Report in which the committee requests to be kept informed of development - Report No 365, November 2012

Case No 2905 (Netherlands) - Complaint date: 06-OCT-11 - Closed

Allegations: The complainant alleges that, by means of section 8 of the Postal Act and the ensuing decrees, the Government obliged the WPN to negotiate collectively and conclude a collective agreement with certain non-representative trade unions, and imposed a specific content for collective agreements. The complainant also alleges that the Government appointed a seemingly biased and partial mediator

1. 1133. The complaint is contained in a communication dated 6 October 2011 from the “Werkgeversvereniging Postverspreiders Nederland” (Netherlands Post Distribution Employers Federation) (WPN).
2. 1134. The Government sent its observations in a communication dated 31 May 2012.
3. 1135. The Netherlands has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), the Labour Relations (Public Service) Convention, 1978 (No. 151), and the Collective Bargaining Convention, 1981 (No. 154).

A. The complainant’s allegation

1. 1136. In a communication dated 6 October 2011, the WPN, an organization legally established in March 2009, denounces section 8 of the Postal Act of 2009 as well as the temporary decree on postal employment contracts – and subsequent decree(s) – passed by the Government based on the Postal Act and which makes it compulsory for the WPN to enter into a collective labour agreement (CLA) and prescribes specific contents.
2. 1137. As a background to the complaint, the complainant indicates that the contested decree which makes it compulsory for postal companies to enter into employment contracts with their mail distributors relates to the liberalization of the European postal market. In fact, the European Union (EU) has adopted measures under the First and Second Postal Directives (1997/67/EC and 2002/39/EC, respectively) to implement the phased liberalization of the postal market. With the entry into force of the Third Postal Directive (2008/6/EC) on 27 February 2008, the full liberalization of the European postal market had to be achieved by no later than 1 January 2011. Consequently, all Member States within the European Union must have transposed the Third Postal Directive into national law by 31 December 2010.
3. 1138. The complainant further indicates that TNT Post BV (hereinafter: TNT), previously as a state-run enterprise and later as a private company, was the sole letter post concessionaire within the Dutch postal market. TNT’s statutory monopoly was gradually phased out in accordance with the European Postal Directives, by which the Dutch Government aimed to fully liberalize the postal market by 1 January 2008, namely also for addressed mail from 0 to 50 grams. In the end, the Dutch postal market (on paper) was fully liberalized by the implementation of the Postal Act on 1 April 2009 (Bulletin of Acts and Decrees 2009, 155). The Dutch legislature therefore formally liberalized the postal market almost 18 months later than originally intended. The reason for this delay was that it wanted liberalization to be contingent on a “careful structuring of the employment conditions of mail distributors”, among other factors. The Dutch legislator was namely fearful that liberalization would lead to such competition in the area of labour costs that there would be a “race to the bottom” in relation to the employment conditions of mail distributors.
4. 1139. According to the complainant, the new entrants to the postal market (new postal companies) have yet to gain market share from the former monopolist (TNT) – which has a tight-knit delivery network due to its long-standing monopoly, by which the labour costs per postal item are relatively low. Therefore, the new postal companies are forced to organize their enterprise and labour structure as efficiently as possible, in order to keep the labour costs per postal item as low as possible. They have chosen to deliver post only two days a week. As a result, the new postal companies make use of casual workers on the basis of a contract for services to deliver post. These workers, who are not financially dependent on their work at the new postal companies, mainly include students, housewives and senior citizens willing to earn money to supplement their student grants, household income or (pre-)pensions. According to the complainant, several surveys determine that these workers, for the most part, would not want employment contracts, precisely because of the flexibility and freedom that is inherent to the contract for services (e.g. the lack of fixed working hours and an unlimited number of days’ holiday). These workers are remunerated according to a refined standard pay system, based on which they can earn minimum wage if they deliver the post at an average speed. The calculation of the wage level does not only take into account the number of delivered items, but also the weight thereof, the number of postal items for each postal address and the distance that has to be covered between the different addresses.
5. 1140. By contrast, the former state-run enterprise (TNT) still operates with a workforce of traditional postmen, consisting for the most part of mail distributors who are employed on the basis of full-time employment contracts for an indefinite period of time. These workers are financially dependent on their jobs, and the labour costs are considerably higher as a result of the inherent and compulsory deduction of social security and pension contributions coupled with employment conditions that date back to when TNT was still a state-run enterprise. The complainant states that it was already clear back in 2007 that drastic cutbacks in TNT’s workforce would eventually be inevitable mainly on account of the significant shrinkage of the postal market caused by the digitization process, the automation of the postal sorting process and the competition of the new postal companies that would come into play. Therefore, a number of major trade unions which had many members among TNT’s traditional postmen insisted that the Government adopt measures before the full liberalization of the postal market went ahead.
6. 1141. The Ministry of Economic Affairs, Agriculture and Innovation, in joint consultation with the Ministry of Social Affairs and Employment, then approached the new postal companies and their investors with the urgent request to enter into a CLA with the trade unions. The conclusion of such a CLA was set as a pre-condition for the full liberalization of the postal market with effect from 1 January 2008. However, the liberalization was postponed when no CLA had been concluded by 1 January 2008. The Ministries were already aware of the trade unions’ demand for the conclusion of a CLA: a time frame had to be agreed within which the new postal companies would also employ mail distributors – just as TNT’s postmen – on the basis of an employment contract (hereinafter: “the transitional model”).
7. 1142. The new postal companies found themselves under pressure and entered into an Agreement in Principle followed by a CLA with the trade unions on 12 November 2008, in which they agreed to endeavour to employ 80 per cent of their mail distributors on the basis of an employment contract within 3.5 years of the liberalization of the postal market. However, the Agreement in Principle, which forms an integral part of the later CLA, expressly stipulates that the transitional model ought to be contingent on (uncertain) market developments and other uncertain developments. The parties therefore intended to create a flexible transitional model. The final percentage of 80 per cent would need to be achieved by means of a flexible transitional model created by independent economists in accordance with the Agreement in Principle. This transitional model was created on 31 March 2009 by the SEO Institute (an independent economic research institute) on the instructions of the CLA parties and contained the following transitional percentages: 14 per cent in April 2010, 40 per cent in April 2011, 74 per cent in April 2012 and 80 per cent in October 2012 (attached to the complaint). These percentages were flexible in the sense that the SEO Institute would determine in April of each year whether the percentages had been achieved or examine the reasons why they had not.
8. 1143. The complainant underlines that the economists concerned at the SEO Institute have explicitly referred to the crucial importance of a flexible transitional model in several research reports where they concluded that “transition towards better employment conditions costs money, and if that cannot be earned by factoring the rise in labour costs into tariffs, this will result in the bankruptcy of the postal companies concerned”. Furthermore:
   • the current competition in the already liberalized part of the market is destructive as the prices are too low to cover the incurred costs and the companies cannot continue to survive. A transition to more effective competition is needed in order to be able to pay for the transition from the contract for services. ... Briefly put, market players can afford better employment conditions by passing on the cost to the market. … The transitional model has a flexible structure. Certain knobs in the model can be tweaked depending on actual market developments.
9. 1144. The new postal companies united in a new employers’ organization (WPN) and agreed to sign the CLA on 11 August 2009 with the trade unions. The transitional model created by the SEO Institute was then incorporated and detailed further in the CLA. The postal market was only liberalized after the CLA and the flexible transitional model came into being. As such, the Ministry issued a press release on 24 March 2009 stating that the Government had decided, after taking everything into consideration, that the conditions for liberalization had been met and that the postal market could be opened in a “socially responsible manner” on 1 April 2009.
10. 1145. The CLA and its flexible transitional model were immediately placed under pressure by the Government, even though neither the new postal companies nor their mail distributors – the majority of whom favoured the more flexible contract for services – had any need for them. While the mail distributors working at the new postal companies were for the most part not organized in a trade union, the trade unions with which the WPN had to enter into the CLA were not actually representative of these workers. As the trade unions that wanted to enter into the CLA and its transitional model had practically no members among the mail distributors working at the new postal companies, they were namely not able to enforce the conclusion of this CLA, for instance by means of strike action or the threat thereof. For that reason and because neither the new postal companies nor the vast majority of their mail distributors had any interest in the incorporated transitional model, the trade unions feared that the new postal companies would not comply sufficiently or fully with the CLA, or would even terminate it once the full liberalization of the postal market was a reality. Consequently, they requested the Government for “a deterrent” in the form of a Government measure to prevent the termination of the CLA and indirectly enforce compliance with it.
