Observation (CEACR) - adopted 2012, published 102nd ILC session (2013)

Minimum Wage Fixing Convention, 1970 (No. 131) - Netherlands (Ratification: 1973)

Articles 1 and 2 of the Convention. Lower minimum wages for young workers. The Committee recalls its previous observation in which it noted the comments made by the Netherlands Trade Union Confederation (FNV) concerning the differentiated minimum wage levels for young workers below 23 years of age.

In its reply, the Government indicates that the lower minimum wage rates for young persons strike a balance between two objectives of government policy, namely ensuring that young persons remain in education as long as possible and do not drop out of school, and preserving and promoting employment for young persons who enter the labour market. With respect to the first objective, the Government is of the view that if the minimum wage were to be substantially higher this might encourage young persons to drop out of school and to try to find work, even though they do not yet have the necessary skills. As regards the second objective, the Government considers that an unduly high minimum wage for young workers might result in a loss of employment for this group, as wage costs would no longer match their productivity, and therefore demand for young workers would decline sharply.

While subscribing to the principle of equal remuneration for work of equal value, the Government states that, as a matter of fact, young persons are generally less productive than adults and require more supervision. Therefore, a lower rate for young persons is not unreasonable nor is it inconsistent with the principle of equal remuneration for work of equal value.

The Committee notes that the Confederation of Netherlands Industry and Employers (VNO–NCW) and the International Organisation of Employers (IOE) in a communication dated 31 August 2012 have expressed their full support for the Government’s views in this matter.

Further, the Committee notes the new observations of the FNV dated 30 August 2012 according to which there is no justification for the age discrimination in minimum wages. Recalling that one third of young people between 18 and 23 years old have an independent household, and also recalling that an 18-year old worker receives €658 while the full minimum wage is €1,446, the FNV finds the situation of young adults of 21–22 year-olds particularly distressing. With respect to the Government’s policy to reduce school drop-outs, the FNV considers that even if young persons were tempted by a higher wage, they would still be obliged to return to school in order to get a starting qualification. In relation to the impact on employment of the possible abolition of the lower minimum wages for young adult workers, the FNV indicates that there is no research substantiating the Government’s fear that youth unemployment will rise. Finally, the FNV considers that the notion that young persons are by definition less productive is outdated as young adults can be energetic and may master new skills.

While noting the different views, the Committee considers that affirming that young workers are less productive than adult workers is a generalization which may not hold true in many cases, especially for those young adult workers between 18 and 23 years of age, and which is not corroborated by objective evidence. The Committee also considers that in light of the principle of equal remuneration for work of equal value, remuneration levels should be determined on the basis of objective factors such as the quantity and quality of work performed, and not stereotypical assumptions linking low productivity with young age. The Committee accordingly requests the Government to consider the possibility of engaging broad consultations with all interested stakeholders regarding the advisability of maintaining differentiated minimum wage rates, especially for young adult workers below 23 years of age, in the light of the overriding principle of equal remuneration for work of equal value.