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New redundancy law will boost mobility and productivity: minister

Tuesday 19 June 2012

Plans to reform redundancy law, by making it cheaper to fire older workers and cut out the involvement of the courts, will boost labour productivity and improve worker mobility, social affairs minister Henk Kamp has told MPs.

The cabinet on Monday agreed to back the reforms agreed by the five-party coalition at the beginning of May as part of a package of austerity measures.

If they become law, the reforms would allow companies to sack staff without official permission and workers will then have to go to court to fight their dismissal. Currently, companies have to apply either to the district courts or to the UWV state benefit agency for permission to sack staff with a permanent contract.

Golden handshakes

The plans also include a sharp reduction in compensation payments, which will be fixed at a quarter of a month's salary per year, to a maximum of six months. In addition, this money will have to be used for retraining and finding new work.

These measures will make it easier for older workers to move jobs, because they will no longer hang on for a large golden handshake, Kamp said.

But unions point out this measure will make it much cheaper for companies to sack older workers, who are currently entitled to more generous financial packages.

In addition, only workers who have money will be prepared to fight their dismissal in court, the CNV union federation said.

Productivity

Employers welcome the changes, saying smaller firms in particular will be spared the hefty costs currently associated with redundancy.

Kamp says the reforms will boost labour productivity by 0.4 percentage point, or €2.5bn a year. He hopes parliament will debate the plans before the summer recess, which will also be submitted to the SER advisory council for its recommendations.

However, it is unlikely legislation will be submitted to parliament before the general election, meaning the make-up of the next parliament will be crucial for the success of the reforms.

© DutchNews.nl



 

Readers' Comments

This is a very progressive move by the Dutch government. As an employer I will feel more inclined to hire more employees when my business picks up. In the current climate, I avoid hiring because it may cost the firm too much. This practice is consistent with the USA, Australia and much of Asia.

By kalajutu | 19 June 2012 10:16 AM

How is this going to increase productivity? By making people afraid of losing their jobs? Great way to incentivize your employees!

Why is consumer spending down? Oh yes, because people are afraid of losing their jobs! Not to mention the fact that value-added tax (among others) is set to increase and pension fonds are unreliable.

So if the Government has just made it easier to fire employees, how is this going to boost productivity?

By Bob | 19 June 2012 10:39 AM

The proletariats will be jumping with joy at this news. It's a smart move in an economy that is growing and creates enough new jobs and training to allow the upward mobility. No one wants to take a step down in their careers. Would I really give up a golden handshake just to move to another job on worse T&C's and pension?. No I would wait, collect the money and then go collect some Uitkering for as long as possible. Does that make me Dutch?

By Dr Ponzi | 19 June 2012 10:49 AM

'making it cheaper to fire older workers'

Unbelievable. Perhaps they should offer a choice between redundancy or euthanasia, as we older workers obviously have no wealth of experience to pass on, and will just burden them all with our onset of dementia and reduced mobility (once we hit ... 35? 40?)

How many government plans did they introduce, then scratch their heads and say 'hmm, that didn't really go as planned'. Ziekenfonds? Smoking ban?

Please stop wasting tax money on phoney statistics, as your researchers couldn't research their way homes without someone older to hold their hand....

By osita | 19 June 2012 11:15 AM

At first I thought this was a good initiative, but then: 'the reforms would allow companies to sack staff without official permission and workers will then have to go to court to fight their dismissal' - this will save money and make things better? I think it will simply slide the problem over to the courts to fight it out.
'These measures will make it easier for older workers to move jobs, because they will no longer hang on for a large golden handshake, Kamp said' - a more ridiculous statement is not even possible, please! Older workers cannot 'move jobs' - no one wants to hire them. The current system gives us some protection at least.

By Bill | 19 June 2012 1:39 PM

Lets hope & prey that the conservatives don't win power, laws like this may increase productivity but they decrease living standards. The world needs to be working towards a sensible level of productivity, not trying to sink to China's standards!

By Phil | 19 June 2012 1:55 PM

This is a shame and off course the companies will use this law against the employees not for boost labour productivity and improve worker mobility but for their own benefits. Soon The Netherlands will become like US where there will be no work security , the companies will do everything they want and it is only about profit not about the employees. SHAME SHAME SHAME.

By Saul | 19 June 2012 2:02 PM

And so the march towards "at-will" contracts as is standard in the USA begins. I hope you all enjoyed your job security while you had it.

By Jamie Martin | 19 June 2012 2:35 PM

Very funny. I would have thought it would boost redundancy and so unemployment. Trust the Yesmen.

By Philippe | 19 June 2012 2:39 PM

and thus starts the return to indentured servitude...

By H. | 19 June 2012 2:39 PM

This is a radical change to the law, that will heave long-last negative effects on the people of this country. Why is this being passed during this lame duck fallen government? How in God's name did two left-wing parties go along with this neoliberal garbage? And, finally, why in the hell aren't people out in the streets protesting this law? Where is the outrage? I see nothing about this on the TV News here.

By Kevin | 19 June 2012 9:37 PM

China, Phil? Look no further than the US. Yes, one of the "good" countries in your eyes.

By CW | 21 June 2012 2:46 PM

"Plans to reform redundancy law, by making it cheaper to fire older workers and cut out the involvement of the courts, will boost labour productivity and improve worker mobility, social affairs minister Henk Kamp has told MPs".
Sure. Just like not setting dentist fees would improve service and decrease fees, according to Schippers. And we've all read (and experienced) how that went.

By Alice | 26 June 2012 9:37 AM

 
 
 
 
 
 
 
 
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