Who says corporatism is dead? Dutch bank ABN Amro, which has spent much of the recent past selling and closing operations and firing employees, has now reached a “consensus” with four Dutch trade unions (FNV Bondgenoten, De Unie, Dienstenbond CNV and BBV) on what the bank is calling “a new Collective Labour Agreement.”
The CLA covers nearly 27,000 employees of the bank in the Netherlands. In return for agreeing to the introduction of performance-based pay, the trade unions have insisted the bank accept “employability” arrangements to help redundant employees find another job. They sound expensive, since the “employability process” lasts eighteen months.
There is a short preliminary phase in which employees are made redundant and afforded the option to leave of their own accord with an incentive premium equal to the statutory requirements. But in the next period of six months, the qualities of employees are assessed and a decision taken on whether they can be re-located internally. Employees can also opt to leave of their own accord with 75% of the incentive premium, or to receive six years’ compensation (i.e. a top-up to 100% of their bank salary) in a job outside the bank.
This is followed by a secondment period of twelve months with an “external mobility firm.” If employees find another job within six months at a salary that is lower than it was at the bank, they are entitled to compensation for a period of five years. For the second period of six months, compensation applies for four years. If employees have not found a job after eighteen months, they are given notice to leave the service of the bank with an incentive premium of 75%.
“The matters agreed upon in the field of employability enhance the chances of redundant employees finding another job,” says Huug Gorter, FNV Bondgenoten leader. Joop Hofland, leader of De Unie added: “The result of these negotiations represents a ground-breaking step within the financial services sector, both as regards the performance-based pay and the new employability arrangements.”
Performance-based pay will come into effect from 1 January 2005. The pay and benefits package has been brought more in line with the market by partly exchanging and partly commuting a number of income components in favour of a bonus. Based on a Personal Performance Plan (PPP), employees can earn a bonus of at most 20%. “The matters agreed upon in the field of remuneration are in keeping with the more performance-based culture the bank is aiming at, and have brought our pay and benefits package more in line with the market,” says Jan Peter Schmittmann, ABN AMRO Nederland CEO.
The CLA covers a short period, a third of it gone already: from 1 June 2004 to 31 December 2005.