11. 1146. The possibility of introducing the Government measure was determined during the drafting of the Postal Act 2009. Section 8 of the Act creates the power to lay down rules by means of a governmental decree in relation to employment conditions that are to be observed if:
    • (a) work is performed under socially unacceptable employment conditions;
    • (b) there is a temporary problem restricted to the postal sector; and
    • (c) in so far as the problem cannot be resolved, by adapting generally applicable rules or by way of agreement between the employer concerned and representatives of workers’ organizations.
12. 1147. The complainant indicates that although it has never been objectively proven that there were any socially unacceptable employment conditions, let alone a temporary problem restricted to the postal sector, and despite the fact that the social partners had already reached agreement on the content of employment conditions for mail distributors at new postal companies, the State Secretary issued a governmental decree under section 8 of the Postal Act 2009, which made it compulsory for the new postal companies to employ all their mail distributors on the basis of employment contracts from the date of its entry into force, namely 1 January 2010. If they fail to do so, the OPTA (the government agency entrusted with supervising compliance with the Postal Act 2009) can impose very high fines on these postal companies.
13. 1148. As a justification for imposing this obligation by means of a governmental decree, the State Secretary referred to the results of an investigation that the Health and Safety Inspectorate carried out in 2007 into the wage levels of mail distributors working at the new postal companies. The Health and Safety Inspectorate investigated whether the new postal companies complied with the Minimum Wage and Minimum Holiday Allowance Act. The investigation supposedly revealed that the mail distributors do not always receive the statutory minimum wage for their work. Therefore, according to the explanatory notes to the decree, the State Secretary regarded this as socially unacceptable.
14. 1149. The complainant contends that the investigation conducted by the Health and Safety Inspectorate only took place among 357 of the 30,000 mail distributors employed by the new postal companies, and a post round was only actually completed together with 11 of these randomly selected mail distributors. A counter investigation has thus revealed that the result of the Health and Safety Inspectorate’s investigation does not provide a reliable picture. The investigation moreover intentionally disregarded the refined standard pay system used by the new postal companies to calculate the wage level, as well as the individually determined preferences for the desired work pace. Those personal preferences are particularly relevant for determining the wage level in relation to the number of hours worked. More recently, it comes as no surprise that the Health and Safety Inspectorate could not conclude from a new investigation that it conducted in 2010 into the wage level of mail distributors working at the new postal companies – who are paid in the same way as the mail distributors from the 2007 investigation – that there is any question of underpayment.
15. 1150. However, notwithstanding the expert counter investigations, the State Secretary went ahead with the introduction of the governmental decree. He based this decision on there being a temporary problem restricted to the postal sector that could be resolved by temporarily imposing the obligation on new postal companies to work with mail distributors employed on the basis of an employment contract, or to make arrangements in that regard with the trade unions. For that reason, the governmental decree was given a fixed term (the current version expires on 1 January 2017).
16. 1151. In order to ensure that mail distributors would receive the statutory minimum wage (including holiday allowance), the governmental decree made it compulsory for new postal companies to only work with employees employed on the basis of an employment contract, with effect from 1 January 2010. However, in accordance with article 2, paragraph 2, of the decree, this obligation did not apply to a postal company bound by a CLA that compels new postal companies to ensure that:
    • (a) at least 80 per cent are appointed as mail distributors [on the basis of an employment contract (added by lawyer)] no later than 42 months after the law enters into force; and
    • (b) this percentage is reached progressively in the preceding months, whereby at least the following are appointed as mail distributors (on the basis of an employment contract):
      • (1) 10 per cent: no later than 12 months after the law enters into force;
      • (2) 30 per cent: no later than 24 months after the law enters into force; and
      • (3) 60 per cent: no later than 36 months after the law enters into force.
17. 1152. The complainant states that both the decision to introduce the governmental decree and the content thereof took the new postal companies by surprise. Since the WPN had already entered into a CLA with the trade unions on behalf of the new postal companies, a strict interpretation of section 8 of the Postal Act did not leave any further room for the introduction of the governmental decree. In addition, the governmental decree, contrary to the transitional model that had been agreed with the trade unions in the CLA, included inflexible transitional percentages. The State Secretary ultimately decided on a governmental decree with transitional percentages that were “cast in stone” because of the sustained pressure exerted on him by the trade unions. After the State Secretary yielded to their pressure, the trade unions insisted that the WPN adapt the flexible transitional model agreed in the CLA to the new inflexible requirements laid down by the decree.
18. 1153. The alternative was an immediate switch from working with mail distributors employed on the basis of a contract for services, to working with mail distributors employed on the basis of an employment contract. The governmental decree made this compulsory if the new postal companies were not bound by a CLA that complied with the inflexible requirements set by the governmental decree. According to the complainant, this alternative would quickly lead to their bankruptcy because the companies would not be able to absorb the sudden and very significant associated increase in costs. Furthermore, the trade unions regularly used this alternative as a threat.
19. 1154. The complainant also advises that one of the researchers of the SEO Institute that had been brought in by the CLA parties and previously created the transitional model for them has therefore expressed criticism over the requirements set by the governmental decree for the transitional model. In her opinion, the flexible transitional model agreed by the CLA parties has been “ruthlessly sidelined” given that the transitional model prescribed by the governmental decree is “cast in stone”. The researcher considers that the financial scope to make the transition cannot be determined in advance, but only estimated at best. She points out that the new CLA to be agreed for the postal companies is only affordable if a greater volume of post can be achieved and higher tariffs can be charged than at present. Agreeing to a fixed transitional model would make this very difficult. The researcher concluded by pointing out that the Government has not resolved the most pressing problem in the postal market, namely unfair competition. There is namely still no proper competition regulation for the postal market and TNT is therefore able to price its competitors out of the market due to its far greater market share. Without proper competition regulation and with the “rigid governmental decree that is out of line with market conditions”, there is therefore a significant chance, that newcomers will either disappear from the market or only have a marginal role. TNT would then remain as the de facto monopolist.
20. 1155. As the new postal companies were “backed up against the wall” in the negotiation process by the governmental decree, the WPN instituted interlocutory proceedings on their behalf against the State and applied for an order prohibiting the entry into force of the governmental decree. This application was based on the following grounds:
    • – the governmental decree does not comply with any of the requirements laid down by section 8 of the Postal Act;
    • – the governmental decree is contrary to section 610, Book 7 of the Dutch Civil Code and the underlying individual freedom of contract;
    • – the governmental decree is contrary to the collective bargaining and contractual freedom of the WPN and its members, as guaranteed, inter alia, in various ILO Conventions ratified by the Netherlands;
    • – the governmental decree is contrary to primary and secondary EU law (namely the free movement of services and the freedom of establishment and to the European Postal Directive that prescribes the liberalization of the postal market);
    • – the governmental decree is contrary to several principles of good governance and/or regulations.
21. 1156. On 31 December 2009, the Court granted the WPN’s application in the first instance already on the basis of the first ground: as a CLA had been concluded, there was no scope in the Court of First Instance’s opinion for the entry into force of the governmental decree. This ruling was however overturned by The Hague Court of Appeal in a judgment of 13 April 2010 because the WPN was held not to have had any urgent interest at the time of its application. According to The Hague Court of Appeal, the CLA (and its transitional model) actually did comply with the requirements laid down by the governmental decree and so the obligation to employ all mail distributors on the basis of an employment contract with effect from 1 January 2010 did not apply to the new postal companies. The Court of Appeal firstly held that the transitional model with flexible transitional percentages was part of the CLA and secondly, that since the flexible transitional percentages mentioned in the CLA were higher than those prescribed by the governmental decree, the prevailing CLA complied with the requirements of the governmental decree. For the time being, therefore, there was no urgent interest in judicial intervention as requested by the new postal companies.
22. 1157. Although the WPN considered the interpretation by legislative history of the Court of Appeal to be correct, the State Secretary remained firmly of the view that the transitional model agreed on between the new postal companies and the trade unions did not comply with the requirements of the governmental decree and requested OPTA to supervise compliance with the governmental decree with effect from the autumn of 2010, in order to also place the new postal companies under pressure in this way. This development prompted the WPN to institute an action on the merits (which is still pending) against the State in which it requests an order declaring the governmental decree to be non-binding.
