Protecting low wage workers

MAKING INDUSTRIAL RELATIONS WORK FOR DECENT WORKBRIEFING ON THE SITUATION IN THE NETHERLANDS 46

02

Introduction The working poor

At first sight public debate in Holland would have you believe that in the Netherlands,only those who do not work are poor. However, a recent report by the NetherlandsInstitute for Social Research (SCP) seemed to prove quite the opposite. In 2009 morethan half a million people lived in households run by the ‘working poor’. Despiteemployment being the family’s primary source of income in the past year, they earnless than the minimum needed to meet what the institute calls “all necessary and highlydesirable expenses” (€930 for a one-person household; €1,750 for a two-parent familywith two children in 2009). Secondly, the institute reported that over half of the 7-8 percent of the Dutch population that is poor, do effectively work in the formal economy1. Thecombination of work and poverty, the institute thus concludes, is a very realphenomenon in the Netherlands.

Most working poor in the Netherlands are either self-employed or employed in lowwage sectors, such as for example agriculture, cleaning, temporary agency work and(some branches of) care. Women are more likely to work and live in poverty than men,especially when they run single parent households. Lowly educated people are morelikely to have low wages than the highly educated, the young more than older persons,workers from an immigrant background more so than natives. Most characteristic of theNetherlands is the difference between flexible and permanent workers, part-timersand full time employees2. After all, even if your hourly wage isn’t very low, insecuritycontinues to exist when you might not have work next month, or when you can only work20 hours.

In some low paid sectors, like domestic care and cleaning, it has become almostimpossible to work full time in a single job. Work is organised around morning andevening shifts (when office buildings and restaurants are empty or patients need to bedressed and undressed). Furthermore, continuity of work depends on the employer’scontracts with client companies being renewed through tenders and contractingprocesses in which service providers compete for the lowest price. To minimise losseswhen losing tenders, companies prefer to hire flexible workers they do not have to retainin periods when there is no work.

Trade unions, politicians and employers alike have recognised the pressure to reducecosts and its adverse effects on wages and working conditions. However, thecomplicated nature of labour relations (between employer, client company andemployee) makes it difficult to pinpoint who is responsible. This report will highlightthe proceedings in two branches that are heavily affected by the trend toward cost-reduction: cleaning and domestic care.

1 “Armoedesignalement 2010”. (2010). DenHaag: SCP.

2 Salverda, M. Laagbetaald werk,deeltijdwerk en loonmobiliteit. In: CBS(2011). “Dynamiek op de Nederlandsearbeidsmarkt. De focus op kwetsbaregroepen”. Den Haag/Heerlen.

“Trade unions report thatcleaners, who complain that thescheduled time simply does notallow them to clean the room,are told to “clean only where it’sdirty”5. In 2011, cleaners in onehospital mounted successfulactions against cut backs thatleft them with only 6.5 minutesto clean a room with en-suitefacilities.”

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Overview The cleaning and domestic care sectors

The cleaning sector

The cleaning sector is a relatively young industry that has grown strongly in the lastdecades, as businesses started to save costs by contracting outside companies to cleantheir properties. In 2011, around 85 per cent of declared cleaning work in theNetherlands was performed by cleaning companies, who employed around 150,000people and had an annual turnover of roughly 4.3 billion euros. Traditionally, theunionisation of the sector has been low. The biggest trade union in the sector is FNVBondgenoten, which had 14,000 members. The Ondernemersorganisatie Schoonmaak-en Bedrijfsdiensten (OSB) organises 650 employers in the sector, representing around80 per cent of the sector’s total turnover.

About two thirds of employees in the cleaning sector are women, almost half (46 percent) are first or second generation immigrants, 54 per cent are between 35 and 54 yearsof age and two thirds of employees have attained at most a diploma from the lowest high-school level (preparatory vocational education, VMBO). Only 43 per cent of employeeswork 24 hours or more per week.3 In 2011, the hourly wage for cleaners in their first year(the “learning year”) was 103 per cent (€9) of the minimum wage, 118 per cent (€10.28)for those who’d completed the initial training and up to 121 per cent (€10.59) for those whohad been cleaning for more than seven years. Trade unions estimate, however, that in2011 only 8 per cent of the new employees actually took part in the basic training forcleaners exam4. Most employees work on flexible, short-term contracts.

