So much for the collective labour agreement!

The Dutch Minister for Social Affairs, Henk Kamp, wants employers to be able to set the applicable collective labour agreement ...

The Dutch Minister for Social Affairs, Henk Kamp, wants employers to be able to set the applicable collective labour agreement aside if there is another economic downturn. During the credit crunch, part-time work supplemented by unemployment benefit was the solution used. Businesses didn’t have enough work to go around but still kept staff employed.

The government’s contribution was to pay these employees unemployment benefit for the hours that they were no longer working. Everyone benefited. Employees remained in employment, employers retained their staff in readiness for an upturn and had scope for extra training and the government didn’t have to pay full unemployment benefit. This part-time unemployment benefit arrangement kept the unemployment figures down.

Despite the success of this scheme, the Minister doesn’t consider that things have gone far enough to make part-time unemployment benefit available again yet. Which makes it all the more surprising that he does consider it acceptable to set aside collective labour agreements. Collective labour agreements ensure that employees in equivalent positions are treated equally and that payment is fair. They prevent exploitation. This alone is sufficient reason to uphold collective labour agreements. In addition, such a move would exclude the unions, when it is precisely in times of crisis that the parties representing employees and employers need to work together.

What would be the result? 1. Employees would feel the effects of a crisis much more clearly in their wage packets if the collective labour agreement ceased to apply. 2. The state would not have to pay as much unemployment benefit. 3. A reduction in the effect of collective labour agreements and employment conditions could be forced through. As lawyers acting for employers and employees and advising Works Councils, our experience is that practical discussions about solutions and improvements that may contribute to a solution can aid the recovery of a business in difficulties. The best way to deal with a crisis is to work together, even though redundancies are sometimes unavoidable. Dispensing with the collective labour agreement is unlikely to solve the problem.