23. 1158. In the meantime, the new postal companies had offered 14 per cent of their mail distributors an employment contract in accordance with the transitional model agreed with the trade unions under the CLA before 1 April 2010. However, only 3.2 per cent of the mail distributors accepted the offer, even though they were informed about the pros and cons of working on the basis of an employment contract during information sessions with brochures and verbal advice organized by the new postal companies and the trade unions. The complainant asserts that this again confirmed that the overwhelming majority of mail distributors working at the new postal companies did not require an employment contract. The reason for this was that they were not financially dependent and favoured an adaptable form of contract with flexible working hours and an unlimited number of days off.
24. 1159. The trade unions were so dissatisfied about the very low percentage of mail distributors who actually accepted the offer to convert their contracts for services into employment contracts, that they decided in June 2010 to terminate the CLA with effect from 1 October 2010. As a result, there was a threat that the new postal companies would fall directly under the obligation in the governmental decree to employ their mail distributors on the basis of employment contracts (or otherwise face fines of €450,000 per contravention) three months after the termination of the CLA, i.e. with effect from 1 January 2011. Even if the new postal companies were to succeed in finding an adequate number of mail distributors prepared to enter into an employment contract with them (which, given the perceived lack of willingness, seems to be an impossible task) – this would lead to such a sudden increase in costs that bankruptcy for these postal companies seems inevitable.
25. 1160. The complainant observes that the new postal companies are accordingly trapped between the requirements of the trade unions and the legislator on the one hand, and the price war and difficult circumstances in the liberalized postal market on the other hand, including the fact that most of their mail distributors do not wish to enter into an employment contract with them. As an alternative to the governmental decree, the new postal companies have also repeatedly insisted – without success – on supervision in the postal market in order to prevent a price war and to achieve fair competition in the postal market.
26. 1161. As a result of the termination of the CLA, the WPN tried to reach consensus with the trade unions on a new CLA, but the negotiations fell through on 27 September 2010 since the trade unions continued to insist on the impossible requirement of agreeing to fixed (inflexible) interim transition percentages that the new postal companies could not possibly achieve because of the low tariffs in the postal market. The Minister of Economic Affairs, Agriculture and Innovation suspended the governmental decree and appointed a “pathfinder” to get the CLA negotiations back on track. While the new postal companies insisted that the obligation under the governmental decree – namely that all mail distributors must work on the basis of an employment contract – needed to be withdrawn or at least relaxed, the Minister of Economic Affairs, Agriculture and Innovation (hereinafter: “the Minister”) proved unwilling to do that during the emergency debate with the Lower House on 7 October 2010. It was noteworthy, however, that the Minister acknowledged during the debate that specific employment conditions should not be a political issue.
27. 1162. As a result, the Minister decided to temporarily suspend the effect of the governmental decree in order to give the new postal companies and trade unions time to agree on a new CLA. In order to get the stalled CLA negotiations back on track, Mr R.L. Vreeman was appointed as “pathfinder”, with the mandate to mediate between the WPN and the trade unions and to issue an opinion containing a solution for the CLA dispute. The trade unions had an initial dismissive reaction to the appointment of a mediator. They set this out in a letter to the Minister, in which they also made tough transitional and other claims and demands with regard to the content of the CLA. In other words, they were asking for government intervention instead of allowing the consultation between social partners to get back on track again through a “pathfinder”.
28. 1163. On the other side, the WPN and its postal company members indicated that they were not opposed to attempted mediation via a “pathfinder”, but viewed the sudden appointment of Mr Vreeman, without any prior consultation, with distrust as he was a former trade union leader, as well as the former leader of a large left-wing political party in the Dutch Parliament that advocates mandatory employment contracts for the new postal companies. However, the Government rejected the alternative, objective and skilled candidates nominated by the WPN. Mr Vreeman stated at the very outset of the first “exploratory” talks with all concerned that nothing other than the creation of a transitional model towards working with employment contracts (such as guaranteeing minimum wage) could therefore be up for discussion. The Government was therefore exerting pressure on the CLA negotiation process once again. This time it was through a unilaterally appointed “pathfinder”, who set himself the task of ensuring that the joint objective of the Government and trade unions was achieved, namely introducing employment contracts in new postal companies, to the exclusion of all other reasonable alternatives put forward by the new postal companies.
29. 1164. The complainant refers in this regard to the frequent consultations between the State Secretary and the Lower House of the State from October 2010 up to and including March 2011. The new postal companies obviously took note of these deliberations, in which the State Secretary was called upon by the Lower House to adopt more draconian and stricter measures against the new postal companies to “force” them to implement employment contracts for all mail distributors. The trade unions also regularly referred to the inclination of the parliamentary debate in the Lower House during negotiations about the new CLA whereby the trade unions felt that they were being supported.
30. 1165. After the termination of the CLA by the trade unions effective 31 October 2010, in a letter of 28 June 2010, the WPN felt it had no option, also having regard to the political pressure coming from the deliberations in the Lower House, but to again request the Court, in interlocutory proceedings, to intervene because of the threat that the governmental decree would enter into force on 1 January 2011. As a result, however, the State Secretary offered to temporarily suspend the governmental decree (initially until 15 January 2011 and later until 1 April 2011 in order to allow the appointed “pathfinder” to consult with the parties), so as to facilitate consultation, on condition that the WPN would abandon its new legal action. The complainant had no alternative but to accept and took up the State Secretary’s proposal to suspend the governmental decree and temporarily abandon new interlocutory proceedings, in order to allow the “pathfinder” to do his work and to consult further with the trade unions.
31. 1166. Against the aforementioned backdrop of deliberations in the Lower House and knowing that the alternative to the mediation consisted of the immediate entry into force of the governmental decree, the complainant states that it was forced to go and sit around a table with this mediator and the trade unions. Mr Vreeman’s advice was twofold: enter into a CLA with a transitional path and fixed percentages and establish a sectorial fund from which the transition in the new postal companies to employment contracts could be financed. The new postal companies would have to finance this sectorial fund themselves and the associated costs would have to be passed on to their clients and customers. This was an impossible solution contrary to antitrust law. The mediator alternatively suggested that the legislature intervene directly and pass law (by a Postal Act or a governmental decree) that would prescribe employment contracts. While the complainant came back to the bargaining table, it came as no surprise that the trade unions made tough demands concerning the transitional percentages, the time frame and compliance with the transitional model. The issue of any flexibility of transitional percentages – once the parties’ starting point – was long since off the agenda.
32. 1167. The new postal companies meanwhile found themselves under time pressure: the suspension of the governmental decree until 1 April 2011 was almost over and the trade unions did not want to make any concessions in the form of flexible transitional percentages. The trade unions referred to the parliamentary debates in the Lower House in which tough measures were being requested and simply sat back. On 31 March 2011, under pressure of the parliamentary debates in the Lower House and the aforementioned time pressure, the WPN entered into a new CLA Mail Distributors, which included a transitional model with seemingly inflexible transitional percentages.
33. For instance: Section 13, subsection 1, of the CLA stipulates:
    • At least 80 per cent of the mail distributors employed at every employer and/or client must be appointed on the basis of an employment contract by 30 September 2013. The interim steps are as follows:
      • – 10 per cent by 31 December 2011;
      • – 25 per cent by 30 June 2012;
      • – 40 per cent by 31 December 2012;
      • – 60 per cent by 30 June 2013;
      • – 80 per cent by 30 September 2013.
34. 1168. This new transitional model therefore gives the postal companies an extra year in which to make the transition, but is still based on the final target of 80 per cent of the mail distributors being employed on the basis of an employment contract, in this case with effect from 1 October 2013. It is also clear from section 13, subsection 4, of the CLA that the transitional percentages constitute specifically enforceable obligations.
35. 1169. The State Secretary meanwhile arranged for the entry into force of a newer version of the governmental decree – the Temporary Decree Postmen 2011 and the simultaneous repeal of the original decree (Bulletin of Acts and Decrees 2011, 159). Whilst this subsequent decree still prescribes a transition towards employment contracts, it no longer sets specific requirements for the transition percentages to be included therein. After scathing criticism was levelled at the State Secretary by the trade unions and political pressure was exerted on him from within the Lower House as a result of this second “watered-down version” of the original governmental decree, he announced a newer (third) version of the governmental decree just two weeks after the implementation of the second one, which will set tougher requirements for the transitional model again. The complainant regrets that although the exact content of the third version of the governmental decree has not yet been disclosed, it already hangs like a “sword of Damocles” above its head and its new postal company members.