The sector has always been characterised by low levels of pay but in recent yearscleaners have reported that their workload has increased while pay has remained thesame. Employers point at the cut-throat-competition in the industry and have statedthat the market does not allow them to pay higher wages or hire more people on a job.Cleaning companies are dependent for their work on winning procurement and publictendering procedures, which often secure contracts for no more than two years, only tothen enter another procurement procedure. In many cases, the client even hires anintermediary company (broker) that negotiates the terms of the procurement andcleaning companies recruit large shares of their staff via temp agencies to keepmaximum flexibility.

In the competition for contracts, cleaning companies attempt to offer the cheapestpackage. Because virtually all of them already pay the lowest wage allowed under thecollective agreement, the time allowed for each activity has been cut down instead,increasing work stress. Trade unions report that cleaners, who complain that thescheduled time simply does not allow them to clean the room, are told to “clean onlywhere it’s dirty”5. In 2011, cleaners in one hospital mounted successful actions againstcut backs that left them with only 6.5 minutes to clean a room with en-suite facilities.

Domestic care sector

The domestic care sector traditionally employs a lot of women from so-called one-and-a-half earner households: families with children where one parent (most often the man)works full time and the other part time. In the big cities, though, an increasing numberof domestic care employees are single mums. Many employers in the sector are socialservices and community building organisations, who operate under comprehensive

3 http://www.osb.nl/schoonmaaksector/

4 FNV Bondgenoten. “Let’s Get Real!”http://dl.dropbox.com/u/53605257/lets percent2520get percent2520real_definitiefste_lores.pdf

5 FNV Bondgenoten. “Let’s Get Real”.

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visions of societal cohesion, including decent work. Their patients receive help rangingfrom cleaning the house to complex wound care, mainly through publicly fundedschemes. The core of the patients are elderly or people with chronic physical or mentallimitations, however, people recovering from accidents or operations can also apply forthe domestic care schemes for the brief period of time they have need of them.

The most basic help in the household (level 1 domestic carers, “huishoudelijke hulpen”in Dutch) is done by workers who have often not completed more than primary orsecondary education. The employees walk regularly changing routes on which they visitthe different houses to clean. Any other tasks outside cleaning, such as checkingwhether mail is still opened regularly, are performed by colleagues in higher job levels.Job grades are relatively flat and most organisations are moving towards morehorizontal forms of organisation, in which management layers are kept to a minimumthrough increasing automation of the scheduling.

Most of the employees work part time, which corresponds to the daily rhythms of thepeople receiving the care. As a result, many employees work two jobs in order to reachacceptable monthly income levels. Employers discourage the choice but are unable tooffer better hours due to the lack of work during large parts of the day and Europeanlegislation regulating the minimum hours between shifts in order for them to beconsidered separate working periods.

The domestic care sector used to be a fairly integrated sector in which clients moved upfrom limited help in the household to more intensive assistance as their need of careincreased. A legal change, however, split the care work between assistance intended tofacilitate people’s independent lifestyles as long as possible (aid in the household,changes to make homes wheelchair friendly, transport, etc.) and another part focusedon more medical assistance (washing, wound care, assisted living, home care, etc.). Theformer part of the work is allocated through public tendering procedures, in whichmunicipalities publish calls that care organisations can apply to with projects anddetailed budgets. In addition to the new uncertainty about continuity of work, budgetsmade available by the municipalities during the financial crisis were rarely sufficient tomaintain former salary levels and working conditions.

Initially, most organisations in the sector opted for strategies to deliver care forsubsidies under the cost level, counting on increased incomes from clients flowing intothe more intensive care trajectories that would still be profitable. The big lossesincurred by some organisations that won the tenders have resulted in a number ofbankruptcies and caused others to withdraw from this part of the market preventivelyor to create separate holdings for the domestic cleaning services in order to limit theimpact of bankruptcies on the organisation as a whole. New employers with abackground in the cleaning rather than care sector have entered the market, drivingprices down further. The resulting split in the work force, some of whom now workunder the collective agreement of the cleaning sector, has divided trade unions.

