Collective bargaining in Belgium

The traditional system of collective bargaining in Belgium is entirely regulated by the Law of 5 December 1968 on collective bargaining agreements and sectoral joint committees, in which the right to organise and bargain collectively is recognised and protected. Wage bargaining is highly structured through three interlinked levels. The highest level, with centralised cross-sectoral agreements, covers the entire economy. An important intermediate level covers specific sectors. In addition, company-level negotiations complement or act as a substitute for sector-level bargaining. In principle, lower-level agreements can only improve (from the employees’ perspective) what has been negotiated at a higher level.

At sectoral level, there are 100 joint committees and 65 joint subcommittees deciding on pay levels, classification schemes, working time arrangements, training, etc. Sectoral collective agreements apply to all employers and employees covered by the joint committees or subcommittees concerned. As negotiations at this level give legal content following the agreements at national cross-sectoral level, it is argued that the sector is still the most important bargaining level. It could also be considered the most important because, for many non-wage items, sectoral level is the highest level of negotiation. Every company and employee is assigned to a sectoral joint committee. This is almost automatically done when the company applies for a social security number and the employee is registered within the company for the social security system.

This traditional structure, with sectoral joint committees as the central arena for bargaining and making collective agreements, is today set within the following set of centralised instruments of collective bargaining and especially wage bargaining coordination.

Biennial social programming : At national level, pay negotiations in the private sector take place every two years outside the official bipartite organisation, and they result in national cross-sector agreements (Accord Interprofessionel/Interprofessioneel Akkoord). The bargaining group, called the Group of Ten, consists of the key representatives of the national social partners recognised as such by the Central Economic Council and National Labour Council.

Minimum wage : See below.

Automatic wage indexation : Pay and social security benefits are linked to a specific consumer price index. The link is intended to prevent the erosion of purchasing power by inflation. The system is a patchwork of sectoral-level mechanisms agreed upon freely by the members of the joint committees. They differ in terms of timing, indexation system, calculation of the moving average of the index, rounding rules, target groups and other details.

Wage norm : The state tries to balance the automatic indexing of wages and the sectoral-level bargaining with a tight law on monitoring and intervention in the wage-setting system. The forecast-weighted growth of foreign hourly labour costs (a weighted average for France, Germany and the Netherlands) acts as an upper limit (termed the ‘wage norm’) for wage negotiations at all levels (macro, sector and company). When the social partners do not implement the wage norm through a cross-sectoral agreement, the norm can be imposed by law. Otherwise, the norm is indicative.

Since the 2007–2008 financial crisis, and especially since 2010, this system has been under pressure from, on the one hand, imposition through state intervention and, on the other hand, certain innovations and particular decentralisation tendencies. The institutional framework has, however, remained intact, although in 2017 stricter wage norm legislation (Law of 29 March 2017) was introduced.

In 2010–2015, no new full cross-sectoral agreement was reached. The state intervened twice with a wage freeze (above indexation) for 2013–2014 and a temporary suspension of the wage indexation (2015–2016). The wage norm was implemented by law and thus had a greater impact. At the start of 2017, the social partners nevertheless reached, for the first time since 2010, a new cross-sectoral agreement (2017–2018) that sets out, among other things, a (biannual) wage increase of a maximum of 1.1% (above indexation).

Partly due to the central wage freezing, collective bargaining of a collective bonus system at company level (regulated by National Agreement No. 90 of the National Labour Council) expanded massively in this period. The negotiators also got more involved in discussions about industrial policy and about initiatives to stimulate active ageing.

There is large variation in negotiation levels of collective wage bargaining. Indeed, cross-sectoral level is the most important for setting the wage norm. Within the framework established at that level, lower levels are free to negotiate collective agreements on wages. The wage norm set at cross-sectoral level covers nearly all employees in Belgium (96% in 2013) (Eurofound, 2014a).

Collective wage bargaining coverage of employees

Notes: * Private sector companies with >10 employees (NACE B-S); multiple answers possible. ** Companies with >10 employees (NACE B-S, excluding O); single answer for each local unit; more than 50% of employees covered by such an agreement; online dataset codes: [EARN_SES10_01], [EARN_SES14_01], [EARN_SES18_01]; percentage of employees working in local units where more than 50% of the employees are covered under a collective pay agreement out of the total number of employees in the scope of the survey.
Source: Author’s own data.

Every two years, a national-level cross-industry agreement is concluded between social partners. This agreement includes a package of provisions on wages, working time, training, etc. Moreover, social partners conclude national collective agreements on wages and working time within the National Labour Council. Within the framework designed by social partners at national level, arrangements on these issues can also be made at sectoral level. Company level is less relevant to wages and working time issues, although some adjustments are possible.

