Employees in red vests, a coffee cart and union officials stood on the doorstep of the Actium housing association last week. At the office in Assen, employees of northern corporations kicked off a 'strike relay', which will spread to the rest of the country in the absence of a better wage offer.
The collective labor agreement that needs to be renewed was concluded in March 2022. Employees received 3 percent extra salary that year, and 2.4 percent in 2023. But then, driven by the war in Ukraine, inflation rose to record levels. Everything became more expensive, from groceries to energy. For purchasing power repairs, housing association employees had to wait for new collective labor agreements – which collapsed in December. The Collective Labor Agreement for Residential Services has expired since January 1.
The approximately 24,000 employees of the corporations are not the only ones who have not yet received a salary adjustment after the wave of inflation. Another several hundred thousand people work in sectors with a collective labor agreement dating from before the summer of 2022, according to employers' association AWVN. And just from that summer onwards, inflation rose to above 10 percent.
Discussions and grumbling
The people who still fall under such an 'old' collective labor agreement that has not been adjusted for the inflation peak, make up roughly 5 percent of the more than six million Dutch people with a collective labor agreement. In addition, there are approximately three million workers without collective wage agreements, for example because they are self-employed or work in a sector without a collective labor agreement.
While metalworkers, furniture makers, butchers and journalists are also waiting for a new collective labor agreement, the wages of their relatives and friends have not risen as fast as last year in decades. According to statistics agency CBS, the average salary increased by 6.1 percent in 2023. Yet, due to inflation, working people were able to buy less than a year earlier. While trade unions focused on full inflation compensation in negotiations, employers did not consider it their duty to bear the full burden of the increased prices.
It led to heated discussions at negotiating tables and grumbling on the work floor. Nevertheless, the number of strike actions was not too bad, partly because the threat of a strike was often enough to reach a compromise. Employers' association AWVN warned at the end of December that companies' investments could come under pressure due to too much wage compensation. Money that goes to wage compensation, for example, cannot be invested in the growth of labor productivity. And according to employers, this can ultimately be at the expense of the economy.
The fact that no collective labor agreement has yet been reached in some sectors does not necessarily mean that employees received no inflation compensation at all. Some companies opted to pay out a one-off amount in the meantime. In the publishing industry, the two largest employers, DPG Media and NRC parent Mediahuis, have already implemented their own salary increases, pending a collective labor agreement.
Some housing associations have also increased wages, says FNV board member Zakaria Boufangacha, who coordinates the collective labor agreement negotiations.
Wage gap
Although it is nice for employees to receive extra money, such an increase outside the collective labor agreement is not desirable, says assistant professor Janna Besamusca. She conducts research into working conditions at Utrecht University. “For employees, it is simply the case that you can collectively negotiate higher wages. Moreover, a collective labor agreement offers a better legal position. And there is a political importance: the pay gap between men and women and between high and low paid workers is smaller in sectors with a collective labor agreement.”
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Declining membership numbers
Yet it is also understandable that employers would take such a step, says employment law researcher Niels Jansen of the University of Amsterdam. “More and more wage agreements are being made outside the collective labor agreement. Now only about 70 percent of all workers are covered by a collective agreement, which was once 85.”
Jansen suspects three causes. On the one hand, new sectors are emerging – for example ICT – with highly trained, scarce personnel, for which good individual employment conditions apply. Employment is also growing in sectors without collective labor agreements, such as consultancy. In addition, companies with relatively few union members see an opportunity to keep unions out. Jansen: “The declining membership numbers in trade unions mean that collective bargaining sometimes becomes collective begging. Employees will sometimes be happy that there is some extra pay at all.”
According to Jansen, in view of the declining level of organization, it is in the general interest that politicians keep it interesting for employers to conclude a collective labor agreement. This can be done by making collective labor agreements possible that deviate from legal provisions. He cites agreements on temporary contracts as an example. According to the law, these may be extended twice. In a collective labor agreement, parties can stipulate that this will be three times. “You used to have many deviation options, but now the Social-Economic Council recommends scrapping these types of deviations. This takes away all the collective labor agreement goodies for employers, which is very inconvenient.”
Peace in the workplace
Despite high inflation, few collective labor agreements were broken last year. Such an interim adjustment did occur in the cleaning sector and in nursing, care and home care. Employees received an additional 12 to 15 percent salary, sometimes in steps.
Besamusca points out the importance of peace in the workplace. To achieve this, you make long-term collective labor agreements. “That also has to do with preventing you from having an employment conflict again and again. Compensation is often retroactive.”
Boufangacha of the FNV also believes in principle that “an agreement is an agreement”. Nevertheless, a relatively large number of collective labor agreements were broken in the past year. To this end, the unions usually relied on a collective labor agreement clause that makes new negotiations possible in the event of exceptional socio-economic changes.
Although the recent wave of inflation seems to confirm the logic of these exceptions, there have not been more collective agreements with these types of clauses, says Boufangacha. “We have aimed for a shorter term, a maximum of twelve to sixteen months.” Then adjustments can be made more quickly. Employers have difficulty with these shorter terms, he knows. “But I think they also benefit from it. This way they can better anticipate economic developments.”
According to the FNV, 2023 was a record year in terms of the number of collective labor agreements concluded. Before 2024, Boufangacha expects the wage battle to subside somewhat. After all, inflation has dropped. In December it was only 1.2 percent. On the other hand, there are other developments, such as tightness on the labor market and increasing workload. “More attention and time will be devoted to these substantive points,” according to the FNV director. “And these are often even more difficult negotiations, because they are less concrete than wages.”
There is now movement among housing associations. Unions and employers will soon return to the negotiating table.
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