The First Part-TIME Economy in the World
Does it Work?
Agencies was signed. This agreement became the basis for the central agreement of April
1996, called: ‘Flexibility and Security’, which has since become the basis for the overhaul
of Dutch employment protection law and the deregulation of the market for temp work,
taking effect in January 1999. The agreement and the resulting legal changes will be
discussed at greater length in section four when we deal with policies.
4.2 Temporary contracts
Temporary of fixed-duration jobs (tijdelijk werk) of less than a year and without the
prospect of a standard contract involve around 249,600 contracts. This equals 3.5% of the
total or around one-quarter of all contingent jobs and is hardly more than in 1991 (246,000).
These fixed-duration jobs involve slightly more women than men, typically involve both
small part-time jobs (less than 20 hours) and full-time jobs, are usually found at the lowest
skill and pay levels, and mostly filled by youth (under 25).
If all persons on temporary contracts, including those who may gain a standard job are
included, the numbers increase from 270,000 in 1992 to 396,000 four years later (Hartog
1999). Additionally there were 100,000 workers with a temporary contract of between one
and three years, compared to 60,000 in 1992 (Tijdens 1999a). It appears that employers
have prolonged the trial period for new staff. As a rule, contracts for regular employment
stipulate a two months trial period, which is also the legal maximum. Employers may want
more time for screening new employees as a result of growing teamwork requirements,
against the background of the increased social and cultural heterogeneity of labour supply.
In any case, screening is one of the main reasons mentioned by employers for the growth of
temporary contracts (van Bolhuis 1996). Tijdens (1999a) associated the apparent increase of
risk-avoidance to employers’ attempts to increase long-term (internal, numerical and
functional) flexibility under a legal regime that makes it costly to dismiss workers (even
after the legal changes of 1999).
The Netherlands has a unique system of preventive dismissal control, inherited from the
Germans during the Second World War and continued since. Employers need a permit from
the director of the regional employment office before they can give notice to terminate a
standard employment contract. This system of ‘permits’ has been criticised as a burden on
business and a source of rigidity. Yet, empirical research hardly supports these charges.
Bertola (1990) and Mayes and Soteri (1994) rank the Netherlands not as very inflexible
compared to other European countries. In 85 per cent of all dismissal requests, a permit is
given, although special clauses for older workers and in case of sickness (during or in
anticipation of a dismissal procedure a sick worker cannot be dismissed) may create
considerable delays. More and more often the formal permit system is circumvented by
filing at the lower district court a request to terminate the employment contract on grounds
of ‘serious cause’. In that cause the issue is settled with a pay compensation or severance
payment, usually one month for every year worked. In 1996 there were 60,436 permits for
terminating employment filed at the regional employment office, against 44,426 settlements
in court, a ratio of 1.4 to 1. In 1990 the ratio had been 6 (permits) to 1 (court), in 1986 14 to
one (Wilthagen 1998).
Changes in social security laws may have made employers more hesitant to start hiring
employees on the basis of standard employment contracts. The repeal of the Law on
Sickness Absenteeism Benefits (Ziektewet) and its replacement by the Law on Extension of
the Obligation to Continued Payment in Case of Sickness Absenteeism (Wet Uitbreiding
Doorbetalingsplicht bij Ziekte, 1996), makes continued wage payment mandatory. This
means that the risk is entirely born by the employer, who of course can take an insurance,
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