New Dutch Collective Labor Agreement for the Horeca is a missed opportunity

06-04-2022

Recently, my attention was drawn to news of a new collective labor agreement for the catering industry. The parties involved, Koninklijke Horeca Nederland and the trade unions FNV and CNV, expressed their satisfaction with the result.

Is that satisfaction justified?

Let us first identify a framework within which possible statements can be made about the new agreement. First of all, the acknowledgment that a collective labor agreement aims in any case to have a dual effect. On the one hand the "intra-effect", on the other hand the " inter-effect". The intra-effect is the effect on competition within the sector. A collective labor agreement effectively eliminates or limits competition on the basis of employment conditions between entrepreneurs in the sector. The inter-effect is the effect on competition with other sectors. As catering industry you want to be able to offer competitive employment conditions compared to other sectors.

With the wage agreements made, 3.4% in 2022 and a further 2% in 2023, a very moderate wage development is anticipated. In view of the consequences of the pandemic for the sector, this is not incomprehensible, but perhaps based on the wrong reasoning. This wage increase does not even compensate for the expected inflation for the coming years. How should the sector compete with sectors that offer considerably better primary working conditions? As a result of the pandemic, entire years of potential personnel have not started working in the sector and a significant number of employees have left the sector and are not coming back. The “war for talent” will be fierce in the next two years. This collective labor agreement offers little perspective.

Then the intra-perspective. In theory, there will be a rule where surplus time on task will be compensated with time off. This will prove to be just theory. In fact, the collective labor agreements create a base-line. After all, the law prohibits to do less, but of course the individual entrepreneur may do more than what has been agreed in the collective labor agreement. Future-oriented entrepreneurs simply pay in line with market conditions or even above that to attract good people. They will also come up with modern, employee-oriented, tailor-made solutions to connect employees to the organization. If you see the commitment and time for time agreements in the new collective labor agreement, then that is simply a missed opportunity. Employees are still seen as a means of production and not as a partner. Human resources instead of human capital .

A collective labor agreement is often an outcome at a specific moment. In this case 2022. Solutions are often found in a collective labor agreement for problems prior to that moment. In this case the consequences of the pandemic and something identified as image problems. What you might also expect from a collective labor agreement is a vision of the future of the sector. A collective labor agreement should therefore help to find a solution for the current issues and at the same time provide a glimpse into the future. From the latter perspective, this Collective Labor Agreement has little to offer.

If that conclusion is correct, both negotiating partners can blame themselves for it. In two years' time, the expected problems will certainly not be less. How could it have been arranged? A wage agreement based on inflation correction plus a real wage increase would be a start. More room for customized agreements regarding deployment planning with a better balance between employer and employee interests .

Mid to long term the sector is facing a restructuring/ shake out. It could well be that 20% of the current establishment on the supply side inhibit the remaining 80% of the business to be succesfull. Labor productivity in the hospitality industry is considered to be too low. The turnover/margin per employee must increase. Allow room for experiments and innovative concepts.