36. 1170. Since the Council of State (the advisory body of the Dutch legislator) had indicated on several occasions that section 8 of the Postal Act 2009 offers an inadequate basis for the governmental decree, for various reasons, the Minister submitted a legislative bill to amend this section to Parliament. According to this legislative bill, section 8 of the Postal Act 2009 would have to read as follows: “Rules concerning the nature of the legal relationship between a postal company and mail deliverers may be laid down by means of a governmental decree. The application of those rules may also be limited to certain categories of postal companies or to specific circumstances.” The purpose of the amendment is to make it even simpler for the State Secretary to intervene and force the new postal companies to only work with mail distributors who are employed on the basis of an employment contract, so that it is easier to place the new postal companies under pressure to also comply with the transitional model as currently agreed with the trade unions.
37. 1171. In the complainant’s view, the present case can be compared to the situation in the 1980s when the Government intervened by means of the Pay Adjustment (Semi-Public Sector) Act in wage developments in this sector. This Act made it possible for the Government to freeze employment conditions for a specific period. As the result of a complaint by the trade unions who were parties to the sectorial CLA (the Christian Trade Union Federation (CNV), the Trade Union Confederation (FNV) and МНР), the International Labour Organization (ILO) held in June 1989 that the power to freeze employment conditions was contrary to the right to free collective bargaining of employment conditions entrenched in the ILO Conventions (see Case No. 1469). While the Government wanted to intervene in the 1980s in the collective bargaining of employment conditions within the semi-public sector in order to prevent costly employment conditions, the Government is in the present case intervening in the collective bargaining of employment conditions in the postal sector to prevent “socially unacceptable employment conditions”. The complainant asserts that the Government has acted in both cases contrary to the limits of collective bargaining and contractual freedom. The complainant is of the view that the Government should limit itself to creating general statutory frameworks for consultation on employment conditions (such as the Minimum Wage Act) and ought to refrain from judging the outcome of specific consultation between social partners in a particular sector. In contrast, the Government has involved itself in a specific and far-reaching way in the present case with the collective bargaining of employment conditions in the postal sector and has thereby become a biased umpire between the social partners. This has in fact given rise to a “monstrous alliance” between the trade unions and politicians.
38. 1172. This “monstrous alliance” has resulted in the complainant being forced to engage in collective bargaining and enter into a CLA for its new postal company members, even though neither of these postal companies nor their mail distributors have any interest in the CLA. Moreover, the complainant denounces the fact that it has even been forced – completely contrary to the interests of its new postal company members – to enter into a CLA with a specific content: namely a transitional model consisting of seemingly inflexible transitional percentages. The complainant was also forced to amend existing CLA arrangements, in the form of a flexible transitional model. As such, the balance of power at the bargaining table was shifted very unnaturally to the side of the trade unions.
39. 1173. According to the complainant, this intervention by the Government has clearly been driven by its struggle with the lack of trade union power in the new postal market. In view of the fact that the diminishing influence of the trade unions is not a unique phenomenon limited to the postal sector, and can be expected in other sectors, it is undesirable and contrary to collective bargaining and contractual freedom if the Government would intervene in every sector where trade union power is waning.
40. 1174. Due to the permanent threat that emanates from section 8 of the Postal Act and the original, current and future governmental decrees based thereon, which continues to disrupt the balance of power at the bargaining table in an unacceptable way and because the national action on the merits instituted may still drag on for years, the complainant is of the view that it has an interest in a fundamental opinion on the lawfulness of this governmental measure as soon as possible, in view of its right to collective bargaining and contractual freedom as guaranteed in the provisions and the rationale of Conventions Nos 98 and 154.

B. The Government’s reply

1. 1175. In its communication dated 31 May 2012, the Government asserts that it has in no way violated the right of free and collective bargaining of the WPN, protected by ILO Conventions Nos 98 and 154. Out of true concern about socially unacceptable terms of employment (as a result of increased competition and decreasing volumes), the Government encouraged the parties in the CLA to come to agreements on the terms of employment and on contracts themselves.
2. 1176. The Government explains that the Dutch postal market entered a new phase upon its full liberalization in 2009 because of European directives. During the transitional phase from a legitimate monopoly on postal delivery to a free postal market with increased competition pressure in terms of employment, one of the preconditions for a fully open postal market, therefore, is the presence of socially acceptable terms of employment. According to the Government, terms of employment can only be seen as such if postal carriers work under an employment contract, in which case the Minimum Wage and the Minimum Holiday Allowance Act would apply. With the latter Act, the Netherlands meets the obligations entered under ratified ILO Convention No. 131 regarding the establishment of a minimum wage.
3. 1177. The social partners are primarily responsible for the realization of terms of employment but the Government and Parliament are prepared to support the realization of employment contracts in the postal market with legislation in this transitional phase. The Temporary Decree Postal Carriers of 2011 (hereinafter: the Decree) was established to that end. The Decree supports the social partners in the transitional phase to come to socially acceptable terms of employment for postal carriers in the market. Once the transitional phase is over, the Government’s supporting role will no longer be necessary.
4. 1178. In the Government’s view, the postal market is different from other markets in the transitional phase. The new postal distribution companies have no tradition of agreements on collective terms of employment and generally binding (provisions of) agreements in the CLA. Furthermore, the postal market is a declining market; the number of postal items carried between 2005 and 2010 decreased from 5.6 billion to 4.8 billion. This increases the competitive pressure.
5. 1179. The postal sector is a labour-intensive sector. The pressure on the terms of employment is felt to be relatively stronger because of this. The pressure is expressed by the fact that postal carriers of the new postal companies mainly work on commission contract, whereas most people in the Netherlands work on an employment contract. Because of the social protection which is part of the employment contract, promoting the use of the legal relationship of the employment contract is an effective means to achieve the intended objective, which is promoting the realization of socially acceptable terms of employment. As regards terms of employment, the law stipulates minimum provisions such as the minimum wage and the minimum number of vacation days.
6. 1180. The realization of socially acceptable terms of employment requires Government support in the transition phase, also in the light of recent developments such as the realization of a CLA and its generally binding declaration. The Government asserts that its support is still required at the time the present reply is being drafted, since until now it appears difficult to foresee the end of the transitional phase and because the CLA and its binding declaration have a limited period of effectiveness.
7. 1181. Fixing the adjustment percentages and the final objective in the Decree of 2011 ensures the adjustment to employment contracts can be maintained, should the CLA be cancelled at a certain moment. If no CLA applies, there is no basis for the decision for a generally binding declaration and this decision will be revoked. Fixing the agreements made in the CLA in the Decree is also necessary should this situation occur. Such Decree aims at supporting a development in the postal market with socially acceptable terms of employment with the employment contract being the prevailing contract form.
8. 1182. The Government indicates that the difficulties encountered in the postal sector are temporary and limited to the postal sector. They cannot be solved by adjustment of the regulations that apply generally or by a CLA between the employers and trade unions. The Decree guarantees specifically in the postal sector the execution of the agreements in the CLA on adjusting to the situation in which at least 80 per cent of the postal carriers have an employment contract.
9. 1183. The Decree was finalized at a time where no CLA was yet concluded. It was therefore not clear at that time at which moment in time the social partners envisioned for the realization of the final percentage of 80 per cent of the employment contracts. Furthermore, it was still unclear which agreements the social partners envisioned for the adjustment speed towards that final percentage. The Decree only mentions a final percentage and a final date. This stimulated the social partners and gave them enough space to come to further agreements in the CLA. In the meantime, the social partners signed a CLA on September 2011. This CLA includes an adjustment path on the basis of which fixed intermediate steps (increasing percentages on certain dates) help reach 80 per cent of employment contracts as of 30 September 2013. An adjustment path is important to enable parties to adjust to the new situation.
10. 1184. The Government indicates that the Decree was amended in spring 2012. This latest amendment brings the Decree into line with the CLA agreed on September 2011. Firstly, the date of 30 September 2013 is included in that CLA as the point in time at which the postal companies concerned must have concluded employment contracts with 80 per cent of their postal carriers. Secondly, the CLA contains a so-called adjustment path with interim percentages to help reach 80 per cent of employment contracts as of 30 September 2013. This adjustment path has now been included in the Decree.
