New Flemish employment agreement concluded

In January 2005, the Flemish social partners and regional government signed a new employment agreement for 2005-6, which contains a number of measures aimed at getting low-skilled young people and long-term unemployed people into work and keeping older workers in jobs. However, a controversy subsequently broke out about cuts in government funding for the promotion of career breaks.

Since the early 1990s, the Flemish social partners and regional government have concluded their own regional 'employment agreements' (BE0305302F and BE0209303F) on stimulating or adapting the labour market. On 20 January 2005, they signed a new employment agreement (werkgelegenheidsakkoord) for 2005-6. The deal was reached with little difficulty - in contrast to the breakdown of national bargaining between trade unions and employers' organisations over a new 2005-6 intersectoral agreement BE0502302F)

Main points

The Flemish government has set aside EUR 24 million for implementation of the employment agreement over 2005 and 2006. The main goals of the accord are first, to get low-skilled young people and long-term unemployed people into work and, second, to keep older workers in jobs by improving conditions. To reach these goals, the agreement contains the following five concrete measures, in line with the Flemish government's limited jurisdiction in employment matters.

1. The number of work experience jobs in the 'social' sector for long-term unemployed people will be increased: a further 200 such jobs will be created, giving the low-skilled long-term unemployed the chance to gain 12 months' work experience with a contract and wages based on standards set through collective bargaining. An additional 1,250 jobs will also be created in the so-called 'insertion economy' (ie companies or organisations that are subsidised because of their social goals, including through temporary compensation for the efficiency loss caused by employing workers from the target groups).

2. With plans for a further 1,000 work experience jobs for part-time trainees, the government aims to provide all young people in part-time vocational training with guaranteed alternating work experience.

3. As an incentive for older workers made redundant owing to restructuring to stay in the workforce, they will be eligible for a 'bonus'- under certain conditions and during a limited period - if they accept a new job. The measure will grant a bonus of EUR 150 a month for a period of 12 months. In the longer term, this is expected to take the form of a tax advantage (ie a fixed reduction in personal income tax). To be eligible, redundant workers have to be aged 50 or over and have at least 25 years' service. They must also find the new job through an outplacement/employment agency. The restructuring in question also has to be officially recognised by the government.

4. To absorb waiting lists for training schemes for occupations marked by so-called bottleneck vacancies (ie jobs for which qualified staff are hard to find and which consequently go unfilled for long periods), another 1,000 training opportunities will be organised yearly with the help of sectoral organisations. In addition, both training institutions and the Flemish Employment and Vocational Training Agency (Vlaamse Dienst voor Arbeidsbemiddeling en Beroepsopleiding, VDAB) will receive a bonus for providing training that fills a bottleneck job, which they can use to buy new equipment, for example. To speed up the hiring of job-seekers completing such training, an 'entry training' system will be introduced. This will offer a bonus to employers that hire such jobseekers shortly after they complete the training. The entry training arrangement has to be converted into an open-ended employment contract once the training is completed.

5. The creation of a system of recognition of workers' acquired competences will be speeded up. The system will create professional competence 'titles' enabling those lacking the appropriate diploma to prove that they are capable of doing a certain job.

Views and reactions

Government, employers and trade unions were all fairly enthusiastic about what they considered a solid agreement. However, they were unable to agree on the issue of 'encouragement bonuses' for workers who wish to interrupt their career under a 'time-credit' scheme. This was a measure laid down in previous Flemish employment agreements (BE0202305N) that turned out to be so popular that the budget for it was surpassed by more than EUR 6 million in 2004. The Flemish government therefore wanted to limit eligibility for the bonus. The trade unions argued that they did not want a career break to become more difficult, let alone financially adverse for workers. The Flemish Employers' Federation (Vlaams Economisch Verbond, VOKA) considers the encouragement bonus to be superfluous. An additional round of negotiation was planned to settle this issue and in the end the Flemish government refused to give in to trade unions' demand to revise the planned budget cuts affecting the encouragement bonus.

To try to get the government to change its position, the trade unions circulated a petition. At mid-March 2005, they handed over 50,000 signatures to the government in support of the encouragement bonus. The Flemish government refused to budge, however, arguing that there was no margin in the budget for a full encouragement bonus system. The trade unions were not satisfied with this answer, considering this a broken promise, and considered launching an active campaign. So far, however, the government has stuck to its plan of limiting the scope of the encouragement bonus.

Commentary

In contrast with the difficulties experienced in the national wage bargaining round, the Flemish employment agreement was reached quite easily. The reasons are clear: it is a different type of agreement altogether, more of a joint statement on regional employment policy. Raising employment levels is a priority for all three parties. Difficult issues such as labour costs or flexibility are not part of this kind of employment pact. In this respect, it is based on more of a social dialogue than bipartite negotiation. Although the state intervenes to a considerable extent in collective bargaining in Belgium, in this type of agreement the government (ie the Flemish Ministry of Employment) plays an even more central role. The aftermath of the agreement shows that when the government takes a firm stance, it is difficult for the social partners (especially trade unions) to change the policies resulting from the agreement. (Yves De Weerdt and Guy Van Gyes, HIVA-KU Leuven)