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Financial Participation

The Dutch debate on employee financial participation has been dominated since the 1990’s by criticism of share options for top executives. Criticism was directed at the size of executive remuneration and the unequal access to such options. A number of trade unions were opposed to any wide-based employee financial participation schemes. The position of Dutch trade unions on employee financial participation has changed a little, with broad-based participation models now being supported, insofar as they do not involve converting regular wages.

After their initial opposition to the concept of employee financial participation at the beginning of the debate, parts of the trade union movement began in the course of the debate on share options for top executives to realise that, by their opposition, they had given management the necessary leeway to introduce share options for restricted groups of employees. The ‘De Unie’ union at Philips was the first to demand ‘shares for employees’ in wage negotiations. Other trade unions consequently followed suite in other branches such as the banking sector.1

There is a basic trade union wariness over employee financial participation due to the risks to employees of companies going bankrupt. Profit-sharing schemes are therefore preferred.2 Financial participation will not be accepted as a wage substitute, but only as a supplementary wage element. Trade unions feel that any participation scheme must be agreed upon by workers’ representatives. The Dutch government holds the view that participation schemes must be negotiated by the social partners.

Wilke, Maack and Partner (2014) Country reports on Financial Participation in Europe. Prepared for www.worker-participation.eu. Reports first published in 2007 and fully updated in 2014.