Confusion reigns over working time reduction
An experiment carried out recently by Uniroyal, the tyre firm, highlights the uncertainties involved in Belgian company agreements on the reduction of working time. After a two-week strike, the workers agreed in June 1998 to give up the 32-hour week, paid as 35 hours, introduced at the beginning of the year, for a 35-hour week still paid as 35. This situation reveals the lack of clarity in the legislation over the definition of full- and part-time employment status.
Uniroyal, a tyre factory in Herstal near Liège, owned by the German company Continental, is one of the small number of firms in "difficulties" in which collective agreements on the reduction of working hours were signed in 1997 in order to limit the number of redundancies (BE9802133N). These agreements are based on the Royal Decree of 24 February 1994 (the so-called Vande Lanotte plan) which gives firms in difficulty or restructuring the right to a reduction of BEF 97,000 a year in employer's social security contributions for six years in respect of each job created or maintained (BE9711123F).
Working time and production
Under its agreement, Uniroyal was able to maintain 140 posts out of the 200 which were threatened by restructuring, by going from an agreed 37.3-hour week to 32 with a 7% reduction in pay (pay thus being equivalent to that for 35 hours), starting on 1 January 1998, and through early retirement. This made the firm eligible not only for a reduction in social security contributions on the 660 remaining jobs, but also for employment assistance granted by the Walloon region, where the firm is located. This agreement to save a location threatened with closure by its parent company had been considered a model. The company's director, JM Pirnay, had also declared that the deal's implementation would require great skill on the part of the social partners.
Early in 1998, the heavy-goods vehicle tyre market picked up and Uniroyal could no longer keep pace with orders: work had to be reorganised and production increased, with new workers recruited and overtime worked.
That was when the problems started. When they changed their working hours system on 1 January, Uniroyal workers received redundancy forms from the National Office for Employment (Office national de l'Emploi/Rijksdienst voor Arbeidsvoorziening, ONEm/RVA), the state employment agency which determines entitlement to unemployment benefit. However, they were immediately re-employed under new employment contracts specifying a 32-hour working week. It was the same for the new recruits. As far as ONEm/RVA was concerned, the workers had changed status with the new working time schedule. Legally, they were now part-time workers and, consequently, could no longer be entitled to the same social benefits as were granted for full-time work status. Their rights in matters of retirement, industrial injury insurance and social security were reduced.
This came as a surprise for everyone, employer and workers alike. As a result, in mid-February, the Confederation of Christian Trade Unions (Confédération des Syndicats Chrétiens/Algemeen Christelijk Vakverbond, CSC/ACV) revoked the agreement and, with the Belgian General Federation of Labour (Fédération Générale du Travail de Belgique/Algemeen Belgisch Vakverbond, FGTB/ABVV), gave notice of a strike, demanding either the regularisation of the workers' status or a return to full-time work.
When the stoppage was held, it lasted two weeks. It ended on 10 June, with an agreement to return to a 35-hour week, paid as 35 hours, which represented a loss for workers compared with the previous agreement, as well as a series of changes in matters of bonuses and work organisation (such as the introduction of weekend shifts). Nobody is happy, but it was the threat of closure by the parent company which forced the decision.
Nub of the problem
The Uniroyal dispute highlighted a lack of clarity in the law that no one has yet been able to resolve. The royal decree that implemented the Vande Lanotte plan defined the reduction of working time with respect to a company's working hours and not with respect to the definition of full-time work status. In other words, it should be up to the firm to say whether work is part-time or not.
On the other hand, social legislation has not been adapted to deal with the ever-increasing variation in working time arrangements. Full entitlement to benefits is still based on conventional full-time open-ended contracts. So reduced hours of work give entitlement pro rata to the hours worked.
However, in other firms that have adopted the Vande Lanotte plan and received regional aid to maintain or create jobs (such as VW- BE9709116N- Cockerill-Sambre and Yvens-Decroupet), the question has not arisen. For union representatives in those companies, full-time status goes without saying and must be preserved despite the silence of the legal texts on the matter. It is this point that the FGTB/ABVV has made to the Socialist parties, which advocate the four-day week as a model (BE9711123F). However, the latter have chosen to leave the problem unresolved in order not to commit themselves in future political negotiations. On the other hand, the employers continue to state their preference for more flexible forms of part-time working, with the backing of the Social-Christian and Liberal parties.
The uncertainties revealed by the Uniroyal example will no doubt eventually force the legislator to adapt the current social rules to take account of the diversity of working time situations in firms. However, there are two possible scenarios for such adaptation: either preserving the full rights attached to full-time status to avoid penalising workers in terms of pensions, unemployment benefit and industrial injury; or making these social rights flexible and proportional to hours worked. One can see that the norm of a full-time employment contract, which is the basis of the social security system, is at risk of disappearing and being replaced by the "normalisation" of atypical forms of contracts. That is probably the dominant trend in all the countries of Europe. (Philippe Dryon and Estelle Krzeslo, Point d'Appui Travail-Emploi-Formation)
Reference: "Sociologie de l'emploi", M Maruani and E Raynaud, Paris, La Découverte (1993).