been reached in a limited number of companies and one sector (childcare).

It is already clear that wages are not the most important issue in the 2005 collective bargaining round. A great deal of attention is being paid to other themes including pensions and childcare. Instead of demands for wage increases, the unions are calling for one-off bonuses or funds for training and education. (Ilse Zaal, HSI)