Levels of collective bargaining, 2022

The national collective agreements concluded set a legal framework in which social partners at sectoral level are free to negotiate. In the same way, the sectoral collective agreements set out the legal framework for negotiation at company level. In other words, collective agreements concluded at one level cannot be at variance with the collective agreements concluded at a higher level.

Collective cross-sectoral bargaining rounds (in the private sector) are organised every two years. If there is no agreement between social partners, the government can impose the wage norm. At sectoral level, the bargaining rounds are more dispersed depending on cross-sectoral agreements, sectoral needs and the economic situation. Nevertheless, a biannual programme of collective bargaining is the norm and is evidenced by the difference in agreed contracts between the two years (about 1,400 in the first year and about 450 in the second year). The 1,400 includes all translations of an agreement in relation to different topics (early retirement, specific sectoral occupational benefits, sectoral training funds, etc.).

Bargaining on public sector protocols is much more dispersed and is bound by the political situation.

Wage bargaining coordination is marked by a very high level of coordination or vertical coordination from national level to company level (as demonstrated by biannual cross-sectoral programming and coordination on the wage norm). There is no particular horizontal coordination mechanism between sectors but, as the bargaining is organised especially on the trade union side by a limited number of sector federations (which are nevertheless politically split), patterns can be detected. Efforts are made to coordinate bargaining between the retail and distribution sector and the social profit (healthcare) sector, for example. In industry, bargaining in metal manufacturing is an important benchmark.

The obligatory nature of a sectoral collective agreement can be extended by royal decree. Where this is the case, the agreement will be binding for all employers covered by the bipartite structure within which the deal has been concluded, and contrary provisions cannot be made in individual employment contracts. This procedure is initiated on request by the sectoral joint committee or by an organisation represented in the committee. It is a pervasive and common practice in the Belgian collective bargaining system.

Opt-outs from collective agreements are very rare but possible. At company level, standards can only undercut minimum requirements established at sectoral level or absolute standards if the sectoral agreement provides for this type of change. Only in a few sectors do these arrangements exist, and they are only very rarely used. The key example has always been the metal industry. However, this does not mean that wage flexibility can be arranged at company level, as pay often includes more elements than only the basic wage. This ‘wage cushion’ is used in periods of economic shock to a greater or lesser extent by Belgian firms and relates to variable pay, seniority arrangements, grading of functions and other benefits (for example a company car).

However, regardless of the company deviations allowed by sectoral agreement, the interprofessional minimum wage has to be respected.

The duration of collective agreements strongly depends on their content, and each agreement contains provisions on its own validity. Social partners are free to establish (or not establish) the duration of collective agreements according to the issue, the relevance and the dynamic of negotiation at each level. The general rule is that agreements have an indefinite character, until one of the parties asks for an ‘ending’ (accompanied by a ‘warning’ period to settle the conflict).

In general, it is accepted that the obligation of social peace is an inherent part of collective agreements, and it is implicitly present in all of them. The peace clause means that the actors who signed the agreements (employers and employees) are prohibited from undertaking actions that contravene the content of the collective agreement throughout the period that it is in operation. Additionally, the peace clause involves both an information and an implementation obligation. Firstly, the contractors are obliged to inform their members about the content of the collective agreements they sign. Moreover, they have to ensure that their members comply with what has been included in the collective agreement and follow its rules.

The collective bargaining agenda differs from one sector to another. There have recently been a number of new topics in collective bargaining. These have included the development of occupational pension schemes, in addition to the rather low legal requirement for pension schemes in the private sector; experimentation with ‘innovation agreements’; and the opening up of funds for ‘sustainable work’.

These new initiatives, but also the wage freezes, have contributed to a growing but ‘controlled’ number of company agreements, in addition to – and not instead of – sectoral or national initiatives. The continued wage moderation has consolidated an ongoing trend of granting additional wage benefits at company level in stronger sectors and larger companies. A key instrument has been the framework developed by the national Collective Agreement No. 90 of 20 December 2007 concerning non-recurrent result-related bonuses. A Belgian employer may grant a benefit to their employees in the form of a non-recurrent performance-related collective bonus, but only when a predetermined objective has been achieved. A plan setting out this objective is confirmed either through a company collective agreement or through an act of accession approved by the sectoral joint committee. In a collective agreement, the target must be clearly set out, the objective concretely formulated, the monitoring methodology and target period stipulated, and the payment date agreed upon. There can be multiple objectives in a single plan. Examples of objectives include achieving specific sales or revenue growth, completing a specific project, obtaining an official quality standard certificate and reducing absenteeism. Up to a certain amount, such bonuses are exempt from income tax and carry a reduced social tax.