Why does consultation play such a significant role in the Dutch economy?
Trade unions and employers’ organisations in the Netherlands use consultation as a tool for achieving consensus on the objectives of social and economic policy and the means used to attain those objectives.
The two sides of industry consult at various levels. At the company level, the elected works council consults with company management. At the industry level, the trade unions and employers’ associations consult on collective employment terms. And at national level, the two sides engage in consultations in the Social and Economic Council and the Labour Foundation.
What is the difference between the Social and Economic Council and the Labour Foundation?
| Social and Economic Council |
Labour Foundation |
| Founded by law in 1950 (public law) |
Founded by national employers’ federations and trade union confederations in 1945 (private law) |
| Tripartite: employers, employees and members appointed by the Crown |
Bipartite: employers and employees |
| Advises Cabinet and Parliament; monitors regulatory industrial organisations (PBO); co-administrative duties and promotion of commerce and industry |
Platform for ongoing consultations between employers and employees; issues recommendations to commerce and industry; meets with Cabinet twice a year (spring and autumn meetings) |
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What percentage of employers and employees are members of representative organisations?
The overwhelming majority of employers – about 90 percent – are members of an employers’ association. That is largely because membership of such an association offers employers clear advantages.
Approximately 25 percent of employees (1.8 million people) are members of a trade union. It is not always clear what employees have to gain by joining a trade union. After all, non-members and members alike enjoy the benefits of the union’s work, for example, coverage under a collective agreement. Nevertheless, trade unions have strong support in the Netherlands. Surveys have shown that the majority of all employees have a positive opinion of the trade unions.
What is a collective agreement?
A collective agreement is a binding agreement between employers and trade unions in which they lay down the employment terms of employees in a certain sector of industry or company. A collective agreement is valid for no more than two years.
Initially, only employers that are members of a party to the collective agreement need apply the agreement in their companies. All their employees, whether or not they are union members, must be covered by the agreement. The Minister of Social Affairs and Employment can, however, declare a collective agreement binding on an entire industry. In that case, the collective agreement covers all employers and employees in that industry, even those employers – and their employees – that were not involved in negotiating the agreement. Declaring a collective agreement binding on an industry prevents employers from competing on employment terms. More than 84 percent of employees are covered by a collective agreement.
Is the consultation economy – often known as the “polder model” – a typically Dutch phenomenon?
No, there are variations on the consultation economy in other countries as well. For example, collective agreements are common in many other countries, and you will also find bodies similar to the Social and Economic Council, both within and outside the European Union. These countries also realise how important it is for labour, management and the government to work together. The composition of such bodies and their duties may differ from the Dutch model, however. For example, in some countries, the government is also a member of the social and economic council.
The Dutch Social and Economic Council has co-founded an association of social and economic councils and similar institutions around the world. The purpose of the association is to encourage dialogue between its members and to promote the establishment of social and economic councils or similar bodies in other countries. The association has more than forty members in Europe, Africa, Asia and Latin America. See: www.aicesis.org
At the European level, moreover, the European Union has established the European Economic and Social Committee (EESC). See: www.esc.eu.int