In March 2006, the Dutch government decided to formally open its borders to eastern European workers, in line with EU agreements, with effect from 1 May 2006. A transitional arrangement currently applies, allowing for the introduction of a less stringent work permit, and will be maintained until 1 January 2007. At the same time, the government is expected to assess some economic sectors in terms of employment trends. Employers believe that this arrangement is unnecessary, while the unions are in favour of introducing a trial period. A majority of members of parliament also favour stricter policies during the transition period. The social partners are expected to assess, sector by sector, whether Dutch employees are being displaced due to an increase of foreign workers.
Background
The European Commission had asked the Netherlands to reveal its plans by 1 May 2006 for the lifting of national restrictions on the free movement of workers from the eight new central and eastern European Member States: the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovenia and Slovakia. The Commission stipulated that any national restrictions on the free movement of all workers in the EU will have to end by 30 April 2009, unless a country can prove that its economy would be at risk of collapse as a result. At the beginning of April 2006, the EU Commissioner for Employment, Social Affairs and Equal Opportunities, Vladimír Špidla, made a special visit to the Dutch parliament to persuade politicians that the Netherlands, following the example of countries like Ireland, Sweden and the United Kingdom, would benefit economically as a result of abolishing national restrictions on workers’ free movement from the central and eastern EU Member States.
In 2005, around 30,000 people from Poland and other new EU Member States were working in the Netherlands. Studies estimate that this number could double when existing limitations are lifted. The jobs filled by these workers are mainly in the agriculture, gardening and manufacturing sectors – jobs that are currently not being filled by Dutch workers (NL0507103F).
Reaction to new labour migration rules
The Dutch Prime Minister, Jan Peter Balkenende, and members of the Lower House of Parliament (Tweede Kamer der Staten-Generaal) responded cautiously to the issue of unrestricted labour migration. Prime Minister Balkenende believes that the principle of free movement of all workers in the EU should be supported, but at the same time attention should be paid to the consequences for the labour market and the measures adopted in neighbouring countries. For example, Germany, France and Belgium have recently announced that they will maintain their transitional agreements for the time being.
The Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV) publicised its view by demonstrating at parliament buildings while the debate on this issue was in progress. Right-wing and left-wing parliamentary parties are generally in favour of lifting the restrictions set out in the transitional agreement; the left-wing parties however emphasise the importance of maintaining stringent checks in relation to compliance with Dutch employment conditions. Labour Party (Partij van de Arbeid, PvdA) Member of Parliament Jet Bussemaker would like to see a responsible transition. She has called on the State Secretary for Social Affairs, Henk van Hoof, to first commit to maintaining Dutch employment conditions, combating illegal work, and encouraging unemployed people to return to work, before the existing restrictions are eased or lifted entirely. The Socialist Party (Socialistische Partij, SP) opposed the government proposal because of its fear that unfair wage cost competition would ensue.
The smallest ruling party, the social-liberal Democraten 66 (D66), sided with the liberal coalition party, the People’s Party for Freedom and Democracy (Volkspartij voor Vrijheid en Democratie, VVD), and argued strongly in favour of opening up the labour market to workers from the new Member States, by pointing out that labour migration is characteristic of all age groups. The largest coalition party, the Christian Democratic Party (Christen Democratisch Appèl, CDA), took a more neutral view and proposed a targeted, selective sector approach during the transition period: the party suggested that the new rules should only be applied in sectors where employees and employers alike would agree to greater leniency.
Transitional period
State Secretary van Hoof will assess the possibility of a sector-based approach. Mr van Hoof already promised that, in consultation with employers and employees in certain sectors, he would not admit specific professions. He affirms that monitoring compliance with collective agreements, employment conditions and tax matters would also be tightened. An interim regime will apply until 1 January 2007, under which work permits for foreign workers will still be necessary, although the requirements for such permits will be less strict. The Centre for Work and Income (Centra voor Werk en Inkomen, CWI) will no longer have to carry out a labour market test to investigate whether someone from the Netherlands or the other EU Member States could take up the position; it will only check if the wages and housing of the migrant workers comply with the requirements. In addition, the Labour Inspectorate (Arbeidsinspectie, AI) will maintain stricter control over minimum wage compliance and more substantial fines will be imposed in cases of evasion. Moreover, in cases where collective agreements are circumvented, the unions will be informed and may even decide to take legal action against the employer in question. The tax authorities and AI will also cooperate more closely in taking a stricter approach to combating illegal or undeclared work and bogus self-employment. Finally, the information provided to eastern European workers will be improved in order to increase awareness of their rights under Dutch collective agreements.
However, a majority of parliament members believe this is still an insufficient guarantee that the process will run smoothly: they are, besides sector-based testing, trying to retain the individual labour market test to ensure that no Dutch employee remains unemployed while their foreign counterparts are able to find a job.
Commentary
The Confederation of Netherlands Industry and Employers (VNO-NCW) and the employer organisation MKB Nederland are disappointed with these proposals and see no need for an interim regime. They believe that foreign employees are already paid according to Dutch collective agreements. Both organisations also consider that introducing such a regime reveals the State Secretary’s lack of confidence in his own inspectors who are responsible for monitoring compliance with the national labour market regulations. Although the trade union movement, united in the Social and Economic Council (Sociaal-Economische Raad, SER), supports the government’s proposal of opening the country’s borders to all EU workers, opinions are in fact less united.
In principle, the unions do not oppose the free movement of workers from the new Member States, as the conditions under which this takes place have been further defined. While the mobility of workers contributes to better economic performance, it is necessary to abide by the national laws, rules and regulations. The unions consider that the transitional agreement can only be abolished once the government has established efficient control mechanisms to combat undeclared work, low pay and bogus self-employment. The implementation process may take up to three years to complete. FNV and the Christian Trade Union Federation (Christelijk Nationaal Vakverbond, CNV) welcome the state secretary’s willingness to set aside time to formulate supplementary policy measures to ensure that eastern European employees do not undeservedly occupy jobs in the Dutch labour market. FNV also approves of the sector-based testing approach. A majority of parliament members would also like to see stricter policies governing the transition to open borders. For example, the social partners should assess by sector whether Dutch employees are being displaced. Prime Minister Balkenende has taken the view of the majority of parliament members into consideration.
Marianne Grünell, Hugo Sinzheimer Institute (HSI)