End of zero hours contract and increase in minimum wage

Trade unions and employers agreed on June 1 on labor market reform. In a new opinion of the Social and Economic Council (SER), they argue, among other things, for the abolition of zero-hours contracts and should work via a temporary contract for a maximum of only three years. The legal minimum wage should also be increased while maintaining the link to benefits.

According to the social partners, the interventions are necessary because of increasing inequality and social discontent in the Netherlands. In the SER opinion, they therefore urge to the fact that a new administration is going to invest heavily in some they call "broad prosperity. That means job and income security, future earning power, strong public services and a sustainable living environment.

If it is up to unions and employers, there will be soon to be three types of workers, people on permanent contracts, temporary workers and self-employed workers. Zero hour contracts and constructions such as payrolling disappear altogether. Temporary work will be limited to replacing sick employees and during busy periods when additional staff is needed. Moreover, it will be limited to a maximum of three years. After that, a person must be given a permanent contract. Now that term is 5.5 years. Under the current system, a temporary worker may be fired overnight within 1.5 years. That term will be shortened to 12 months.

'Prosperous and happy'

The SER says that on average, the Netherlands is a prosperous and happy country, but that there are tensions in society due to increasing inequality of opportunity and many people experience less grip on their future and living environment. According to the SER, the Netherlands needs to recover from the corona crisis, which has also highlighted both the importance and vulnerability of vital sectors. At the same time, the Netherlands is on the eve of a number of major changes such as the energy transition, the introduction of new technologies, digitalization and an aging population. "These fundamental changes will demand a lot from our ability to adapt," the SER said.

Ingrid Thijssen and Jacco Vonhof, chairmen of employers' organizations VNO-NCW and MKB Nederland, had recently indicated that they wanted to reach an agreement on the labor market. Actually, the SER, in which employers and employees are represented, was supposed to discuss this at the end of last year with a opinion to come. However, the SER's response was postponed due to corona, and the now outgoing cabinet was also put off by the epidemic no longer to.

The polder consultation was prompted by the report of the Brestlap Commission, which contained a large number of recommendations to straighten out the skewed labor market, including more security for flex workers. The new cabinet must ultimately make decisions about the position of employees and the self-employed.

The SER further recommends improving education and, for example, child care and believes that greater investment is needed in knowledge and innovation, digitization and new technologies, infrastructure and sustainability. According to the council, investments are also necessary for a well-functioning and accessible public sector. Also, government support remains necessary to restore the economy, while this recovery is still fragile. In doing so, care is needed in the winding down support measures. Tax increases and cuts are unwise, and good timing and customization are crucial, according to the SER.