Home / National Industrial Relations / Countries / Netherlands / Collective Bargaining

Collective Bargaining

The vast majority of employees in the Netherlands are covered by collective bargaining, mostly at industry level. However, many large companies negotiate their own deals. Negotiators generally follow the recommendations agreed at national level and recent pay increases have been moderate.

The framework

The pay and conditions of most employees are set through collective agreements reached either at industry or at company level. Collective agreements must be registered with the ministry of labour and its report on collective agreements in 2013, published in April 2014, shows that there were 701 current collective agreements at that time (current is defined as having an expiry date on or after 1 January 2013).1 These figures are for collective agreements covering normal pay and conditions issues. There are also a smaller number of agreements reached each year on specific topics such as early retirement or training – 434 in 2013.) The 701 agreements on normal pay and conditions issues cover 5,895,000 employees and with the official statistics office indicating that there were 7,018,000 employees in the Netherlands in 2013.2 This suggests that 84% of all employees are covered by collective bargaining.

 

 

Agreements at industry level account for the majority of those covered by collective bargaining. In 2013, the 182 agreements covering normal pay and conditions issues signed at industry level covered 5,341,500 employees. Of these 4,706,500 were covered directly, because the employers involved were members of the employers’ association which signed the agreements, and 635,000 were covered by the government making particular agreements generally binding throughout an industry. (These and subsequent figures come from the ministry of labour report.)

 

 

There were 519 normal company collective agreements in the same period covering 553,500 employees. Many of the largest companies, such as Philips, DSM or Shell, have company agreements. There is also a tendency for industry level agreements to become framework agreements, with some of the detailed provisions being negotiated at company level.

 

 

Union negotiators at both industry and company level work within a framework of recommendations coming from the confederations centrally, which are largely observed. These follow the traditional autumn meeting between unions, employers and the government who meet at national level to exchange views about economic prospects. The result in recent years has been a series of moderate wage rounds, although there were particular tensions in the autumn of 2004.

 

 

Unions, employers and independent experts come together in the social and economic council SER, which is a statutory body, whose task is to provide advice to the government and the parliament on economic and social issues. The SER consists of 11 union representatives (eight from the FNV, two from the CNV and one from vcp), 11 employers’ representatives and 11 experts, known as crown members. Representatives of government departments also attend as observers.3 ] Its reports play an important role in developing public policy.

 

Who negotiates and when?

 

 

Collective bargaining is conducted between employers and employers’ federations on one side and trade unions or groups of unions on the other.

 

 

There are few rules governing those who are entitled to bargain. The only requirement placed on trade unions is that the union should have a legal personality and that its rules should give it authority to bargain. This lack of restrictions on trade unions' freedom to negotiate is matched by similar freedoms for the employers. Dutch employers and employers' organisation have no legal obligation to negotiate with trade unions. Collective agreements between unions and employers depend entirely on both sides' willingness to negotiate. Normally bargaining is conducted on the union side by the full-time trade union officials, with the involvement of lay union representatives.

 

 

Works councils do not normally negotiate pay increases with employers, although they are involved in negotiations to implement elements of industry level agreements such as pay structures and the organisation of working time. In the past works councils were considered to be legally prevented from negotiating about primary issues such as pay. However, a 1992 court decision found that this was not prohibited. Despite this there are still only a few companies where pay is decided between the employer and the works council, and these are mainly in the ICT and chemical industries, where there is a higher proportion of companies who are hostile to unions – often based in the USA and Japan.

 

 

Collective agreements are legally binding on the membership of the employers' organisations and the unions that sign them. However, employers who sign an agreement are obliged to offer the same terms to non-union members, so in practice all employees are covered, whether union members or not. In addition, the parties to a collective agreement can ask the government to make its term generally binding on all employees in a particular industrial sector. For this to happen, the agreement must already cover a “substantial proportion” of those employed in the industry – normally 55% or more.

 

 

The negotiations round normally starts in November and goes on through the year. However, the vast majority of settlements are renewed between January and April. Agreements typically used to last a year but there is a tendency for them now to last longer – two years or even more. It is also taking longer to reach agreements. The ministry of labour’s report on collective agreement notes that in most years since 2009 the number of agreements registered has fallen. It believes that the “economically uncertain times for business” have had “an impact on collective bargaining, as it takes longer to arrive at an agreement”. Agreements remain in force after they expire, but only for the employers who were party to the agreement.

 

 

The subject of negotiations

 

 

Collective agreements cover a wide range of pay and conditions issues, including such things as early retirement, educational leave, the organisation of leave over the whole of an employee’s working life, the position of women, protecting those with disabilities and the environment. Increasingly agreements provide for a range of benefits, from which individual employees can choose. Agreements also deal with procedural issues like the powers and status of members of works councils or union groups at the workplace.

 

 

The Netherlands has a national minimum wage which is normally increased twice a year in January and July, provided that this is not judged to be damaging to employment. The minimum wage was not increased in 2004 and in the first half of 2005 because of an overall pay freeze. However, since then it has been increased, as normal, twice a year.

L. Fulton (2015) Worker representation in Europe. Labour Research Department and ETUI. Produced with the assistance of the SEEurope Network, online publication available at http://www.worker-participation.eu/National-Industrial-Relations.