The government should press ahead with plans to reform Dutch redundancy law but efforts should be made to spare older workers, central bank president Klaas Knot says in an interview with the Financieele Dagblad on Friday.

‘Something must be done,’ Knot told the paper, adding that it would be better to exempt older workers and make sure only the new generation build up fewer rights.

Knot’s comments come as unions, ministers and employers are due to meet to discuss a potential agreement on a string of controversial government measures. Ministers are keen to ensure employer and union support, which will make it easier to get new laws through parliament.

Golden handshakes

In particular, the government’s wish to slash redundancy pay and make it easier to sack staff are opposed by unions.

‘If you take away the redundancy rights of older workers, they will probably not be able to benefit in better times,’ Knot said. ‘I am also aware of the social safety net which redundancy law provides. I would therefore like to reach a position where we can differentiate between old and new cases.’

The government hopes to cut redundancy packages to a maximum €75,000 and reduce entitlement to unemployment benefit to two years, with one year at minimum wage level.

Unions are worried the plans will lead to large numbers of older workers losing their jobs because they will become easier and cheaper to sack. But the chances of them finding a new job are minimal, unions say.