Frequently asked questions

The Council generally takes about six and a half months to prepare a report. This may seem a long period. However, one reason why the Council’s reports are so significant is that they have broad support among employers and employees. It is therefore vital that the Council should be able to consult the members of employers’ associations and trade unions, something for which it must set aside enough time, in practice several weeks. The Council can, however, also respond to a request within three months when time is of the essence or when the subject is less complex. In that case the Council publishes an advisory letter.

The Council has set up various committees to prepare its advisory reports. Like the Council itself, these committees are made up of employers’ representatives, trade unions’ representatives and independent experts. The committees draft the advisory reports for discussion in the full Council meeting. It takes about five to eight meetings for a committee to reach its draft report, every meeting lasting two to three hours – all in all, on average some six months. The full Council meets once a month, primarily to discuss and finalise the advisory report. These plenary meetings are open to the public – unlike the committee meetings, which are held behind closed doors.

Once the Council has received a request from the government, the Executive Committee decides which committee will be responsible for preparing the draft report. The Executive Committee is also made up of employers’ representatives, union representatives, and independent experts. The Executive Committee meets on the third Friday of every month.

It is the task of the Secretariat of the Council to produce a first draft based on the request for discussion in the first committee meeting and to produce successive drafts for subsequent meetings.

It is difficult to express the effectiveness of the Council’s advice in figures. It cannot be gauged simply by the impact on legislation and regulations, as not every report concerns a piece of proposed legislation. Often, the Council’s advice merely records its response or its views on a policy memorandum, for example. When such policies are turned into legislation, elements of the Council’s advice are often incorporated into the relevant act or regulation.

However, the effectiveness of the Council’s advice cannot be judged solely by the action the Cabinet takes based on that advice. What is also important is that the Council’s members – and their backers – engage in discussion. The added value of the Council also lies in bringing parties together and generating support for policy changes. How an advisory report contributes to generating such support can be measured by the degree to which the advice is unanimous. More than eighty percent of the Council’s advisory reports have the unanimous support of its members. In almost half the cases in which opinions are divided, the members agree on the overall principles but not on all the details. In approximately ten percent of the reports, the members disagree on the overall principles.

This is what the consultation economy is all about: its basic philosophy is that there is a need for mutual co-ordination and co-operation which arises from the following combination of facts and insights:

• In a modern market economy, social and economic policy-making is not the exclusive domain of government. Some of the instruments of socio-economic policy – in particular wage-setting – are in the hands of the social partners.
• Using these instruments involves important interdependencies: whereas e.g. tax policy will usually influence wage determination, wage policies will help to determine the outcomes of government policies in terms of employment.

hese interdependencies mean that the mutual co-ordination of policies can improve performance in various fields of social and economic policy.

No, the Cabinet is free to decide whether or not to follow the Council's advice. However, if an advisory report is unanimously supported by the full Council – representatives of both employers’ and employees’ organisations, as well as the Crown members – the message for the Cabinet is clear. According to the 1997 Framework Act Governing Advisory Bodies [Kaderwet adviescolleges], the Cabinet should respond to the Council’s advice within three months of its being issued. The agreement is that, if the Cabinet does not follow the Council’s advice, it must explain why not.

Those members of the Council appointed by the Crown are independent experts (22 in total: 11 members and 11 deputy members). They are appointed by the King at the Cabinet’s proposal, but they do not represent the government. They are not obliged to consult with the government or act in accordance with the government's instructions. Crown members include representatives of the Dutch Central Bank [Nederlandsche Bank] and the CPB Netherlands Bureau for Economic Policy Analysis [Centraal Planbureau] One of the Crown members also serves as the Chair.

The duty of the Crown members is to serve the public interest. Their role also involves seeking compromises when employers and employees are unable to reach consensus. The individuals who make up the group of Crown members are selected because they represent the most important political movements and relevant scholarly or scientific disciplines. The committees preparing the advisory reports are always chaired by a Crown member. The Crown members are not ‘employed’ by the Council, they usually work at a university. The time they spend on work for the Council or in its committees varies quite a lot per person and also varies in different periods. On average, it comes down to about four hours a week.

The Council challenges social partners and Crown members in a dialogue between the three parties to take into account the common interest in their endeavours and actions – this in particular is where the independent Crown members play an important role.

Also important is that the Council’s policy recommendations are supported by common analysis and arguments, making it possible to assess whether these recommendations serve both the public interest and the joint objective of social prosperity.

Unanimous advice clearly indicates broad support, whereas a divided opinion shows the government that support is lacking in certain sectors of society.

Yes, because when the Council deals with topics that fall outside the traditional socio-economic domain, the contribution of groups other than those directly represented within the Council can be highly relevant, with the advisory report that is produced gaining in both quality and support. Organisations that offer a particular perspective on the field concerned, or that represent a specific interest, can be brought in when an advisory report is being prepared within a committee. For example, the committee can consult with such organisations by means of a hearing, a panel discussion, written consultation, interviews, or a working visit; this is in fact done on a regular basis. Certain organisations can also become ad hoc committee members (for a specific project) and assist in the preparation of the advisory report. Another option is for organisations to become regular members of a committee, meaning that they are then basically involved in all advisory projects in the policy field concerned. The Dutch Consumers Association [Consumentenbond], for example, is a member of the Committee for Consumer Affairs, while nature conservation and environmental organisations are members of the Committee for Sustainable Development and the Committee for Spatial Planning and Accessibility.