11. 1185. The Government further provides its observations and some specific explanations in view of the extensive substantiation of the complaint by the WPN; because the labour costs are an important part of the total operation costs in postal distribution, there was a risk that an increasing competition would lead to a downward pressure on the terms of employment. The most important term which the Government linked to a fully open postal market in April 2009 was that postal carriers would work at socially acceptable terms of employment. Some new postal companies chose to keep the labour costs as low as possible by closing commission contracts with the postal carriers instead of the employment contract common in the country. The commission contract is the usual form for rendering services by entrepreneurs or self-employed persons. Because of its specific legal form, the commission contract is not covered by the Minimum Wage and the Minimum Holiday Allowance Act and the minimum provisions of the employment agreement. The protection these acts intend to offer was evaded for postal carriers in this way. The Government explains that the labour inspectorate (the entrusted authority to supervise the legal minimum wage and the labour conditions) investigated the remuneration of postal carriers and found that the ones between the age of 23 and 65 years on average were paid about 30 per cent below the level of the legal minimum wage. Consequently, the concerns about socially acceptable terms of employment – the most important condition attached to the full liberalization of the postal market – were justifiable. The implementation of measures to protect postal carriers received broad political support in the Parliament. In this context the basic principle remains that the postal distribution companies and trade unions should reach agreement on the terms of employment as they bear the primary responsibility for reaching agreement on (collective) terms of employment as laid down in the provisions of ILO Conventions Nos 87 and 98. In the Government’s view, the legislation and regulations are intended to support the agreements reached by the parties to a CLA and serve as “the big stick” in the event of non-compliance with the provisions of the CLA. Pursuant to customary practice in the country, the relevant legislation and regulations impose obligations governing terms of employment (usually statutory minimum requirements). Parties to collective bargaining may exercise their joint discretion in departing from those obligations. Pursuant to the provisions of ILO Convention No. 154, the Government is under the obligation to promote collective bargaining. Therefore, the Government is committed to the principle of collective bargaining.
12. 1186. The Government encouraged the conclusion of a CLA for the new postal companies, although this was not the condition attached to a fully open market. The condition was that postal carriers would work in accordance with socially acceptable terms of employment. The initiative was left to the collective labour agreement parties, according to the principle that social partners are primarily responsible for the forming of employment terms. The realization of a collective labour agreement for the new post distribution companies was an extremely laborious process, both the realization of an agreement in principle as the conversion of that agreement into a collective labour agreement. The Dutch Government never forced parties to come to a collective labour agreement. The Dutch Government did assist the collective labour agreement parties in formulating the collective labour agreement texts at their request so that these texts would qualify for a generally binding declaration.
13. 1187. The parties agreed on a CLA with a flexible adjustment model for the conversion from commission contracts to employment contracts. The final goal of 80 per cent of employment contracts was fixed and the interim percentages could be adjusted by new interim agreements between the postal distribution companies and the trade unions. It was the trade unions’ intention – if there was insufficient progress – to enter into interim agreements in order to achieve the agreed percentages of employment contracts anyway.
14. 1188. The postal market was fully opened on 1 April 2009 and the first CLA for the new postal companies was signed on 12 November 2008. The complainant states in this regard that the market was only fully opened after the first collective labour agreement had been concluded. The Government indicates that the first version of the CLA (validity 1 April 2009 to 30 September 2012) was indeed signed on 12 November 2008, but the starting date was put on the “date of the full opening of the postal distribution market” – which became 1 April 2009. Moreover, the CLA was only registered at the Ministry of Social Affairs and Employment on 11 August 2009. The receipt notification was sent on 17 August 2009. Pursuant to article 4 of the Wages Act, a CLA should be registered at the Ministry, after which it can be effective as being a CLA in the sense of the Collective Labour Agreement Act with all rights and duties connected to it by the Act. In fact, there was a CLA in the sense of the Collective Labour Agreement Act only after an ample four months after the full opening of the postal market. The CLA was then changed in between (registered at the Ministry of Social Affairs and Employment on 2 November 2009 and receipt of notification sent on 3 November 2009). The termination of this CLA was registered at the Ministry of Social Affairs and Employment on 13 July 2010. The following CLA (duration from 1 April 2011 to 31 December 2013) was registered on 26 September 2011, after which the receipt of notification was sent on 27 September 2011.
15. 1189. In the Government’s view, the CLA and the adjustment model is a free agreement between the new postal companies and the trade unions. It did not come about through pressure of TNT employees. These employees indeed have an interest in fair competition as regards employment terms and that is what the CLA for the new postal companies is meant to achieve.
16. 1190. Regarding the argument from the complainant that trade unions hardly have members in the new postal distribution companies, the Government indicates that such a statement is not substantiated by figures. The postal carriers in the new postal companies are perhaps relatively less well organized, but that does not mean that the trade unions cannot make a stand for their interests. It was specifically important for the trade unions to gain influence in this new part of the market, considering the bad employment terms in effect there and the unbalanced/downward competition on the employment terms by these companies.
17. 1191. Investigation by the labour inspectorate shows that the postal carriers at the new postal distribution companies having a commission contract (between 23 and 65 years old) on average were paid about 30 per cent under the level of the legal minimum wage. Although the new postal distribution companies continuously contest this investigation and its results, they have yet to deliver proof that the remuneration indeed is satisfactory. The labour inspectorate did not investigate whether the new postal distribution companies complied with the requirements of the Minimum Wage Act. It investigated the remuneration level and compared it with the level of the Minimum Wage Act. The investigation was criticized at three important points: a too wide spread in the results, the investigation objective was insufficiently represented and it was insufficiently familiar to the group. This criticism, however, was not relevant in the Government’s view. The spread in the results had been corrected in a statistically solid way and the investigation objective had been misrepresented in a preliminary draft. The third point, the familiarity of the investigation objective, was verified by the investigators. It turned out that even though the objective was known, the respondents had not expressed themselves in a socially desirable way to influence the results. The opposite was noticeable. Lastly, the investigation of 2010 was carried out under a different population, i.e. the carriers working on an employment contract. This group seems to be paid at around the level of the Minimum Wage Act. This group cannot be compared, however, to the group of carriers on a commission contract which was not investigated in 2010. The Government also recalls that the new postal companies committed to carry out an independent audit of the remuneration systems. This is yet to be done.
18. 1192. Furthermore, the Government asserts that the trade unions did not trust compliance to the CLA by the new postal companies, partly because of the laborious realization of the CLA, and therefore requested the Government for a “big stick” in the form of supporting legislation. It was only because of the commitment of the Government (the current Decree) that the trade unions entered into a CLA and no longer opposed the full opening of the postal market.
19. 1193. The Decree was set up in such a way that postal distribution companies could deviate from it via a CLA. Besides that, the adjustment path for the conversion from commission contracts to employment contracts in the Decree was about 30 per cent below the level of the CLA, so that there was enough built-in flexibility for the parties to downsize the agreements if there was a need for it. The Decree does not oblige companies to enter into a CLA and imposes minimum requirements that may be deviated from in a CLA. The adjustment path has been established in a first Decree deliberately after the CLA was signed, and about 30 per cent below the level of the agreements in the CLA, so that the parties would be sufficiently flexible also in this sense. Also in the second (and present) Decree, the percentages were set after the parties had come to an understanding. The percentages of employment contracts in the Decree are not higher than, but equal to, the percentages in the collective labour agreement.
20. 1194. The Government asserts that in no way have threats been expressed against the new postal distribution companies. It recalls that a Decree was passed only after the CLA (with lower demands than the CLA). The potential bankruptcy that is being paraded by the complainant cannot be substantiated in any way. The new postal companies did not go bankrupt. However, if a new postal company were to go bankrupt, it very much remains to be seen if this is because of legislation. There are only minimum legislative requirements to the adjustment to a socially acceptable level of employment terms. The Government is of the view that if a minimum level of employment terms cannot be achieved by a financially sound company, its viability should then be questioned.
21. 1195. The legal proceedings by the new postal companies against the Decree had the trade unions faith in the compliance with the CLA decreased to almost zero. The resistance against the “big stick” did not go down well with the trade unions, because the demands of the Decree were well below the agreements in the CLA. The new postal companies believed that a Decree could not exist because they had agreed on a CLA. The Government, however, believes that the single fact of a new CLA does not mean that a situation has been reached and that it works towards socially acceptable employment terms. The Order in Council remains the “big stick” so that such a situation can be reached eventually. The Government does not recognize itself in the position stated by the complainant that the Decree was “temporarily suspended” on the condition that the new postal companies would cancel the proceedings against the Decree. The Government declares that it has never requested the new postal companies to suspend the legal proceedings. Concerning the legal proceedings, the Government indicates that the new postal companies lost the procedure on the merits against the Decree and have recently appealed.