While the effects of public tendering in the care sector are not dissimilar to those ofprocurements in the cleaning industry, the domestic care sector lacks the level oforganisation of the cleaners and neither unions nor employers have managed to takean effective common stance against low-cost tendering. The only collective resistancehas come from the municipalities themselves, who have mounted protests againstfurther government cut backs on their budgets. Surprisingly therefore, the much lessantagonistic relations between care workers, employers and municipalities have yieldedfewer results than the open conflicts in the cleaning sector.

“Most of the employees workpart time, which corresponds to the daily rhythms of thepeople receiving the care. As a result, many employeeswork two jobs in order to reachacceptable monthly incomelevels. Employers discouragethe choice but are unable tooffer better hours due to thelack of work during large partsof the day and Europeanlegislation regulating theminimum hours between shifts in order for them to beconsidered separate workingperiods.”

05

The legal and industrial relations framework

In the Netherlands, sector-wide collective agreements are declared nationally bindingand therefore official coverage is virtually universal. Large differences exist, however,between sectors as well as in compliance. The cleaning industry has its own collectiveagreement, whereas domestic care falls under the collective agreement for nursinghomes, care homes and domestic care. While the cleaning collective agreement isclosed between only employer organisations and trade unions, in the care sector therepresentation of employees encompasses both unions and professional associations.The clients (companies that contract out their cleaning work and municipalities thatinvite tenders for care work) are not partners in the negotiations of either sector.

Both the cleaning and care collective agreements are sober covenants with the lowestwage scales hovering just above the minimum wage. At the time of writing this report,the cleaners have started a nationwide strike rejecting the modest wage increaseproposed by employers, who in turn condemn union demands as unrealistic anddestructive to employment in the sector. It is the second strike by cleaning employees,after the first strike in 2010 that lasted nine weeks and was the longest since the railwaypersonnel strikes in 1933.

Using an American-based model of organising, the trade union movement managed tomobilise a highly activist group of previously out-of-reach cleaners in a campaign calledSchoonGenoeg (a wordplay, meaning both “clean enough’ as well as ‘fed up’) thattargeted client companies as well as employers. The cleaners protested against thelack of wage increases, decreasing personnel numbers for a constant workload, lack ofproper facilities like toilets and canteens for the cleaners, the lack of respect, andintimidation on the work floor. Above all, however, they objected to the industry logicwherein employers blamed clients for poor working conditions, arguing clientcompanies were unwilling to pay prices that would allow for higher wages and betterconditions; while client companies denied all responsibility, stating the cleaners are notemployed by them.

The result was a new collective agreement as well as the establishment of aCommission for responsible market behaviour, in which both cleaning and clientcompanies committed themselves to more sustainable market relations. The membersof the commission subscribe to a code in which they pledge to avoid a race to the bottomand engage in procurements that are based on price, quality and decent workingconditions, rather than solely on price. Client companies promise to provide sufficientfacilities, respectful relations and a realistic view of the time and money needed to dothe job; cleaning companies commit to a respectful treatment of their employees, thetraining of all employees in the first year for health and safety standards, to reduce theworkload per employee and to not offer their services for bottom prices; employeespromise to work hard and effectively; brokers commit themselves to transparentprocurement procedures and to take quality and working conditions into account whenassessing the offers from cleaning companies. The commission monitorsimplementation of the code by its subscribers and aims to convince more companies toadhere to it.

Despite numerous violations of the code and corresponding union actions, theestablishment of the Commission for responsible market behaviour has put theresponsibilities of client companies on the agenda and the actions resulted in muchgreater social awareness of the plight of previously invisible cleaning staff.

“Both the cleaning and carecollective agreements are sober covenants with the lowest wage scales hoveringjust above the minimum wage”

PHOTO: © UGT

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In 2012, after stalled negotiations over the new collective agreement, the cleaners areon strike again. In addition to the wage demand, the cleaners ask, amongst other things,for the deletion of the “two waiting days” rule, which states that employees that who areill will only be paid sick leave starting the third day of their absence. Trade unions alsodemand the removal of the “learning year” (in which employees are paid 85 per cent ofthe regular wage in exchange for training on health and safety standards) from thecollective agreement, claiming that employers have not complied with the trainingrequirement in the last few years and were using the measure, instead, to keep downexpenses.

