Dutch government steps up attack on unions

The government in the Netherlands has taken another step in its confrontation with the unions (see Labour Research August 2004, page 8). Last month it announced that from 1 November it would cease to make collective agreements, including wage increases, binding on companies that had not signed them.

The practice of making agreements signed by unions and the employers' associations generally binding across a whole industry has long been part of the Dutch system of industrial relations. The aim is to prevent companies not in the employers' association from undercutting pay and conditions elsewhere. The main union confederation, the FNV, estimates that 750,000 employees have had their pay protected in this way.

The government has decided to stop this practice until December 2005, arguing that the economy cannot afford any increase and that the action is necessary now the unions are no longer bound by a pay freeze negotiated in 2003.

The unions have responded angrily and plan to take the government to court.