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Flexicurity practises in the time of economic crisis the Netherland

Flexicurity practises in the time of economic crisis the Netherland. Evert Verhulp University of Amsterdam www.jur.uva.nl/hsiuk. pratices. -Part time unemployement benefits -More consecutive fixed term contracts for younger employees (>27 years) Minor changes in dismissal decree…

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Flexicurity practises in the time of economic crisis the Netherland

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  1. Flexicurity practises in the time of economic crisis the Netherland Evert Verhulp University of Amsterdam www.jur.uva.nl/hsiuk

  2. pratices • -Part time unemployement benefits • -More consecutive fixed term contracts for younger employees (>27 years) • Minor changes in dismissal decree… • Some ALMP (financial support for job seekers centra)

  3. Part time Unemployment benefit scheme • Due to the crisis the orders and therefore the workload dropped. This would give employers an incentive to dismiss employees. The part time UB allowed employers to identify the employees whose work is affected by the crisis and offer them the possibility to be not dismissed, but apply for a part time UB, for max 50% of the working time and at first for max six months. The decree has been extended several times, and has been used quite extensive. This system should prevent employers from dismissal of employees. Until now there has been no research that’s proofs this, but about 40.000 employees used the pt UB, and it is considered to be successful.

  4. flexicurity • a policy strategy to enhance, at the same time and in a deliberate way, the flexibility of labour markets, work organisations and labour relations on the one hand, and security –employment security and income security – on the other. • Is adopted by EC with the greenpaper on modernisation of the labour markets…

  5. Fixed term • very recently the law of fixed term contracts has temporarily (for 2 years) been changed to allow for younge employees (up to 27 years) an extension of fixed term contracts. According to Dutch law after three consecutive fixed term contracts, the forth will be legally and automatically be permanent. This system is altered when a younger worker is involved: the employee and employer are allowed to conclude a forth fixed term contract which will not be considered a permanent contract.

  6. Not flexicurity is • Active Labour Market Policy • Empowerment of unemployed etc • (so the Finland case (TE), and most Portugese exemples arenot a flexicurity strategy, because there is no enhancement of flexibility)

  7. Wilthagen/Tros matrix

  8. Polder model/ social pacts • Complicated system of negotiations between employers and employees: • Two institutional bodies: • SER Social economic council • STAR Labour foundation • Position of government: wage policy and labour market

  9. Dutch labour market 2010 • Labour force: 8,2 million • Civil servants 1 mil • Self employed 800.000 • Employees 6 mil • Part time: about 40% • Fixed term/taw 600.000 • Unemployed 500.000 = about 6%

  10. Unemployment in the Netherlands

  11. Dismissal law • ‘Dual system’ • 1) About 50% of all dismissals • (By decret): permission to terminate is needed, sometimes it is prohobited to terminate • Term of notice • Unfair dismissal (some times compensation) • 2) The other 50% • Termination by court (always compensation) this involves a lot of money…

  12. Employment protection level

  13. Permanent contract is “normal” • There is a tendency to ‘load’ more and more obligations into the permanent employment contract (on the employer) • i.E : • Reintegration disabled/ill employees • Training • Pensions etc

  14. Employer's statutory duty to continue paying an ill employee's salary

  15. Flexibility and Security act • Proposal by minister of Soc. affairs (1996), aimed at inclusion on labour market of : • -temp agency worker (about 250.000 workers) • -fixed term contracts (about 400.000 workers) • -workers with uncertain position ( ? ) • Polder model: consultation STAR • Agreement in STAR 1997

  16. F & S • Alteration of Civil Code: • On the security site: Implementation of: • Legal presumptions: • -employment contract • -on working hours of contract • Fixed term: max 3 contracts or max periode 36 months (increases flex as well)

  17. F &S • TAW = employee, lot of mandatory law (also increases flex • Flex side on EPL • Shortening of term of notice and of procedure to get permission • but does it work? (do we have a better balance between employees on a permanent / fixed term contract?)

  18. Piet Dingemans • Knows about six years that he will become redundent, but “you do not give up your employement protection for nothing..”

  19. Important: mobility on labour market • - Good match • Participation (compare third way) • Dynamic labour market improves employement • Quality and quantity • Dutch dismissal law stimulates people to sit and wait…..

  20. For Dutch dismissal law • If the dismissal law is changed: • Implement some kind of employability check: • Severance payment should not be the protection against dismissal, but should be a real compensation or compensate unfair dismissals…

  21. Austrian exemple • Some kind of saving system *Abfertigung Neu* • No flex strategy and no solution…

  22. New flexicurity strategy • employement security replaces EPL (Job security) • Employment security replaces income security • Income sec (damages) can be used to prevent unemployment

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