Dutch postal workers to get bonus if they cut sickness absence rates

Last month TPG, the Dutch post office and largest private sector employer in the Netherlands agreed a 2.5% pay increase for its 68,000 employees.

The increase is in line with the guidelines agreed by employers and the main union confederations - FNV and CNV - at the end of last year. However, employees can get additional payments, equivalent to 0.5% of pay, if they succeed in cutting sickness.

The agreement runs for a year from May 2003 to April 2004 and, after a month without an increase, pay is increased by 2.0% in June 2003 and by a further 0.5% in February 2004. Inflation is currently 2.3% (May).

Employees will get an extra €64 in November this year if the sickness absence rate has fallen to 5.1% by September and another €64 in March 2004 if it has fallen to 5.0% by December 2003. Together these are equivalent on average to 0.5% of annual salary.

The main union involved - ABVAKABO - has also been able to maintain current pension levels without requiring employees to make a direct contribution to the funding, an unusual situation in the Netherlands, where most pension funds rely on both employer and employee contributions. However, it has only been able to do this through accepting worse arrangements for an employee savings scheme. Pension funds in the Netherlands are under pressure because of the fall in stock markets.