The State of decent work: 7 mechanisms that contribute to unfairness

The Inspectorate SZW can see a growing downside to the booming labour market. The number of complaints and reports about unfair work has grown by a third in recent years. There is a large group of workers working flexible hours, who have low incomes and perform physically demanding work.

The large international labour potential and international competition mean wage developments are under continuous pressure, certainly in sectors with low-skilled, labour-intensive work. Many (flexible) forms of work and contracts have emerged on the Dutch labour market. The Inspectorate SZW is encountering more and more situations in which it is difficult to determine whether the actual working relationship corresponds to the contractual employment relationship. This, for example, applies to pseudo self-employment, fictitious employment contracts and forms of outsourcing.

The Inspectorate is also faced with the ease by which companies can be formed and terminated. After they have appeared on the radar of the Inspectorate, companies rapidly proceed to an expedited liquidation to avoid the fine, only to reappear under a different name.

Digitalisation brings many benefits. It serves the increasing need for convenience services. The platform economy is growing. The choice and clicking process is electronic and virtual, whereas the implementation in terms of logistics, order picking or delivery is real and physical, with all the associated risks for the workers involved. Distribution centres often require evening or night work, which is proven to be unhealthy. This often involves people working on flexible contracts or forms of independence that are difficult to identify. Fair pay and working hours are difficult to determine.

Developments in the labour market lead to an accumulation of employment risks and social and economic risks. This particularly applies to a group of more than 10% of all working people (eight to nine hundred thousand people). They are employees who perform low-paid work on flexible contracts or self-employed people with businesses that are financially vulnerable (making the self-employed person vulnerable in the process). Due to their uncertain position, there is a greater dependency towards employers and clients in these groups and therefore an increased risk of underpayment, excessively long working days and, in serious cases, labour exploitation.

Moreover, this group is more likely to perform physically demanding work and is more often exposed to hazardous substances. In addition, they are at greater risk of becoming incapacitated for work or having to rely on social assistance or unemployment benefits, certainly so in the event of an economic downturn.

In the coming years, the Inspectorate will be doubling her efforts on the subject of decent work. Yet the clear message from the practice of the inspections is that more enforcement alone does not suffice. The Inspectorate can see a grey area emerging between what is legally permitted and what is desirable. This undermines the decent working conditions of workers. It leads to unfair competition between companies and causes the norm to shift.

Important questions are: How do we keep the changing labour market decent? How do we ensure that all employees benefit from economic prosperity and that companies do not feel compelled to act unfairly? Involvement and commitment is needed from everyone engaged in the labour market, including knowledge institutions, industries, employers and employee organisations, companies and consumers. It requires an integrated approach to make honest work in the Netherlands the standard and to share our views on the subject.

By issuing statements on the various parts of its area of activity, the Inspectorate SZW gives substance to the reflective function of its labour inspection task. By doing this, the Inspectorate SZW follows the example of other inspectorates and the advice of the Scientific Council for Government Policy, that previously stated: ‘Reflective supervision identifies, puts items on the agenda, shares its unique knowledge and provides active feedback’. More than two years ago, the Inspectorate SZW drew up its first State of decent work.

Click here to view the summary of the 2019 report on the State of decent work - Risks at the bottom of the labour market and the corresponding Infographic State of decent work 2019 - Risks at the bottom of the labour market.