22. 1196. In the Government’s view, the reason for rejecting the employment contract is given quite decidedly by the complainant. It was indeed mandatory, according to the CLA, to offer the employment contract to 14 per cent of the postal carriers. The new postal distribution companies chose to offer the employment contracts to postal carriers who had been employed by them already for a time. They could also have chosen for the new carriers (50 to 80 per cent yearly turnover). The new CLA provides for such and the first adjustment of 10 per cent employment contracts was realized on 31 December 2011.
23. 1197. The Government has decided to actively respond to the deadlock that was created after the termination of the CLA by the trade unions. There was a risk that the new postal companies would not be able to meet the 100 per cent employment contracts on 1 January 2011. That is why a “political mediator” was used, namely Mr Vreeman, who advised on the adjustment to a postal market in which the employment contract is the usual employment contract form (as in all sectors). He broke the deadlock between the companies and the trade unions, after which a new CLA was concluded. In order not to affect such a CLA, the Government decided to lift the Decree and formulated a new Decree that allowed for CLA negotiations. The adjustment path stated in the new CLA was included in the Decree at the request of the Parliament. The new Decree allows postal distribution companies about two-and-a-half years extra until 30 September 2013 to adjust to a situation in which an employment contract represents 80 per cent of the postal carriers. While the new Decree contains the obligation to enter into an employment contract with 80 per cent of the post carriers, such an obligation may be deviated from by a CLA. Therefore, there is no obligation to enter into a CLA. The Decree allows the parties room to enter into agreements. If they do not enter into a CLA, the Decree prescribes the adjustment. The Decree only stipulates that agreements have to be made on the adjustment to employment contracts, it does not determine which agreement.
24. 1198. Calling upon Mr Vreeman as a “political mediator” was, in the Government’s view, an attempt to break the deadlock. A motion adopted by the Parliament was executed by appointing the “political mediator”. Mr Vreeman was given a wide and open assignment, because the positions of the parties to the negotiation were wide apart. The Government confirms that there was indeed wide political pressure on achieving socially acceptable employment terms in the postal sector. This important condition for full market opening had not been forgotten by the Parliament. In a way, the trade unions may have felt supported by the political pressure.
25. 1199. With regard to the Postal Act, an important reason for the amendment to the Act was that the timeline to have the possibility to arrange something by Order in Council had to be lengthened, also at the request of the Parliament urging for a permanent arrangement. A Decree could only exist for four years, according to article 89 of the Postal Act, and this period had to be prolonged because of the postponement. At the same time, it provided a stronger legal basis for the Order in Council in article 8. The Government indicates that the Bill is now in Parliament.
26. 1200. The Government indicates that a comparison is wrongly made by the complainant between the current situation and the case concerning the Act on Pay Adjustment in the semi-public sector (WAGGS). In the WAGGS case, the maximum room for improvement of the employment terms could be set by the Government and when that room was exceeded by parties in a new CLA, the Government could more or less block its implementation. That is not at all the case presently. Moreover, the freedom to agree by means of contract on a lower wage than the legal minimum wage is limited, but the right to collective bargaining is not infringed upon. A basic socially acceptable employment term is fixed and it should be respected when negotiating, in the same way like the minimum vacation claims in an employment agreement, equal treatment legislation, etc. Parties to a CLA in the present case are free to conclude a CLA and its implementation will not be stopped. The Government is of the view that it is rather promoting collective labour agreements, even by appointing a political mediator to come to a new CLA.
27. 1201. The Government cannot go along with the (unsubstantiated) discussion around the trade unions not being representative. FNV, CNV, and the sectorial trade union BVPP are active in the postal market and do have many members: almost 17,000 members. The rate of unionization in the postal market is thus around 40 per cent.
28. 1202. In its conclusions, the Government states that the right to free and collective bargaining is not barred or otherwise restricted in any way. On the contrary, the Government rather encouraged parties to develop themselves collective employment terms in a relatively new liberalized sector. Out of genuine concern about socially unacceptable employment terms (as a result of increased competition and decreasing volumes), the Government has encouraged the parties to make agreements themselves on the employment terms and contracts. Moreover, the Government provided for a “big stick” in the legislation and regulations in the event that the parties should fail to assume their responsibility. Fortunately, this ultimately was not a problem.

C. The Committee’s conclusions

1. 1203. The Committee notes that the present case concerns allegations that a governmental decree obliged employers in the postal sector to negotiate collectively and to conclude a collective agreement with non-representative trade unions, and imposed a specific content for collective agreements.
2. 1204. The Committee notes the background indication that TNT was the sole letter post concessionaire within the Dutch postal market until 2009. In accordance with the EU Postal Directives aimed at the full liberalization of the European postal market to be achieved by 1 January 2011, TNT’s statutory monopoly was gradually phased out, the Government aiming at liberalizing the Dutch postal market by 1 January 2008, in a first stage for addressed mail from 0 to 50 grams. However, the postal market was only effectively liberalized by the implementation of the Postal Act adopted by Parliament on 1 April 2009, almost 18 months later than originally intended. According to the WPN (the complainant) the reason for such delay was that the Parliament wanted liberalization to be contingent on a “careful structuring of the employment conditions of mail distributors”, among other factors, it was fearful that liberalization would lead to such competition in the area of labour costs that there would be a “race to the bottom” in relation to the employment conditions of mail distributors.
3. 1205. The Committee notes the indication from the complainant that the new entrants to the postal market (new postal companies) had yet to gain market share from TNT which had an established delivery network with relatively low labour costs per postal item. Therefore, in order to keep the labour costs per postal item as low as possible, the new postal companies chose to deliver post only two days a week, making use of casual workers on the basis of a contract for services to deliver post. According to the complainant, these casual workers are not financially dependent on their work at the new postal companies and include categories such as students, housewives and senior citizens willing to earn money to supplement their student grants, household income or (pre-)pensions. According to the complainant, these workers, for the most part, would not want employment contracts, precisely because of the flexibility and freedom that is inherent to the contract for services (e.g. the lack of fixed working hours and an unlimited number of days’ holiday). These workers are remunerated according to a refined standard pay system, based on which they can earn minimum wage if they deliver the post at an average speed. The Committee notes the allegation that, by contrast, TNT operates with a workforce of traditional postal workers, consisting for the most part of mail distributors who are employed on the basis of full-time employment contracts for an indefinite period of time and are financially dependent on their jobs, consequently the labour costs are considerably higher as a result of the inherent and compulsory deduction of social security and pension contributions.
4. 1206. In the complainant’s view, it was already clear back in 2007 that drastic cutbacks in TNT’s workforce would eventually be inevitable, mainly on account of the significant shrinkage of the postal market caused by the digitization process, the automation of the postal sorting process and the competition of the new postal companies that would come into play. Therefore, according to the complainant, the trade unions pressured the Government to adopt measures before the full liberalization of the postal market went ahead. As a result, the Government approached the new postal companies and their investors with the urgent request to enter into a CLA with the trade unions. The conclusion of such a CLA was allegedly set as a precondition for the full liberalization of the postal market. The trade unions’ demand for the conclusion of a CLA was a time frame to be agreed upon within which the new postal companies would also employ mail distributors on the basis of an employment contract (hereinafter: “the transitional model”).
5. 1207. The Committee notes that the new postal companies and the trade unions entered into an Agreement in Principle followed by a CLA on November 2008, in which they agreed to endeavour to employ 80 per cent of their mail distributors on the basis of an employment contract within three-and-a-half years of the liberalization of the postal market. However, according to the complainant, the CLA stipulated that the transitional model should be contingent on market developments. In the complainant’s view, the parties intended to create a flexible transitional model whereby the final percentage of 80 per cent would need to be achieved by means of a flexible transitional model created by the SEO Institute, an independent economic research institute. The transitional model was created on March 2009 and contained the following transitional percentages: 14 per cent in April 2010; 40 per cent in April 2011; 74 per cent in April 2012; and 80 per cent in October 2012. Furthermore, the complainant asserts that the percentages were to be flexible in the sense that the SEO Institute would determine each year whether the percentages had been achieved or examine the reasons why they had not.
6. 1208. The Committee notes that the new postal companies united in a new employers’ organization, the WPN, and agreed to sign the CLA on August 2009 with the trade unions. The transitional model created by the SEO Institute was incorporated in the CLA. The postal market was only liberalized after the CLA and the flexible transitional model came into being. As such, the Ministry issued a press release on March 2009 stating that the Government had decided, after taking everything into consideration, that the conditions for liberalization had been met and that the postal market could be opened in a “socially responsible manner” on 1 April 2009.
