Dutch Coalition Announces Changes to Balance Job Market

april 5, 2023

Karien van Gennip, Dutch Minister of Social Affairs and Employment, announced changes in the law to establish balance in the Dutch job market. Among these adjustments is a faster permanent contract after three temporary contracts and the disappearance of zero-hour contracts. Does this ensure hope and prosperity for the employer and employee?

The state of the job market

The current Dutch job market is characterized, according to Commission Borstlap, by a growing dichotomy between employee and employer. The analysis argues that the risks are unequally divided and that therefore the employees need support in the job market. As the country faces economic challenges, it is more important than ever to find ways to balance the needs of both employees and entrepreneurs. In the words of van Gennip, this requires a focus on social cohesion and active participation in building a sustainable livelihood for all. Providing perspective in the job market equals in this case protecting employees while still enabling agility for entrepreneurs. With these changes in Dutch law, the balance in the job market should become evident again. Especially in the current state of the government coalition and the various crises like the nitrogen crisis, housing crisis, and immigration crisis, it is more than important to show the world that the Dutch can still resolve problems. Moreover, this hope and prosperity will also be ensured for the employee and the employer.

Temporary contracts

Employers can provide the employee three times with a temporary contract. Whereas previously the employee could either give a permanent contract or have a “contract break” for six months, the new regulations aim to stop this type of construction. By increasing the break from six months to five years, the government pressures employers to give a permanent contract faster. In this way, temporary work gets less attractive for employers and employees can expect more stability after three temporary contracts.

Zero-hour contracts and self-employed people

Another strict rule, as part of Minister van Gennip’s package of 37 new measurements to improve the labour market, is the total ban on zero-hour contracts. While this is another disincentive for temporary work, on-call workers will soon receive a fixed basic contract for the minimum number of hours for which they are in any case scheduled. This increased stability and minimum hours on contract also apply to employees who work through an employment agency. Moreover, the cabinet has decided that self-employed people are obliged to take out disability insurance. Currently, self-employed people can decide if they are willing to pay for this insurance.

Illness

Besides the fact that employees get more stability in the job market, the rules will also be adjusted for entrepreneurs. One of the examples is that they can, after one year of illness of an employee, obtain clarity if structural replacement is necessary. Currently, and mainly applicable to smaller companies, is that this clarity is given after two years. In the case of the sick employee recovering in the second year, the employee can only return if 1) the position has not yet been filled, and 2) there is a vacancy. Understandably, employers have financial advantages by getting disclosure after just one year. On the other hand, the employee’s position in the second year of being absent can be uncertain and, with this new package of regulations, is aimed to be improved.

Additionally, the cabinet, following the analysis of Commission Borstlap, is setting up a form of part-time unemployment benefit for companies. In the case of a calamity or crisis, the companies can have their staff work less or work in a different location for a maximum of six months without being at expense of the unemployment benefits. While this only applies to companies in this particular category, the flexibilization on the Dutch labour market will get reduced. This regulation is beneficial for both the staff and the employer, as the staff can keep their jobs and the company can reduce costs while staying afloat.

Reaction

The CNV and FNV trade unions have praised the Dutch government’s announcement to end the excessive use of flexible employment. The CNV states that the proposed measures will provide the job security that they have been fighting for, while FNV welcomes the recognition that permanent contracts should be the norm for structural work. Both unions call for swift implementation of the measures to reduce the number of flexible workers, which has exploded in the past decade, and increase job and income security for workers. FNV president Tuur Elzinga concludes that the overrunning of flexibility on the Dutch labour market needs to stop and that “for people who have no security of work and income, every day counts. Now it is finally the time for the practical proposals to be adopted. So let the cabinet and parliament act quickly”.

Sources

https://www.rijksoverheid.nl/actueel/nieuws/2023/04/03/meer-evenwicht-op-de-arbeidsmarkt

https://www.rijksoverheid.nl/documenten/kamerstukken/2023/04/03/kamerbrief-voortgang-uitwerking-arbeidsmarktpakket

Picture by Pixabay: https://www.pexels.com/nl-nl/foto/zwarte-pen-geplaatst-op-wit-papier-261679/

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