In the care sector, both employers and employee representatives are more divided.Additionally, the care work is divided as different parts fall under two separate laws andcorresponding procedures. The exceptional medical expenses act (AWBZ) covers thecare of people that because of chronic mental or physical disabilities require long termmedical assistance that would be unaffordable for an individual and is not covered byinsurance packages. It includes, for example, residence in care homes, assistance withdressing, wound care, assisted living schemes and so on. Another law, the socialsupport act (WMO) offers mostly non-medical assistance meant to facilitate patients’participation in society, such as cleaning the house, adjustments for wheelchairaccessibility, social care and transport for disabled.

The collective agreement for nursing homes, care homes and domestic caremakes a note of the difficulties entailed in the operation of a sector that is split in twoby legislators and problems springing from the public tendering of the market sharegoverned by the social support act. Many of the employers continue to offer both socialand personal or medical services at home. New parties, however, specialising in socialcare only, have won a number of public tenders and begun to enter the market. Theformer universally operate under the collective agreement for nursing homes, carehomes and domestic care but some of the latter adhere to the collective agreement forthe cleaning sector, which has worse arrangements for nightshifts and weekend work.

Although wage scales are relatively flat, the sector does allow for more careerdevelopment; that is, when the employer in question offers not only cleaning servicesbut also delivers medical and personal domestic care. Unskilled cleaning aides can betrained for higher level care tasks, which primarily are helping people dress andundress, shower, and so on. In an effort to raise quality standards, the government hasmade funds available to train the lowest skilled employees for higher job grades in thosenon-hospital care services governed by the Exceptional Medical Expenses Act (AWBZ).For the lowest paid workers in the domestic care sector, up-skilling is both a pathtowards higher wages as well as more job security. The training of a substantial amountof the sector’s workers in the coming years will require strenuous efforts fromemployers and workers alike, to make changes in a low-budget and tight schedulebusiness.

PHOTO: © ISCOS

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Good practice

Getting organised in the cleaning sector

The cleaning sector traditionally has a low level of unionisation, which has impeded theunions’ negotiating position in collective bargaining. In 2006, the biggest trade union inthe sector set about organising the cleaners, following examples from the USA. So-called “organisers” from the trade union head office were sent to the work places ofcleaners to talk about their problems and identify local leaders. To consolidate the basethey built with these workers, the local leaders were asked to organise small actionsaround concrete improvements (for example, a place for the cleaners to drink theircoffee and eat lunch). With the small, local successes, the potential for further actiongrew and the local leaders were organised by the trade union in a national “cleaners’parliament”, which now coordinates the actions and strikes of the local activists duringthe period of collective agreements. Starting off with small actions by around 100 people,the 2009 national strike that lasted nine weeks mobilised 700 cleaners and in thecurrent 2012 strike, 2,500 cleaners stopped work.

The committee for responsible market behaviour

The 2009 cleaning strike led to the establishment of a ‘committee for responsiblemarket behaviour’. The strength of the committee is that it involves not just unions andemployers, but also client companies and their brokers. Responding to the modernmarket dynamics, in which relatively unknown employers from the cleaning sectorcompete to offer the cheapest package to client companies and institutions, the unionstrike had targeted the much more PR-sensitive client companies like the nationalairport and Railways Company, and made public their role in driving down prices. Aspublic opinion started to shift in favour of the cleaners’ plight, client companies becamemore willing to take measures. Employers, client companies and unions signed thecode for responsible market behaviour described in the previous chapter andestablished a committee to monitor its implementation. While many problems continueto exist and compliance is not perfect, the code has managed to put the responsibilityof the client on the political agenda.

Career ladders in care

As work in the domestic care sector is becoming increasingly segmented and workersthus become more and more tied to performing tasks on a single level (the level 1 aidcan only clean, not open the post; the level three aid can only attend to wound care, notwash the dishes), the domestic care sector is facing large changes in which pressuresto reduce costs make the work on the lowest wage levels increasingly precarious. At thesame time, however, employers indicate a shortage of skilled workers for the highercare levels and the national government has made a budget available for the up-skillingof lower level workers for the more complicated tasks. Together with regional adulteducation centres, a number of employers have started to train people to go from jobsthat are cut in cost-reduction efforts, to others on levels where shortages still exist orare expected.