7. 1209. The Committee notes the Government’s statement that one of the preconditions for a fully open postal market was that the postal carriers would work at socially acceptable terms of employment. The postal market, which was a declining market, increases the competitive pressure and, since the sector is labour intensive, the pressure on the terms of employment was felt to be relatively stronger. The pressure was expressed by the fact that postal carriers of the new postal companies mainly worked on a commission contract, whereas most people in the country worked on an employment contract. The commission contract is the usual form for rendering services by entrepreneurs or self-employed persons. Because of its specific legal form, the commission contract is not covered by the Minimum Wage and the Minimum Holiday Allowance Act. The protection these acts intend to offer was evaded for postal carriers in this way.
8. 1210. The Committee further notes the Government’s indication that the Labour Inspectorate investigated the remuneration of postal carriers in 2007 and found that they were, on average, paid about 30 per cent below the level of the legal minimum wage. Consequently, the concerns about socially acceptable terms of employment were justifiable and the implementation of measures to protect postal carriers received broad political support in the Parliament. However, in the Government’s view, in this context, the basic principle remained that the postal distribution companies and trade unions should reach agreement on the terms of employment as they bear the primary responsibility for reaching agreement on collective terms of employment. The legislation and regulations were only intended to support the agreements reached by the parties and would serve as “the big stick” in the event of non-compliance with the provisions of the CLA. As a result, the Government encouraged the conclusion of a CLA for the new postal companies, although this was not the condition attached to a fully open market. The condition was that postal carriers would work in accordance with socially acceptable terms of employment. The initiative was left to the parties, according to the principle that social partners are primarily responsible for the forming of employment terms. While the realization of a CLA for the new postal companies was an extremely laborious process, the Government never forced the parties to come to a CLA. It did, however, assist the parties in formulating the CLA texts at their request. Finally, the new postal companies and the trade unions agreed on a CLA with a flexible adjustment model for the conversion from commission contracts to employment contracts with the final goal of 80 per cent of employment contracts.
9. 1211. With regard to the allegation concerning the lack of trade union representativeness in the postal sector, the Committee notes the allegation that the mail distributors working at the new postal companies were, for the most part, not organized in a trade union; the trade unions with which the complainant had to enter into the CLA were not actually representative of these workers. In the complainant’s view, the intervention by the Government had clearly been driven by its struggle with the lack of trade union power in the new postal market. In the complainant’s opinion, the diminishing influence of the trade unions is not a unique phenomenon limited to the postal sector, and can be expected in other sectors, it is undesirable and contrary to collective bargaining and contractual freedom if the Government would intervene in every sector where trade union power is waning. The Committee also notes the Government’s statement that it cannot go along with the discussion around the trade unions not being representative in the postal sector and the Government’s recollection that a number of trade unions are active and have many members in the sector where the rate of unionization is around 40 per cent.
10. 1212. The Committee recalls, in the first place, the principle of free and voluntary negotiation expressed in Article 4 of Convention No. 98, and emphasizes that action by the public authorities to promote and develop collective bargaining on conditions of work and employment in all sectors are fundamental principles of both Conventions Nos 98 and 154, which the Netherlands has ratified. The Committee considers that the first matter to be examined is whether the conclusion of the CLA between the new postal companies and the trade unions raise any issue with regard to the right to collective bargaining. In this regard, although it is acknowledged that the process of reaching an agreement was extremely laborious, out of legitimate concerns and pressure about socially acceptable terms of employment for postal carriers, the Committee is of the view that there is no inconsistency between the process of reaching the CLA described by both the complainant and the Government and the principles of free and voluntary negotiation of collective agreements, and therefore the autonomy of the bargaining partners, as a fundamental aspect of the right to collective bargaining. As to the substance of the agreement, the Committee does not consider itself in a position to interpret the intentions behind it.
11. 1213. The Committee notes the allegation that because neither the new postal companies nor the vast majority of their mail distributors had any interest in the transitional model incorporated in the CLA, the trade unions feared that the new postal companies would not comply sufficiently or fully with it, or would even terminate it once the full liberalization of the postal market was a reality. The complainant indicates that, consequently, the unions requested the Government to adopt a measure to prevent the termination of the CLA and indirectly enforce compliance with it. Such a measure, concretized in section 8 of the Postal Act of 2009, which provided the Government with the power to lay down rules, by means of decree, in relation to employment conditions that are to be observed if: (a) work is performed under socially unacceptable employment conditions; (b) there is a temporary problem restricted to the postal sector; and (c) in so far as the problem cannot be resolved by adapting generally applicable rules or by way of agreement between the employer concerned and representatives of workers’ organizations.
12. 1214. The Committee notes the complainant’s allegation that, although it had never been objectively proven that there were any socially unacceptable employment conditions, and despite the fact that the social partners had already reached agreement on the content of employment conditions for mail distributors at new postal companies, the Government issued a decree on January 2010 under section 8 of the Postal Act 2009, which made it compulsory for the new postal companies to employ all their mail distributors on the basis of employment contracts from the date of its entry into force. If they failed to do so, the OPTA (the government agency entrusted with supervising compliance with the Postal Act 2009) could impose very high fines. As a justification for imposing this obligation, the Government referred to the results of the investigation carried out in 2007 into the wage levels of mail distributors working at the new postal companies. The complainant, however, contends that the investigation only took place among a relatively small portion of the 30,000 mail distributors employed by the new postal companies and that it intentionally disregarded the refined standard pay system used by the new postal companies to calculate the wage level, as well as the individually determined preferences for the desired work pace which are particularly relevant for determining the wage level in relation to the number of hours worked. The Committee also notes the Government’s view that, although the new postal companies continuously contested the 2007 investigation and its results, they have yet to deliver proof that the remuneration indeed is satisfactory. The labour inspectorate did not investigate whether the new postal distribution companies complied with the requirements of the Minimum Wage Act. It investigated the remuneration level and compared it with the level of the Minimum Wage Act. The Government also recalled that the new postal companies committed to carry out an independent audit of the remuneration systems and that is yet to be done.
13. 1215. The Committee observes that the Decree made it compulsory for postal companies to only work with employees under employment contracts (Article 2), with effect from 1 January 2010 (Article 3). However, this obligation did not apply to a postal company bound by a CLA that compels new postal companies to ensure that: (a) at least 80 per cent are appointed as mail distributors no later than 42 months after the law enters into force; and (b) this percentage is reached progressively in the preceding months, whereby at least the following are appointed as mail distributors:
    • (1) 10 per cent: no later than 12 months after the law enters into force;
    • (2) 30 per cent: no later than 24 months after the law enters into force; and
    • (3) 60 per cent: no later than 36 months after the law enters into force.
14. 1216. The Committee notes the allegation that the Decree, contrary to the transitional model incorporated in the CLA agreed with the trade unions, included inflexible transitional percentages. If the new postal companies were not bound by a CLA that complied with the inflexible requirements set by the Decree, the only alternative was an immediate switch from working with mail distributors employed on the basis of a contract for services, to working with mail distributors employed on the basis of an employment contract. According to the complainant, this alternative would quickly lead to their bankruptcy because the companies would not be able to absorb the sudden and very significant associated increase in costs. As a result, the complainant states that the trade unions pressured the WPN to adapt the flexible transitional model agreed in the CLA to the new inflexible requirements laid down by the Decree.
15. 1217. The Committee notes the viewpoint from the Government according to which the Decree was rather set up in such a way that the postal companies could deviate from it via a CLA with a slower adjustment path for the conversion from commission contracts to employment contracts in the Decree, so that there was enough built-in flexibility for the parties to downsize the agreements if there was a need for it. The Decree did not oblige companies to enter into a CLA and imposed minimum requirements that may be deviated from in a CLA. Furthermore, the Government asserted that in no way have threats been expressed against the new postal companies and that the Decree contained lower demands than the CLA. The potential bankruptcy that was being paraded by the complainant could not be substantiated in any way. However, if a new postal company were to go bankrupt, it very much remains to be seen if this is because of legislation. Lastly, in the Government’s view, if a minimum level of employment terms cannot be achieved by a financially sound company, its viability should then be questioned.