As soon as an advisory report is ready for publishing, the Council informs the media and the general public. Depending upon the assumed impact of the report, the press is invited for a conference with the committee chair and the Council’s President. A third form of the promotion of a new report is the handing over by the President to the minister and to the Lower Chamber.

Occasionally, the Council will organise a conference or seminar on the subject at hand, or seek to publish an article about the report in a relevant magazine.

Approximately 20 persons (full-time) are responsible for preparing and writing the advisory reports. They execute all the tasks and activities that need to be done from start to finish of an advisory project. That includes: keeping in contact with government departments from which advisory questions can be expected, analytic and research efforts relevant to particular advisory projects, drawing up papers for discussion in committee meetings, writing draft and final advisory reports, preparing presentations for press meetings and discussions with Parliament and writing articles in newspapers or magazines upon publication.

No, the Council is not a government body. It is financed from levies paid by all businesses in the Netherlands to the Chambers of Commerce. This method of financing is based on the idea that businesses are in fact a partnership between employers and employees. The Council’s autonomy is enshrined in the Social and Economic Council Act [Wet op de Sociaal-Economische Raad]. The Act states that the Council is responsible not only for ensuring the smooth functioning of commerce and industry but also for promoting public interests.

The Council does not provide any funding. It does, however, subsidise the costs of a number of institutions, such as:

• the Labour Foundation [Stichting van de Arbeid];
• provincial advisory and consultation bodies; and
• the Foundation for Annual Reporting [Stichting voor de Jaarverslaggeving].

The Labour Foundation receives 75 percent of its funding from the Council and the rest from national employers’ federations and trade union confederations. The provincial advisory and consultation bodies receive from the Council, up to a maximum of EUR 49.000 per body, per annum. Seven-twelfths of the budget of the Foundation for Annual Reporting is subsidised by the Council. Together, these subsidies account for 10 percent of the Council’s expenses.

No, the Cabinet is not obliged to ask the Council’s advice on all important social and economic matters. This obligation was repealed in 1995, but there has been no fall in the number of requests received by the Council.

If the Cabinet does not ask the Council for its advice on a matter that the latter regards as important, the Council may decide to issue an advisory report at its own initiative. As a rule, it will only do so if it believes that its advice will have the unanimous backing of all its members. Approximately 17 percent of the Council's advisory reports are issued of its own accord. Generally, these are reports that deal with matters of international policy.

The Upper and Lower Chambers of Parliament have been permitted to ask the Council’s advice since 1 January 1997. The first request for advice – which came from the Lower Chamber of Parliament – was about inadequate old-age pension entitlement and dates from December 1999. The Council issued its report in May 2000. In June 2002, the Upper Chamber asked the Council for its advice on the Bussemaker-Van Dijke bill, which concerned working hours. The Council’s report was issued in October 2002. The most recent advisory report requested by Parliament (Lower Chamber) is about market regulation (2010).

Trade unions and employers’ organisations in the Netherlands use consultation as a tool for achieving consensus on the objectives of social and economic policy and the means used to attain those objectives.

The two sides of industry consult at various levels. At the company level, the elected works council consults with company management. At the industry level, the trade unions and employers’ associations consult on collective employment terms. And at national level, the two sides engage in consultations in the Social and Economic Council and the Labour Foundation.

The overwhelming majority of employers – about 90 percent – are members of an employers’ association. That is largely because membership of such an association offers employers clear advantages.

Approximately 25 percent of employees (1.8 million people) are members of a trade union. It is not always clear what employees have to gain by joining a trade union. After all, non-members and members alike enjoy the benefits of the union’s work, for example, coverage under a collective agreement. Nevertheless, trade unions have strong support in the Netherlands. Surveys have shown that the majority of all employees have a positive opinion of the trade unions.

A collective agreement is a binding agreement between employers and trade unions in which they lay down the employment terms of employees in a certain sector of industry or company. A collective agreement is valid for no more than two years.

Initially, only employers that are members of a party to the collective agreement need apply the agreement in their companies. All their employees, whether or not they are union members, must be covered by the agreement. The Minister of Social Affairs and Employment can, however, declare a collective agreement binding on an entire industry. In that case, the collective agreement covers all employers and employees in that industry, even those employers – and their employees – that were not involved in negotiating the agreement. Declaring a collective agreement binding on an industry prevents employers from competing on employment terms. More than 84 percent of employees are covered by a collective agreement.

No, there are variations on the consultation economy in other countries as well. For example, collective agreements are common in many other countries, and you will also find bodies similar to the Social and Economic Council, both within and outside the European Union. These countries also realise how important it is for labour, management and the government to work together. The composition of such bodies and their duties may differ from the Dutch model, however. For example, in some countries, the government is also a member of the social and economic council.

The Dutch Social and Economic Council has co-founded an association of social and economic councils and similar institutions around the world. The purpose of the association is to encourage dialogue between its members and to promote the establishment of social and economic councils or similar bodies in other countries. The association has more than forty members in Europe, Africa, Asia and Latin America. See: www.aicesis.org

At the European level, moreover, the European Union has established the European Economic and Social Committee (EESC). See:eesc.europa.eu