Public services in the aftermath of the economic crisis: how social dialogue influences changes in public sector employment relations in the Netherlands

Peter LeisinkUlrike WeskeEva Knies

Introduction

• Focus of the research:– Impact of the economic crisis and related austerity

measures and of other developments on public sector employment relations

– Influence of the social dialogue on austerity measures and their consequences

• Locus of the research: central government, local government, primary education, hospital

• Method: desk research (documents, internet), interviews with employer and employee representatives at sectoral level, casestudies in 2 municipalities

Outline presentation

• Overview of austerity measures• What is the impact of the economic crisis and austerity

measures on public sector employment relations?• What is the role of central government?• What are the consequences of the austerity measures?• What is the role of the social dialogue?• Conclusion

Overview of austerity measures

• 3.2 billion Euro 2010 Balkenende cabinet: – 600 million public sector wage restraint– 310 million savings on childcare– 231 million efficiency cuts on government

• 18 billion Euro 2010 Rutte cabinet:– 1.5 billion cut back on central government– 870 million wage restraint collective sector– 500 million cuts on defence– 300 million cuts on education for children with special

needs• 12 billion Euro 2012 Rutte cabinet + other parties:

– 1.6 billion cuts including wage freeze for public sector employees (excluding healthcare)

Drivers

• Public sector reforms go back to the 1990s (NPM type reforms: privatization, decentralization, downsizing, better service)

• The economic and fiscal crisis have led to stepping up current efforts since 2009: more cut backs and reform programmes

• Demographic changes and related changes on the labour market

• Focus on individual sectors:- implementation of central government’s measures takes place at sectoral level, where local actors add their own agenda- the position of central government in influencing employment relations at sectoral level differs- sectors differ as regards the impact of demographic changes and their labour market situation

Role of central government (1)

• Government and parliament take decisions that interfere directly in public sector employment relationships (see overview of austerity measures)

• Differences between sectors in the degree of direct influence by central government– Central government: Minister of the Interior is also employer– Primary Education: Minister of Education determines wages

and primary employment conditions– Hospitals: employers and unions are relatively autonomous– Local government: employers and unions are formally

autonomous; but in practice there is indirect interference from central government

Role of central government (2)

Central government

Primaryeducation

Localgovernment

Hospitals

Very strong central government influence

Very weak central government

influence

Consequences of austerity measuresMix of structural and quantitative measures• Quantitative measures: wage restraint/freeze; employment cuts• Rutte cabinet formulated cutback targets in terms of financial

targets: x billion Euro instead of number of jobs (as was previously done). Yet, job reductions are the main way of achieving these targets: at least 26.000 jobs until 2015 (amounting to almost 10 per cent of total government jobs)

• Structural measures regarding employment relations driven by austerity measures and demographic changes:– Fundamental change in traditional notion of employment

security• Local government agreement: “from job to job”• Central government: new social plan: abolishment of LIFO-principle

(which in practice guaranteed employment security for older workers); introduction of “from job to job” plan

– Measures supporting employees’ employability• Personal training budget (local goverment)• Personal lifestage budget (hospitals)

Role of social dialogue

• Influence of social dialogue on austerity measures and their consequnces differs between sectors

• Unions comply with the principle of political primacy and concentrate on the consequences of measures and fair treatment of employees

• Industrial relations actors do not perceive efforts to marginalize the social dialogue, for instance by bypassing collective agreements or social actors

• Industrial relations actors regard the current situation as ‘normal’ employment relationships

• The tension between the trend towards increasing flexibility and the preference of employee representatives for regulations that provide rights and certainties is important for the position of unions in the future

Conclusion

• * The economic and fiscal crisis adds to existing reform programmes; in addition, demographic changes and labour market prospects impact on employment relations

• * Social dialogue institutions continue to play their role ‘as normal’

• * Government’s austerity measures impact on wages and employment

• * Sectors differ in the degree to which central government can determine employment relationships and can interfere

• * Social dialogue at sectoral level generates ‘innovative’ agreements that replace traditional employment security with employability arrangements (from job to job support; career and lifestage budgets)