Abstract of advisory report:
Broadening support for collective agreements
(Verbreding draagvlak voor cao-afspraken, 13/03)
The collective agreement system currently enjoys satisfactory support. This system
is vital for labour relations in our country. However, with a view to the future,
parties to collective agreements must continue to work for broad support, e.g. by
getting employers and employees more involved in collective agreements and
particularly by engaging employees more effectively in the drafting of such
agreements. These are the conclusions of an advisory report issued by the Social
and Economic Council on 23 August 2013.
Satisfactory support
Approximately 80 percent of Dutch employees are covered by a collective
agreement. Research has shown that not only employees but also employers are
positive about these agreements and that members of employers’ associations and
unions that conclude the collective agreement and non-members scarcely differ in
their views.
However, there are concerns about the relationship between the union density of
employees and the support for collective agreements. At present, only about
20 percent of employees are members of a union. One reason for this low density
rate is that in the Netherlands, employees who are not members of a union may
nevertheless benefit from the collective agreement. An employer subject to a
collective agreement has a legal obligation to apply it to all employees, i.e. both
members and non-members.
Involve as many employees as possible in the collective agreement
consultations
The Council believes that as many employees as possible should be involved in the
collective agreement consultations, as this may compensate for low union density
and increase the legitimacy of the unions. The Council notes that parties to
collective agreements have now taken initiatives to include non-members in the
consultations. It is urging them to continue this trend and to intensify the process
where necessary.
Flexible instrument
For collective agreements to remain relevant – and to continue to enjoy support –
labour market developments such as greater individualisation and more flexibility
must be taken into account. The flexibility of the collective agreement enables the
parties to do so. This has recently led to the introduction of new issues such as
personal training budgets, a focus on sustainable employability, accreditation of
prior learning and ‘from-job-to-job’ programmes. Customised solutions are possible
in almost all collective agreements.
Labour market changes
A striking development on the labour market is the emergence of own-account
workers. As entrepreneurs, they are not, in principle, covered by a collective
agreement, which has a bearing on the significance of the agreement in the sector
in question. This also applies to the growing number of foreign workers to whom
collective agreements are not always applied.
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In the case of improper competition, e.g. bogus schemes, enforcement is the most
obvious means of maintaining support for collective agreements. Arrangements
have been made regarding this matter in the recent Social Agreement and in the
Bogus scheme strategic action plan.
It is also up to the relevant parties to respond to new developments in order to
strengthen support for collective agreements. One possibility is to allow ownaccount workers to participate in training arranged via a collective agreement.
The advisory report has been drawn up by the Council’s Labour and Corporate Law
Committee, under the chairmanship of Evert Verhulp. It is a response to a request
for advice from the former Minister of Social Affairs and Employment, Henk Kamp.
The reasons for the request for advice were several debates in the House of
Representatives about the system of collective agreements and declarations of
universally binding status.
© Social and Economic Council. All rights reserved. Material may be quoted, providing the source is mentioned.
Translation: Balance, Amsterdam/Maastricht
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Frequently asked questions about the ‘Broadening support for collective
agreements’ advisory report
Who requested the advice?
The former Minister of Social Affairs and Employment, Henk Kamp, asked the
Council for advice on 29 June 2012.
What were the reasons for this request for advice?
The reasons for the request for advice were several debates in the House of
Representatives about the system of collective agreements and declarations of
universally binding status.
What was the question submitted to the Council?
The minister wished to know whether initiatives already being taken by employers
and employees to increase support are sufficient or whether the system must be
adjusted. Collective agreements usually apply to all employees in a certain sector or
business. Consequently, the minister considers it important that the parties that
conclude the agreement have sufficient support. The minister considers broad
support among employers and employees as vital if the system of collective
employment conditions is to function effectively. According to the minister, research
has shown that the current collective agreement system has satisfactory support.
However, consideration should be given to strengthening this support in the
medium to long term. This is necessary due to an ageing and declining union
membership and social developments such as individualisation, arranging
employment conditions at local level and greater flexibility on the labour market.
What is the conclusion of the advisory report?
According to the Council, there is currently satisfactory support for collective
agreements and collective agreement arrangements. Collective agreement
arrangements are viewed positively by those covered by the agreement, and there
is little or no difference between members of trade unions and employers’
associations and non-members in this respect. Collective agreements are largely
viewed positively also in public and political opinion and the important role of the
collective agreement system and the consultation economy for the socio-economic
position of our country is recognised. However, there are concerns about the
declining union density of employees. Consequently, the Council believes that it is
vital for parties to collective agreements to increase the direct involvement of
employees and employers. This can be achieved by enlarging the membership of
trade unions and employers’ associations and by involving both members and nonmembers in the collective agreement process.
