Dutch employers want to temporarily lower salaries in times of crisis

Three prominent employers’ organisations in the Netherlands have put together a “crisis clause” proposal, which would provide employers with the power to temporarily lower the salaries of their employees during times of crisis. 

Crisis clause: Giving Dutch employers more control over outgoing costs

The ongoing coronavirus pandemic has revealed the wide-reaching and long-term implications of (global) crises, and as companies, industries and families across the globe struggle to find a way to move forward - both during and after the pandemic is over - some are coming up with controversial solutions for future problems. 

AWVN, MKB Nederland, and VNO-NCW - three prominent employers’ organisations in the Netherlands - argue that the severity of the situation isn’t yet clear, due to the financial support that has been provided by the Dutch government since last spring. But when this support comes to an end, they say, companies will have to find ways to cut costs, in order to stay afloat. 

The employers’ organisations highlight the unprecedented and uncertain circumstances that have been brought about by COVID-19, resulting in companies looking for any and every way out of the crisis. One solution they propose involves providing employers with more control over their outgoing costs in uncertain times.

Employees unions critical of crisis clause plan

With this crisis clause, companies who see their profits fall dramatically from one year to the next - for example by 20 percent - could implement more austere working conditions and temporarily cut the salaries of their employees. But this clause would work both ways: when times are tough, everyone working at the company will suffer the loses; but when business is good, all workers should enjoy (considerably) higher wages. 

Alongside the crisis clause, the organisations also propose a number of other potential solutions. For example, more flexibility in relocating employees working on permanent contracts to different positions or locations in order to keep them in employment, or saving costs by rewarding overtime with a compensation (holi)day. 

The Christian National Trade Union (CNV) and the Netherlands Trade Union Confederation (FNV) have both criticised the plan. CNV chairman Piet Fortuin acknowledges that some options need to be available to employers who are struggling, but says this clause would only deprive millions of workers of their job and financial security. The FNV agrees: “Our starting point is more job security and, where possible, good wage increases... Employers should not make the same mistake as after the previous crisis, when the growth of precarious work increased and wage growth lagged for years,” employment conditions coordinator Zakaria Boufangacha told RTLNieuws.