Dutch labour relations mco 20150410

Dutch Labour Relations

D U T C H L A B O U R R E L A T I O N S

M A R C H 2 0 1 5

M A R T I N O V E R B E E K EH R M - W O R K P L A C E

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©hrm-workplace 2015

NEDERLANDSE ARBEIDSVERHOUDINGEN

[email protected]

DUTCH LABOUR RELATIONS


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PART I GENERAL

1. THE NETHERLANDS

2. LABOUR AND INDUSTRIAL RELATIONS

3. COLLECTIVE LABOUR AGREEMENT (CLA)

4. WORKS COUNCIL

5. LEGISLATION

PART II COMPANY SPECIFIC

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THE NETHERLANDS

Je maintiendrai"

• Constitutional monarchy• Parliamentary democracy since 1848• Approx. 17 million inhabitants (78% Dutch)• Highly densely populated (497 people/square km)• Low country, about 50% under sea level• Long history of tolerance. Liberal climate• 15th positon Index of Economic Freedom Index 2014

• Strong export position (21 % Agro)• Well educated population 38% of the age group 24-35 yr

has a HBO (Bc/Master) or Academic degree (Master/Phd)

• High level of wealth and happiness (3th in global rankings)

http://en.wikipedia.org/wiki/Index_of_Economic_Freedom#2014_ranking_with_more_attributes

THE NETHERLANDS


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Amsterdam Capital city

Financial and business (AEx)

The Hague Government

International Court

Political Centre

Rotterdam Main port Europe

Chemical Industry

Eindhoven Science Centres / Innovation

Electronics / automotive

Randstad

THE NETHERLANDS


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Economic growth 1.25% (2015)

Unemployment 6,7% (605k)

CPI 1,25%

Gov. Deficit -2,2% Gbp

Gov . Dept. 70% Gbp

GBP 467 Bill.

State budget 267 Bill.

Population 17 million

Workers 8.4 million

Universities 14 8 University Medical Centres

Absenteeism rate 3.9%

Lost day by strikes 19.000 days (0,001% in 2013 )

DUTCH PEOPLE


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What Dutch think and do What foreigners see (at times)

Liberal and tolerant Tolerating all (drugs, sex, euthanasia)

Sober Low empathy

Individuals Social, but not warm welcoming

Cycling Cycling

Dialogue – Polder model Who is in charge? Endless consultation

Windmills, tulips, wooden shoes Amsterdam

Men of the world Narrow minded, business first

Multi lingual Mainly English

Pragmatic Punctual

Rhineland model Anglo-Saxo model

Direct, Open Rude

SECTORS OF INDUSTRY


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3 Main sectors

Agrifood

Chemical

High Tech

QUIZZ - WHO ARE THEY?


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LABOUR MARKT


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TRENDS

Globalization

ICT

Aging

Decentralization

Anglo-Saxon culture

EFFECTS

International Enterprises

Growing service industry

Declining manufacturing

Changing labour market

Higher pension age (67)

Growing flex labour

Productivity / Quality

Long term unemployment

Increasing difference between haves and have nots

FACING SHIFTS


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Employers Flexibility

Productivity

Quality

Competition

Cost

Shortness of talent

Employees End of life time

employment

Mobility

Work-life balance

More responsibility

Fit to work

Up to standard competences

High demands / educ.

Longer work life

OLD-AGE DEPENDENCY RATIO


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Source: Eurostat

MEASURES• Pension age to 67 year• From Defined Income to

Defined Benefits• Lower accrual rate

1.875%/yr• Maximum pensionable

income 100.000 Euro• Average pension age in

2014 was: 64 year • High tax penalty for

early retirement on employers initiative

0

10

20

30

40

50

60

70

2013 2020 2030 2040 2050 2060 2070 2080

Projected old-age dependency ratio

EU (28 countries) Belgium Germany France Netherlands

EMPLOYERSHIP


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LABOUR AND INDUSTRIAL RELATIONS


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STICHTING VAN DE ARBEIDhttp://www.stvda.nl/

The Labour Foundation is the highest national consultative body which provides a forum in which its members discuss relevant issues in the field of labour and industrial relations. Its members are:

3 Employers associations:

Vereniging VNO-NCW

Koninklijke Vereniging MKB-Nederland (MKB)

Land- en Tuinbouw Organisatie Nederland (LTO)

3 Union Federations

http://www.stvda.nl/



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FOUR UNION FEDERATIONS 1.8 MILLION MEMBERS