What is a collective agreement?
In a collective agreement (CAO), employers and trade unions conclude binding
arrangements regarding the employment conditions of employees in a certain sector
or business. The arrangements relate to salaries, travel allowances, holidays,
working hours, working conditions, etc.
How many employees in the Netherlands are covered by a collective
agreement?
According to figures from the Ministry of Social Affairs and Employment,
approximately 80 percent of employees (6.1 million employees) are covered by a
collective agreement.
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Why is it that a collective agreement also applies to employers who are not
members of an employers’ association and to employees who are not
members of a trade union?
In the first instance, a collective agreement applies only to employers and
employees who are members of the organisations that have concluded the
agreement. The fact that a collective agreement also applies to employees who are
not members of the trade union in question is because the Collective Agreements
Act (Wet cao) stipulates that ‘bound’ employers are obliged to apply the collective
agreement to all their employees, irrespective of whether they are members of a
trade union. If bound employers can employ non-union members under cheaper
employment conditions, this could have unfavourable repercussions for trade union
members. Moreover, such a situation could disrupt industrial harmony.
The fact that a collective agreement may apply to all employers and employees in a
sector ensues from the Collective Agreements (Declaration of Universally Binding
and Non-Binding Status) Act (Wet avv). The Minister of Social Affairs and
Employment can declare a collective agreement to be universally binding. In that
case, the collective agreement will apply to all employers and employees in a
sector, and therefore also to employers (and their employees) who were not
involved in the conclusion of that agreement. The declaration of universally binding
status prevents undesirable competition regarding employment conditions.
What is the employee union density rate and the employer organisation
density rate in the Netherlands?
The organisation density rate among employers is high: approximately 80 percent.
This is because employers have clear benefits in being members of an employers’
association. The union density rate among employees is lower. Approximately 20
percent of employees (1.8 million people) are members of a union. Union
membership differs according to age (older workers are more likely to be members
than younger workers) and the nature of the employment agreement. Membership
is higher among employees on permanent contracts than employees on flexible
contracts and higher among full-time employees than part-time workers.
Membership also differs according to the sector (higher in the public administration,
education and building sectors, and lower in the commercial, catering and services
sectors), the size of the business (higher in the case of large companies) and the
region (higher in the north).
Why is the union density rate among employees in the Netherlands so low?
This is because in the Netherlands, employees who are not members of a union can
nevertheless benefit from a collective agreement. An employer subject to a
collective agreement has a legal obligation to apply it to all employees, i.e. both
members and non-members. Research has shown that employees think it is
important to have trade unions and collective agreements and that they value those
agreements, but in spite of this only a limited number of employees are members of
a union.
What is the union density rate among employees in other European
countries?
There are substantial differences in density rates between various countries.
Countries such as Sweden (SE), Denmark (DK), Finland (FI) and Belgium (BE) have
high density rates. France (F) , Spain (ES), Estonia (EE), Lithuania (LT) and the
Netherlands (NL) have low density rates.
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How can the differences in union density rates in various countries be
explained?
The free rider situation explains the relatively low density rates in the Netherlands.
In European countries where employment conditions are linked to membership of a
union (Sweden) or a supplementary unemployment insurance is arranged via the
unions (Sweden, Finland, Denmark and Belgium), employee union density is
substantially higher.
How do trade unions and employers involve non-members in collective
agreement consultations?
They do this in various ways. These include providing (on-line) information about
the start, the objectives, the progress and the result of the collective agreement
consultations. Furthermore, panels, group discussions, surveys and large-scale
interventions are used to gaugethe opinions of all employees (and sometime
employers too). Involvement can be increased not only at the start of the collective
agreement process (what are the objectives) but also at the end (what are opinions
regarding the result) or when detailing an agreement (about the implementation of
the arrangements).
Co-creation is a relatively new method of organising involvement and support. This
involves consultations between various sections within a business or sector,
including both employers and employees, to arrive by means of dialogue at, for
instance, a new collective agreement or a renewal of parts of an agreement. In
many cases, unions involve non-members in the process of creating a collective
agreement. Non-members may often attend trade union meetings and may
participate in polls or referenda.