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ConclusionsResponsible behaviour, the path to decent work

In the Netherlands, trade unions and employers organisations alike have signalledincreasing social problems due to so-called triangular labour relations: the employeeworks for one employer, but performs her or his tasks on the work floor of a thirdcompany. The employers are dependent on the client companies for jobs, yet employeesremain legally tied only to their direct employer. The resulting race to the bottom causedby public tendering and private contracting processes has greatly increased thepressure to cut costs and resulted in worse working conditions.

The sectors that fall victim to these new market dynamics are mainly low paid, low skillsectors. In the case of the two sector studies in this report, cleaning and domestic care,workers additionally tend to work part time and on flexible contracts, which makes themeven more vulnerable.

Employers and unions of both sectors have recognised the undesirable effects of thiscompetition and, in the case of the cleaning sector, established a code for “responsiblemarket behaviour”, which involves both employers, employees and client companies in aneffort to turn the tide and respect working conditions. The logic of the code is simple:costs must not be reduced so drastically that is becomes impossible to perform the workunder decent conditions or to acceptable quality standards.

In the domestic care sector, employers and unions have sought the cooperation of regionaleducation centres to up-skill those employees that presently fall victim to the downwardpressures on wages and other costs.

Thus, while it seems that the phenomenon of triangular labour relations is there to stay,employers have started to recognise the adverse effects on working conditions and worktogether with unions to tackle those problems or moderate their effects, that previouslywere seen as an outside and unchangeable “market dynamic”. Although there is a longway to go, the efforts of social partners have put this problem on the political agenda andthe unions’ organising methods have made visible a group of workers that previouslyoperated in the unseen margins of the labour market.

Recommendations

To social partners:

• Invest in organising. Social dialogue is only strong when social partners are strong.Organising is a proven method in which unions mobilise those workers that werepreviously out of reach and give both voice and face to disadvantaged workers.

• Target all those involved. In triangular labour relations, targeting not only the employersbut also their client companies, can yield more results because it concerns all partnersinvolved and because it connects the plight of the disadvantaged worker to the image ofthe client company or institution.

• Encourage responsible behaviour. A covenant or code that enterprises can subscribeto, can work as a kind of ‘fair trade’ label at home and reward responsible marketbehaviour. While immediate compliance seems to be too much to be expected, the codecan function both to organise social partners in a common quest for better regulationas well as serve as a good practice for other businesses.

Author: Janna Besamusca (AIAS)

Responsible editor: Conny Reuter

Editor: Sara Hammerton

Project Coordinators:Adeline Otto and Francesco Zoia Bolzonello

Publication Coordinator:Abigail Goundry

Printed on recycled paper©SOLIDARMarch 2012

This publication has been produced with theassistance of the European Union. The contentof this publication is the sole responsibility ofSOLIDAR and can in no way be taken to reflectthe views of the European Union.

About the project“Making Industrial Relations workfor Decent Work” is a one-yearproject which looks to intensify thecooperation and mutual learning ofrelevant actors - employers, unions,NGOs, think tanks and workers – toidentify the role as well as the toolsand models needed for effectiveindustrial relations, with the ultimateaim of combating precarious employ -ment and realising decent workingconditions and quality jobs for all.

This briefing, coordinated by SOLIDAR,was produced by SOLIDAR partnerAmsterdam Institute for AdvancedLabour Studies (AIAS) in The Nether -lands. www.uva-aias.net

All “Making Industrial Relations workfor Decent Work” pilot studies areavailable on www.solidar.org

SOLIDAR is a European network of 56NGOs active in over 90 countriesworking to advance social justice in Europe and worldwide. SOLIDARvoices the concerns of its memberorganisations to the EU and inter -national institutions across the policysectors social affairs, internationalcooperation and lifelong learning.

Supported by DG Employment, Social Affairs and Inclusion.

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