Trade unions try another tactic
When Mao Ze Dong
‘great leap forward',
he probably had in
mind equal rights
and duties for all the hundreds of
millions of Chinese, based on solidarity.
The Cultural Revolution that
followed turned out to be a disaster
which cost millions of Chinese their
lives and destroyed the intellectual
assets of a whole generation. Fortunately
things have improved in
China nowadays, although there
still much room for improvement.
Looking at the Dutch pension system,
the trade unions have realised
that their position in society has
weakened during the last decade,
and to maintain their position as a
‘social partner' they are preparing
their own great leap forward. For the
good of the unique but vulnerable
Dutch pension system it is essential
that they succeed. Even employers
can benefit from the unions' success,
perhaps setting an example for
the rest of Europe.
The pension system in the
Netherlands consists of three pillars,
the so-called ‘Cappuccinomodel'.
The state pension (AOW)
is the basis for all Dutch inhabitants
from the age of 65. Pension
payment is equal for everyone and
is financed through tax (pay-asyou-
go). It is the coffee in the cappuccino.
The second pillar is made up of the
additional pension schemes operated
by more than 800 pension
funds and financed by funding, currently
totalling more than €600bn.
Participation is compulsory and
therefore applies to almost all
employees, providing them with an
additional pension based on their
personal careers and salaries.
The second pillar is the responsibility
of social partners - the organisations
of employers and employees.
Second pillar pensions are based on
solidarity and are executed in collective
schemes, which have proved to
be the most efficient and cost-effective
method. It the cream in the cappuccino
The third pillar is purely individual,
and intended for those, for
example, who have not save enough
in the second pillar. This is the
domain of the insurance companies.
Individual pension products are the
cocoa on top of the cream in the
cappuccino. The Dutch three pillar
system is unique in Europe and
the rest of the world. It depends
on the specific role of social partners.
What makes it unique is the
tradition of constructive negotiation
between employers and
employees, the so-called ‘polder
The minister of social affairs is
responsible for pensions but has delegated
the establishment and operation
of pension schemes to the
social partners, provided they can
prove that they represent their sector,
branch or company. They can
then make the participation in the
scheme compulsory. It is this compulsory
participation that is the
backbone of the Dutch system.
Trade unions traditionally play
an important role in establishing
collective arrangements for workers
and have been quite successful
in that role. Almost all industries,
sectors and bigger companies
nowadays have a collective labour
agreement, the so-called CAO, in
which all details about the terms
of employment from wages to
education, are set out. All
employees benefit from this agreement,
whether or not they are
Another achievement has been the
collective second pillar pension
schemes, which are on average of
high quality. Most employees do
not realise that these schemes are
the result of negotiations between
the social partners.
With the typically Dutch approach
of constructive dialogue, which usually
leads to a positive outcome, and
without a tradition of continual
conflict and repeated strikes, it is
understandable that a growing
number of employees do not feel
they need to join a union. These socalled
‘free riders' nevertheless benefit
from collective agreements.
The growing trend of individualisation
in society, a logical effect of
prosperity, is also a factor. Increasingly,
people feel they can look after
themselves and no longer need collective
strength and provisions. For
younger generations in particular,
the word ‘solidarity' is associated
with the past.
The young are looking for value for
money and behave like demanding
clients. They do not feel any obligation
to strengthen the position of
trade unions, any more than they
expect any individual benefit from
the unions. They may even suspect
that the unions operate only on
behalf of older generations.
This suspicion was fuelled by the
social agreement 2004 which
ruled that that pre-pension
arrangements, which were to be
repealed, were secured for people
aged 55 and over. The young considered
this one-sided solidarity.
For the young, unions are associated
with past generations, problems,
strikes and rearguard actions.
Recent research found that over
50% of all employees are dissatisfied
to some extent with their present
jobs, although only 14% are
actively search for another job.
Considering the current perception
of trade unions it is unlikely
that they will ask them for help as
the perceived guardians of their
present jobs. But this situation is
about to change.
ABVAKABO FNV, the trade union
representing members in civil and
public service and the healthcare
and welfare sector and the second
largest union in the Netherlands,
has realised that a drastic change in
strategy is essential if it is to maintain
a strong and significant position
ABVAKABO FNV has more than
350,000 members, and is a member
of FNV, the confederation of some
20 Dutch unions. It holds leading
positions on the boards of trustees of
ABP and PGGM, the two largest
Dutch pension funds. More than
anyone else they are aware that the
unique balance of power and influence
between social partners
requires at least equal and strong
It is essential, therefore that unions
succeed in reversing the loss of
membership most of them are experiencing.
Current membership as a
proportion of potential members is
now on average, between 20% and
With the current image of Dutch
unions that will not be an easy task.
However, the board of ABVAKABO
FNV is determined to succeed. There
is much at stake. A large number of
their members will retire within 10
years and with an unchanged policy
they will not be replaced by younger
The new strategy, which is now in
its final stage of construction, has a
strong focus on making a renewed
contact with the younger generations.
Effectively, ABVAKABO FNV
has to re-introduce itself. The opportunities
are within reach, but it will
not be easy. There are few things
more difficult than changing an
The FNV and some sister unions
within the confederation are showing
considerable interest in this
development, and the need for
change extends beyond ABVAKABO
FNV. FNV covers all sectors
and branches across society.
The first combined communication
initiative has already been
introduced, offering assistance to
workers looking for a change. The
initiative is an interactive internet
programme called GoNoGo
(www.gonogo.nl ), which encourages
people to find out whether
they are content with their present
position or whether they would
find another job more interesting.
By answering a battery of questions
online they get an instant advice: go
or no go. In every case, people are
directed towards organisations that
can help them to improve their
position. This includes the FNV,
one of the sponsors of the programme.
The initiative helps FNV position
itself in an area of opportunities.
These are only the first steps
towards a stronger position for the
FNV unions in the Netherlands.
Their challenge is to convince
younger workers in particular that
they can find individual added
value in a union. Membership of a
strong union, for example, ensure
that they belong to a solid pension
The new strategy forces unions
to have an outside-in focus, looking
through the eyes of their ‘customers'.
One interesting side
effect is that it stimulates cooperation
between the various unions
within the FNV confederation.
They can learn from each others
experiences and it is cost-efficient.
The first steps are promising. Other
Dutch unions like CNV also face
lower membership rates and difficulty
to reach younger generations.
They, too, are thinking about
changes in strategy.
The pension world will benefit
from the ‘great leap forward' of the
unions, at least if they succeed. The
result will be a long-lasting foundation
for the unique Dutch pension
system. As long as the social partners
continue to build and
improve good pension schemes,
either DB or collective DC, the
minister of social affairs will continue
to give approval for compulsory
The future survival of the Dutch
unions could set a good example for
the rest of Europe. In that case it
could become a new and promising
export of that small ‘polder country'
behind the dikes.
Alfred Kool is managing partner
Kool Corporate Communication,
and former communication