Government and social partners agree social agenda for the 21st century

The Dutch government and social partners have reached agreement on a package of short-term measures to stimulate economic recovery and adapt the labour market to the needs and demands of the 21st century. They have opted for a more active approach to prevent unemployment and help people move from one job to another, preferably before they become unemployed. The social partners and the government agree that the goal is to minimise the time spent on unemployment benefit for the good of employees, employers and public finances.

  • Employers and employees will together be responsible for preventing unemployment wherever possible. One way of doing this is to facilitate job mobility. In keeping with this changing division of responsibilities, the labour market's social infrastructure will also be revised.
  • To ensure equal treatment, compulsory procedures for termination of employment will be introduced. Employees threatened with redundancy will also be entitled to an allowance to enable them to train for a new job.
  • The position of employees with temporary contracts will be strengthened.
  • Business owners will help an additional 100,000 people with an occupational disability find work. The government will help an additional 25,000.

The Minister of Social Affairs and Employment, Lodewijk Asscher, expects the agreement with the social partners to have a positive impact on the economy and employment. 'This agreement can make an important contribution to restoring confidence.'
If the recovery continues and the economy picks up again this year, the government thinks it may not need to make additional savings to lower the budget deficit to 3% or less of GDP. The measures announced to cut spending by an additional €4.3 billion next year could then be scaled down or even withdrawn. The social partners were concerned that the measures would hinder economic recovery. When preparing its 2014 budget for presentation on 17 September 2013 the government will consider whether the forecast economic growth and associated improvement in public finances will enable it to abandon the additional measures.
Mr Asscher believes the agreements with the social partners are a template for the labour market of the 21st century, with the social partners bearing more responsibility and combating unemployment more actively by helping people find new work before they become unemployed. 'Security of employment is at the heart of the agreements.' The government and social partners have reached a series of agreements that complement this approach to the labour market.

Flexible staff

Mr Asscher will present proposals to strengthen the position of flexible staff as from 1 January 2015. Employees with a temporary contract will qualify for a permanent contract more quickly and will have more security. The minister will appoint additional inspectors to tackle sham employment arrangements more effectively.
Law on termination of employment
The law on termination of employment will continue to protect employees from arbitrary decisions. 'This protection is not open to discussion and will remain in full force,' said Mr Asscher. But he wants the law to be fairer and simpler. At present, employers select which redundancy procedure they use for their employees. Employees in the same situation are therefore not always treated equally. Many high-income employees are awarded a golden handshake by the court, whereas many low-income employees do not receive a redundancy payment from the Employee Insurance Agency (UWV). The minister wants to end this inequality before the law by terminating the employer's right to select the procedure. The UWV procedure will be compulsory if employment is terminated for commercial reasons and in cases of long-tem incapacity for work. The court procedure will be compulsory if there is a personal conflict or if the contract is being terminated for personal reasons.

Transitional allowance

Employees whose contracts have been terminated will be entitled to a transitional allowance if they have been employed for at least two years. This will make it easier for them to find a new job or switch careers. The money can be used for training or outplacement purposes. The allowance will be based on employment history: employees will receive a third of their monthly wage for every year of employment and half a month's wage for every year in excess of ten years. A transitional scheme will be introduced for employees aged over 50.

Unemployment benefit

The maximum duration of unemployment benefit paid from the public purse will be reduced in steps - by one month per quarter - as from 2016 so that the maximum duration of the benefit paid by the government is two years as from 2019. Mr Asscher will also facilitate supplementary unemployment benefit schemes agreed between employers and employees in collective labour agreements. Employers and employees will thus have more control over unemployment benefit, with each group bearing half of that part of the unemployment insurance contributions currently paid from the public purse.

Everyone who can work will work

The government and the social partners have agreed on a new approach to help people with an occupational disability find work with ordinary employers in the private sector and in the public sector. The private sector will help an additional 2,500 people with an occupational disability find work next year and 5,000 in the following year. The number will then increase by 1,000 per annum so that an additional 10,000 people are found work each year as from 2020. Employers expressed their willingness to participate in this scheme to find work for 100,000 people with an occupational disability.
The government will help an additional 25,000 people find work, beginning with 2,500 in 2014. If the annual target is not achieved, the State Secretary for Social Affairs and Employment, Jetta Klijnsma, will introduce a quota scheme.
Thirty-five regional public employment services will be established to help people with an occupational disability find work with an ordinary employer. The public employment services - a joint undertaking between municipal authorities and social partners - will form the new link between employers and people with an occupational disability. They will provide assistance at the workplace and, in consultation with the employers, set the employees' wage rate. The employer will pay the employees in accordance with the applicable collective labour agreement and receive the difference between the set wage rate and the statutory minimum wage from the government in the form of a wage cost allowance. Municipalities will arrange sheltered employment through the public employment services for people with an occupational disability who require more support than can be expected from an ordinary employer.
The public employment services will arrange sheltered employment for people with an occupational disability as from 1 January 2015. The incapacity insurance scheme for young disabled persons will remain in force but only for those who will never be able to work.

Pensions

The maximum tax incentive to accumulate a pension will be reduced by 0.4%. Furthermore, the incentive for pensions above pensionable earnings of €100,000 per annum will be discontinued. To underpin purchasing power, the government has called on the social partners to reduce pension contributions where permitted by the pension funds' financial position.
The social partners have indicated they will seek alternatives or supplements. The government will give them until the end of May 2013 to do so. The structural impact on the budget may not exceed €250 million.
The state pension age was raised for the first time, by one month, on 1 January this year. A bridging scheme will be introduced for low earners who are in an early retirement scheme and who were unable to make provision for this increase. In response to the social partners' request to widen the bridging scheme, the government will extend its scope to include participants earning up to 200% of the statutory minimum wage (300% for couples).
The social agreement still needs to be approved by the members of the employer and employee organisations. Its current status is that of a 'negotiators' agreement'.
The government will ask parliament to support the agreements that have been made. The proposals will then be developed into legislation in consultation with the social partners and parliament.