New research shows that the chances of a worker in the Netherlands becoming stuck in flexible employment for more than three years have vastly increased. This is mainly because fewer workers on flexible contracts are being moved on to permanent contracts. In response, Minister of Social Affairs Lodewijk Asscher has announced that in autumn 2013 he will propose legislation to make it more difficult for employers to endlessly extend short-term and temporary contracts.
Flexible workers ‘stuck’
A study commissioned by the Dutch Minister of Social Affairs, Lodewijk Asscher, examined the socioeconomic situation of employees who find themselves working long term on flexible contracts. The research, by the agency SEO Economic Research, showed that flexible contracts had increased from 17% to 27% of the overall job market between 2000 and 2013. This was primarily caused by fewer workers moving from temporary to permanent contracts, rather than because of an increase in the numbers employed on temporary contracts. This means that the chances of an employee becoming ‘stuck’ for longer than three years in temporary employment have vastly increased.
The research findings support the minister’s decision to draft legislation to strengthen the rights of flexible workers. The minister has proposed, for example, that flexible workers should be eligible for a permanent contract after two years, rather than after three, as they currently are. He also wants to improve the position of on-call workers on zero-hours contracts.
The minister’s proposals will apply to all ‘revolving door’ structures, where flexible employees are laid off after a period of temporary employment – usually for the minimum period of three months that nullifies any claim to consecutive employment that might legally oblige the employer to offer a permanent contract – and are then rehired on another temporary or short-term contract.
Flexible employment more widespread
While the limited progression into permanent employment is largely because of the economic crisis, other factors are at play. There are signs that the labour market is changing structurally, with flexible employment contracts assuming a more significant place. Around 40% of all employees in 2013 have been on a temporary contract at some time. But there are differences within this group in terms of progressing into permanent employment. A fixed-term contract still offers the most potential for an employee to be offered a permanent position. Of those on a temporary contract, more than half are awarded a permanent position after three years and, of those employed on a temporary basis through an agency, more than 30% are awarded a permanent position after three years. The same applies with the 43% of employees working on the basis of a zero-hours or on-call contract. On average, one-third of flexible workers continue to work on the basis of a flexible contract, even after three years.
Most flexible employees are young
Youths have the greatest potential to move from a flexible relationship to a permanent position. The ceiling lies at around 33 years old, when 43% are awarded a permanent position; after this the chances of gaining a permanent appointment gradually evaporate. At the age of 58, only 27% of workers are offered permanent employment.
Between jobs, flexible employees turn to unemployment benefits. However, although they turn to unemployment benefits more often, compared with those who have become unemployed from permanent positions, they generally do so for a shorter period. There is also more financial pressure on flexible employees, as their average household income is slightly lower than that of permanent employees. This could be a consequence of more people contributing an income within the same household. It is noteworthy that flexible employees undergo additional training (generally self-financed, between contracts) more often than employees in permanent positions. Those in permanent employment more often undergo training at the expense of their employer.
Legislation against ‘revolving door’ structures
The minister will present a legislative proposal to the House of Representatives in the autumn, containing plans directed at combating ‘revolving door’ structures. One of the proposed measures is to reduce the period during which flexible contracts can be issued, from three to two years. This step derives from the social agreement hammered out between the government, employers and employees (NL1304019I). It establishes that employees may not be forced to continue working for a lengthy period on the basis of uncertain temporary contracts.
Marianne Grünell, University of Amsterdam