1. FNV - Federatie Nederlandse Vakbeweging http://www.fnv.nl/

2. CNV - Christelijke Nederlandse Vakbeweginghttps://www.cnv.nl/

3. VCP – Vak Centrale voor Professionals (Legacy MHP)http://www.vcp.nl/

4. De Unie http://www.unie.nl/

Number of members has decreased slowlyAverage age of union member increasesApprox. 1 on 5 workers in average is member of an union

http://www.fnv.nl/

https://www.cnv.nl/

http://www.vcp.nl/

http://www.unie.nl/



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Industrial Relation Partners for the Chemical Industry

AWVN – Dutch Employers Associationhttp://www.awvn.nl/

FNV – Sector Industrie CNV – Vakmensen De Unie – Industrie en Handel VCP

VNCI Vereniging Nederlandse Chemische Industriehttps://www.vnci.nl/english/

VNCI promotes the collective interests of the chemical industry but is not an partner in industrial relations or negotiations about collective labour agreements

http://www.awvn.nl/

https://www.vnci.nl/english/



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CONSULTATION ALONG TWO LINES

Board / Management

Employees

Works Council

Unions

Works Council Act

CLA’sSocial Plans

Union Official

Members

Employed bythe unions

Members are employees

COLLECTIVE LABOUR AGREEMENT (CLA)


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Act CLA (wet op de collectieve arbeidsovereenkomst, 1927)

Employers association or Management versus Unions

80% of Dutch contracted workers are covered by a CLA

CLA as: Sector CLA (f.e.: construction, metal, printers, agriculture, civil, etc.)

Business CLA (single company, f.e.: Philips, DSM, etc.)

Regulations apply to all levels mentioned in the CLA

Distinction between union members and unbound employees is not allowed by law

A CLA is not mandatory, unless a company is bound by a sector CLA

COLLECTIVE LABOUR AGREEMENT (CLA)


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The CLA is incorporated in the individual labour contract

CLA for a average period of 1 or 2 years. (Law max. 5yr)

The (lavel) application range up to €50.000 á €70.000

Companies without a CLA may set rules or submit a staff handbook (personeelshandboek of bedrijfsreglement).

CLA - PROS AND CONS - EMPLOYER


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Advantages Stable social climate

Cost control

Risk reduction

Good Industrial relations

Acceptance by employees

Equality of treatment

Quality of negotiations

Disadvantages Conflict of interest

between goals of unions and business

Change of entrenched interests is difficult

Representation degree union members

Time and effort required to reach an agreement

TYPICAL POINTS OF NEGOTIATION


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Rewards

Working time

Job security

Pension scheme

Working conditions

Safety and Health

Employability

Ageing

Participation

Etc.

TRENDS IN INDUSTRIAL RELATIONS


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Job security

Flexibility Less rules

More local control

Exchange income <> time

Tailor made conditions

Sustainable Employment Labour conditions

Workload and workability (stress)

Health management

Education and training

Increasing pension age

Dutch Labour Relations

WORKS COUNCIL

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ONDERNEMINGSRAAD

DUTCH WORKS COUNCIL


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Law: Wet op de ondernemingsraden (1971) WOR - English

Works council in Dutch: Ondernemingsraad (OR)

A works council is obliged for companies with more than 50 employees

A voluntary employee representative body can exist for smaller companies (<50 employees)

The number of members depends on the size of the company (art. 6 WOR)

A works council may set up (temporary) committees to prepare matters to be dealt with by the OR (i.e. HSE, Finance, etc.)

Multinationals with > 1000 employees and at least 150 employees in two or more EG countries must comply with the European Works Councils Directive EWC Legislation

http://www.or-online.nl/naslag/wetten-regelingen/the-works-council-art

http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=URISERV:em0019&qid=1421616508764&from=EN

DUTCH WORKS COUNCIL


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CONSULTATION MEETING

Consultation meeting (overleg-vergadering) after a request of the entrepreneur or the works council within 2 weeks

For matters relating to the enterprise concerning on request of the entrepreneur or the Works Council

The works council may submit proposals. The entrepreneur shall not take a decision on the proposal until it has been discussed at least once at a consultation meeting. (art. 23 initiatiefrecht)

Consultations shall be conducted on behalf of the entrepreneur by the director or general manager of the enterprise.


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Powers of the Works Council

Right on:

Consultation Article 23 - Initiatiefrecht

Advice Article 25 - Adviesrecht

Appeal Article 26 - Beroepsrecht

Endorsement Article 27 - Instemmingsrecht

DUTCH WORKS COUNCIL

DUTCH WORKS COUNCIL


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RIGHT ON ADVICE (ART. 25)

The entrepreneur shall give the Works Council an opportunity to render advice on any decision he proposes to make with one of matters as named in article 25 points a to n.