16. 1218. The Committee wishes to recall that Article 4 of Convention No. 98 in no way places a duty on the Government to enforce collective bargaining, nor would it be contrary to this provision to oblige social partners, within the framework of the encouragement and promotion of the full development and utilization of collective bargaining machinery, to enter into negotiations on terms and conditions of employment. The public authorities should, however, refrain from any undue interference in the negotiation process [see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, para. 928]. With regard to the allegation that the governmental decree obliged, in practice, employers in the postal sector to negotiate collectively and to conclude a collective agreement with seemingly an imposed specific content, the Committee understands that the Decree was a mere reflection of the adjustment model for the conversion from commission contracts to employment contracts and the final goal of 80 per cent of employment contracts foreseen in the initial CLA. The Committee observes that the Decree did not oblige companies to enter into a CLA and provided enough built-in flexibility for the parties – i.e. an adjustment path of about 30 per cent below the level of the CLA – to downsize the agreements if there was a need for it. In this regard, the Committee wishes to recall that it has consistently taken the view that it is up to the legislative authority to determine the legal minimum standards for conditions of work or employment which, in its opinion, does not restrict or impede the promotion of bipartite bargaining to fix conditions of work, as foreseen in Article 4 of Convention No. 98.
17. 1219. The Committee notes that the WPN instituted interlocutory proceedings on behalf of the new postal companies against the State and applied for an order prohibiting the entry into force of the governmental decree on various grounds, including grounds that the governmental decree does not comply with any of the requirements laid down by section 8 of the Postal Act; that the governmental decree is contrary to section 610, Book 7, of the Dutch Civil Code and the underlying individual freedom of contract; that the governmental decree is contrary to the collective bargaining and contractual freedom of the WPN and its members, as guaranteed, inter alia, in various ILO Conventions ratified by the Netherlands, etc. Although the Court granted the WPN’s application in the first instance in December 2009, the ruling was overturned by the Hague Court of Appeal in a judgment of 13 April 2010 because the WPN was held not to have had any urgent interest at the time of its application. The Hague Court of Appeal, firstly, held that the transitional model with flexible transitional percentages was part of the initial CLA and, secondly, that since the flexible transitional percentages mentioned in the CLA were higher than those prescribed by the Decree, the prevailing CLA complied with the requirements of the Decree. Therefore, there was no urgent interest in judicial intervention as requested by the new postal companies. Although it considered the interpretation by legislative history of the Court of Appeal to be correct, the WPN asserts that the Government remained of the view that the transitional model agreed on between the new postal companies and the trade unions did not comply with the requirements of the governmental decree and requested OPTA to supervise compliance with the Decree with effect from autumn of 2010, in order to place the new postal companies under pressure. Such development prompted the WPN to institute an action on the merits against the State in which it requests an order declaring the Decree to be non-binding. The Committee further notes the Government’s indication that the new postal companies lost the procedure on the merits against the Decree and have recently appealed. The Committee requests the Government to keep it informed of the outcome of the procedure before the Court of Appeal.
18. 1220. The Committee notes the allegation that while the new postal companies had offered 14 per cent of their mail distributors an employment contract in accordance with the transitional model agreed with the trade unions under the CLA before 1 April 2010, only 3.2 per cent of the mail distributors accepted the offer. As a result, the trade unions were allegedly so dissatisfied about the very low percentage of mail distributors who actually accepted the offer to convert their contracts for services into employment contracts, that they decided in June 2010 to terminate the CLA with effect from 1 October 2010. The Committee notes that, according to the complainant, as a result of the termination of the CLA, there was a threat that the new postal companies would fall directly under the obligation in the Decree to employ their mail distributors on the basis of employment contracts or otherwise face fines of €450,000 per contravention three months after the termination of the CLA (with effect from 1 January 2011). The complainant tried to reach consensus with the trade unions on a new CLA, but the negotiations fell through since the trade unions continued to insist on the requirement of agreeing to fixed interim transition percentages that the new postal companies could not possibly achieve.
19. 1221. The Committee notes that, in view of the deadlock, the Government decided to temporarily suspend the effect of the Decree in order to give the new postal companies and trade unions time to agree on a new CLA. A mediator was appointed as “pathfinder”, with the mandate to issue an opinion containing a solution for the CLA dispute. The trade unions allegedly had an initial dismissive reaction to the appointment of a mediator. While the WPN indicated that it was not opposed to attempted mediation via a “pathfinder”, the sudden appointment of the mediator, without any prior consultation, was perceived with distrust as he was a former trade union leader, as well as the former leader of a political party that advocated mandatory employment contracts for the new postal companies. The complainant felt that the Government was once again exerting pressure on the CLA negotiation, this time through a unilaterally appointed “pathfinder”, who set himself the task of ensuring that employment contracts would be introduced in new postal companies, to the exclusion of all other reasonable alternatives put forward. The Committee notes the Government’s acknowledgment that calling upon a “political mediator” was an attempt to break the deadlock. It confirmed that there was indeed wide political pressure on achieving socially acceptable employment terms in the postal sector and, in a way, the trade unions may have felt supported by the political pressure.
20. 1222. The Committee recalls that various arrangements can facilitate negotiations and help promote collective bargaining, however, legislation or practices establishing machinery or procedures for arbitration or conciliation designed to facilitate bargaining between both sides of an industry should guarantee the autonomy of parties to collective bargaining. Consequently, in case of a body appointed for settlement of disputes between parties to collective bargaining, the latter should be independent, and recourse to this body should be on a voluntary basis. In the present case, the Committee observes that the Government does not contest the allegation that the mediation process was put in place without prior consultation of the parties and understands that the parties may have had a dismissive reaction to such practice. Moreover, the Committee notes the allegation that the unilateral appointment of the mediator and his professional background was perceived with distrust by the complainant. In this regard, the Committee is of the view that the mediation process should have been initiated bearing in mind the abovementioned principles, in a manner which would inspire the confidence of all parties concerned. In this regard, the Committee expects that the Government will ensure that any conciliation machinery or procedure put in place in the future will respect the abovementioned principles.
21. 1223. The Committee notes the complainant’s statement that it felt forced to go back to the bargaining table with the mediator and the trade unions and it came as no surprise that the trade unions made tough demands concerning the transitional percentages, the time frame and compliance with the transitional model. The issue of any flexibility of transitional percentages – once the parties’ starting point according to the complainant – was no longer on the agenda. The WPN entered into a new CLA, which included a transitional model with seemingly inflexible transitional percentages provided for under section 13, subsection 1, of the CLA:
    • At least 80 per cent of the mail distributors employed at every employer and/or client must be appointed on the basis of an employment contract by 30 September 2013. The interim steps are as follows:
      • – 10 per cent by 31 December 2011;
      • – 25 per cent by 30 June 2012;
      • – 40 per cent by 31 December 2012;
      • – 60 per cent by 30 June 2013;
      • – 80 per cent by 30 September 2013.
22. 1224. The Committee notes that, pursuant to the new CLA, the Government arranged for the entry into force of a newer version of the Decree. The adjustment path stated in the new CLA was included in the Decree at the request of the Parliament. The new Decree allows postal distribution companies about two-and-a-half years extra – until 30 September 2013 – to adjust to a situation in which an employment contract represents 80 per cent of the postal carriers. The Committee notes the Government’s view that the new Decree allows the parties room to enter into agreements on the obligation to enter into an employment contract with 80 per cent of postal carriers, but there is no obligation to enter into a CLA.
23. 1225. The Committee understands that the new Decree is a codification of the clauses contained in the new CLA, which include the adjustment path until 30 September 2013. Although it was confirmed that the negotiations were carried out under strong political pressure for the achievement of socially acceptable employment terms and mindful of its reservation with regard to how the conciliation process was undertaken, the Committee nevertheless observes that the clauses of the new CLA are not, as such, put into question in the complaint. The Committee must again emphasize that the codification by Decree of clauses contained in a CLA is not inconsistent with the principles of free collective bargaining, which has, as a basis, the notion of agreements that are legally binding on the parties. As a general rule, the Committee wishes to emphasize that it is not within its mandate to assess the legislative and regulatory action of the Government to establish minimum employment and contractual conditions in a particular sector, i.e. in the present case in the postal sector.
24. 1226. With regard to the legislative bill to amend section 8 of the Postal Act, the Committee notes the complainant’s view that the purpose of the amendment is to make it even simpler for the Government to intervene and force the new postal companies to only work with mail distributors who are employed on the basis of an employment contract. In view of its conclusions above, the Committee will not pursue its examination of this matter.

The Committee’s recommendations

1. 1227. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee expects that the Government will ensure that any conciliation machinery or procedure for the settlement of disputes put in place in the future will respect the principles that such bodies should be independent and perceived as such by the parties and recourse to them should be had on a voluntary basis.
   • (b) The Committee requests the Government to keep it informed of the outcome of the procedure before the Court of Appeal with regard to the action on the merits against the State in which the complainant requested an order declaring the Decree to be non-binding.