Dutch Social Affairs Minister Piet Hein Donner, employers and trade unions have reached agreement behind the scenes on limiting 'golden handshakes'. In the agreement, people with annual incomes over 75,000 euros will be able receive a maximum severance payment equivalent to one year’s salary. Minister Donner is dropping other plans to relax the rules covering dismissal.

 

                               

                 Piet Hein Donner - Minister of Social Affairs (ANP photo) 

 

In addition to limiting golden handshakes, the parties have agreed that extra money should be set aside for training or re-training employees, and also that employers should make greater efforts to bring more people into employment. 

The agreement, which has been negotiated without much public attention, appears to offer benefits to all sides. Employers will no longer have to pay enormous amounts in compensation to get rid of employees who they have employed for a long time. 

Golden handshakes can amount to as much as three annual salaries for some employees who’ve been with an employer for a long time, and – taken across the board on a national scale – cost business and industry billions. Employers argue that, because of this they are forced to keep people in jobs that they would prefer to let go. 

The agreement means that the social affairs minister can cross at least one difficult issue off his list. His attempt to relax dismissal laws in 2007 ran into resistance from the other two parties in the three-party coalition, Labour and the Christian Union. In fact, the issue almost brought the  government down. Now that severance payments have been limited, the minister can concentrate on increasing employment. There may be severe shortages of personnel on the labour market, yet there are still a great many unemployed people on benefit who are willing and able to work.