PROCESS

1. The entrepreneur shall submit the proposed decision in writing to the Works Council for its advice. This advice shall be requested at a time when it can still significantly affect the decision to be taken.

2. The Works Council shall not give an advice until the matter in question has been considered in a consultation meeting

3. After advice by the Works Council, the entrepreneur shall asap send a written notification of the decision to the WC

4. If the decision is conflicting with the advice, the entrepreneur shall postpone implementation of the decision one month.

DUTCH WORKS COUNCIL


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RIGHT ON ENDORSEMENT (ART. 27) - InstemmingsrechtThe endorsement of the Works Council shall be required for every proposed decision on the part of the entrepreneur to lay down, amend or withdraw of a matter as called under article 27 points a to l.

PROCESS

The entrepreneur submits his proposed decision in writing to the Works Council inclusive a summary of his reasons and consequences for persons working in the enterprise.

The WC shall not decide until the matter has been discussed in at least one consultation meeting.

The WC asap notifies the entrepreneur of its standpoint

The entrepreneur notifies the WC of his decision and the date upon the decision will take effect.

Any decision taken without the endorsement of the Works Council or the permission of the subdistrict court judge shall be invalid.

WORK AND SECURITY ACT (2015)


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The purpose of the (new) Work and Security Act (Wet Werk en Zekerheid – Wwz, 2015) is to contribute to decent employment.

Therefore, changes are made in three areas:

Flex Right(s)

Dismissal

Unemployment

WORK AND SECURITY ACT (2015)


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More security for flex workers

Maximum duration 2 years, then permanent contract

Interval between two contracts minimal 6 months

Temporary contract, notice 1 months before the end date of the contract.

Unemployment Act WW

Duration from 38 to 24 months *)

Guidance from work to work

After 6 months WW benefits, all labour is seen as adequate

Structure WW: 1ste 1o yrs1 month sal./yr in serv., then ½ month sal/yr.

DISMISSAL


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Three options:1. Prudential resignation and dismissal by long-

term disability through the UWV (labor office);2. Dismissal for other reasons by the cantonal

judge;3. The procedure time with the labor office or

cantonal judge can be deducted from the period of notice. Minimum notice period min. 1 month.

• In case of concluding a termination agreement has the employee a cooling off period of 14 days.

TRANSITION FEE


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At dismissal by the employer and employment for 2 years or more, employee has a right to a transition fee.Structure: 1/3 month's salary per year of service for 1st 10 years and then a half month's salary per year of service.

Compensation max. € 75.000 or an annual salary

Outplacement costs can be subtracted from the fee

In severe culpability of the employer, the district court may grant an additional fee

DIFFERENCE


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KR Formula (Old)

A * B * CA = duration of employmentB = salaryC = correction factorIs no right

OLDAge 54, 20 yrs. in service, C=125 month salaries

KR = Cantonal Judge

Transition allowance (New)

First 10 yr: 1/3 month/yrAfter 10 yr: 1/2 month/yr 50 year transitory

Is a right

NEWAge 54, 20 yrs. in service11 month salaries

Max €75.000 or higher if annual salary is more than €75.000/year

DISABILITY DUE TO ILLNESS


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Continued payment of wages during illness period (Ziektewet)

First 12 months 70% of income - at least minimum wage

Plus 12 months 70% of income Total 24 months of sickness benefit

Many companies add up to 30% for 12 or even 24 months

Illness payments (up to 70%) can be insured on the market

Illness is reported to the direct manager plus company doctor

After 6 weeks of illness a formal problem analysis and a resumption plan has to be made by the manager and the company doctor

At week 42 the UWV (labor office) has to be notified about the case

After 24 months of illness, the employee is entitled to get a payment from the WGA (Act resumption partially disabled)

The cost of prolonged illness are very high

First priority is prevention!

LANGDURIG ARBEIDSONGESCHIKT


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Act resumption partially disabled

After 24 months of illnes > WGA (Wet werkhervatting gedeeltelijk

arbeidsgeschikten)

Very complex

Can be insured by state or insurance company

No payment in case disability is less then 35%

Negative financial effects for employees can be repaired by: CLA

Individual WGA Insurance

The cost of prolonged illness can be extreme high. Ask always professional advice!

PART II – COMPANY SPECIFIC PART


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