Sectoral bargaining proceeds in tense climate

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Bargaining over new sectoral collective agreements for 2005 and 2006 is well advanced in Belgium in May 2005. Agreements have been reached in many sectors, but bargaining has been difficult in some cases, with industrial action taken or threatened, following the failure of earlier talks over a national intersectoral agreement for 2005-6.

In January 2005, after long and difficult negotiations, the central social partners reached a draft intersectoral agreement covering 2005 and 2006. However, members of the Belgian General Federation of Labour (Fédération Générale du Travail de Belgique/Algemeen Belgisch Vakverbond, FGTB/ABVV) - one of the three signatory trade union confederations - later rejected the deal in a ballot. The main stumbling block was the indicative norm of 4.5% for pay increases over the two years - of which 3.3% represents indexation and 1% pay-scale increases applied only to white-collar workers and not to blue-collar workers (BE0502302F). The proposal thus could not be approved as a final agreement, and the federal government decided to apply the original draft agreement in its entirety.

In the subsequent sectoral negotiations over new collective agreements for 2005-6, the climate has been tense in some industries, reflecting the discontent among some workers over the outcome of the intersectoral agreement talks. Below we provide an overview of the situation in a number of sectors, as at May 2005. (Details of the content of agreements reached in various sectoral joint committees are available at the website of the Federal Public Service for Employment, Labour and Social Dialogue [SPF Emploi, Travail et Concertation sociale/FOD Werkgelegenheid, Arbeid en Sociaal Overleg]).

Negotiations concluded

Collective agreements or draft agreements have been signed in the following sectors, and will serve as the basis for negotiations at company level:

• the large-scale retail sector (concerning 90,000 white-collar workers - covered by joint committee 312). With a strike threat imminent, the social partners managed at the last minute to conclude an agreement that includes a pay increase of 1.25% - well above the 0.5% originally proposed by employers - plus indexation and pay-scale increases, prolongation of the early retirement system until 2007 and the maintenance of all rights to career breaks;

• the food industry (nearly 50,000 blue-collar workers - joint committee 118). Agreement was reached following the intervention of the official conciliator, who managed to get the social partners to see eye-to-eye in spite of considerable tension over pay. The new agreement provides for a pay increase of 4.4% over the two-year period and the option to negotiate an additional increase of 0.4% in companies that record strong results. In addition, a sectoral supplementary pension system will be introduced and existing systems for the end-of-career period and career breaks will be prolonged;

• international trade, logistics and transport (35,000 white-collar workers - joint committee 226). The collective agreement provides for a pay rise of 1.5% in addition to pay-scale increases and indexation. It also prolongs the option of taking early retirement at age 58 until the end of 2007 and facilitates access to career breaks;

• the wood processing and furniture industry (26,000 blue-collar workers - joint committee 126). The new agreement sets the pay increase at 4% (a level to be attained by the end of 2006) while guaranteeing greater flexibility for employers;

• the chemicals industry (blue-collar workers - joint committee 116). The collective agreement provides for application of the pay norm set out in the draft intersectoral agreement (4.5%) plus an increase of EUR 0.18 in the minimum hourly wage. It also establishes that the first day of incapacity for work will be paid as from 1 January 2006;

• non-ferrous metals (5,500 blue-collar workers - joint committee 105). The deal provides for a pay increase of 4.3% plus a variable bonus, while guaranteeing early retirement in the sector and indexation;

• metal manufacturing (150,000 blue-collar workers - joint committee 111). The sectoral agreement sets the pay increase at 0.6% from 1 January 2006, plus 3.3% indexation. On 1 September 2006, a further rise of 0.4% will be granted, but this figure will be lower or higher depending on the evolution of the index (ie whether inflation is greater or less than 3.3%). Early retirement provisions are maintained until the end of 2007. A strike notice planned by the trade unions was dropped as a result of the agreement;

• printing works, graphic arts and newspapers (10,000 blue-collar workers - joint committee 130). An increase of 0.75% (excluding indexation) is included in the draft collective agreement. Provisions on early retirement, overtime and end-of-year bonuses are maintained. The social partners will discuss the introduction of a new classification of functions;

• construction (150,000 blue-collar workers - joint committee 124). The draft agreement sets the pay increase (including indexation) at 4.5% while ensuring greater use of career breaks and increasing flexibility; and

• workers falling under the Auxiliary Joint Committee for White-Collar Employees (340,000 white-collar workers and management staff - joint committee 218), namely employees and managers in certain sectors of industry, the wholesale trade and numerous other services such as accounting, consulting, automotive repairs, press and information technologies. After five negotiating sessions, the unions (in a united front) blamed the failure of the talks on a pay offer of EUR 8 per month, a lack of improvement on career breaks and training provisions, and limited concessions on early retirement. A demonstration was held on 17 May to coincide with a 'last chance' conciliation attempt. On this occasion, a draft agreement was signed including an monthly wage increase of EUR 18, prolongation of the early retirement system until the age of 58, and the maintenance of all rights to career breaks and vocational training.

Negotiations under way

The following sectors have not yet reached a compromise allowing the signature of a sectoral collective agreement:

• metal manufacturing (65,000 white-collar workers - joint committee 209). After a conciliation meeting, the social partners were obliged to recognise the breakdown of the negotiations. The unions are disappointed over the pay offer of the Agoria employers' federation, while Agoria argues that the economic context is such that it cannot give in to the unions' demands; and

• catering, security, banking and insurance and other sectors have failed so far to come to an agreement.

Views and reactions

On the whole, the sectoral talks have concluded with agreements that took shape slowly and in a tense climate (with industrial action, demonstrations and strike notices), for example in the sectors of large-scale retail, metalworking and the food industry. Other sectors are still holding talks. Some argue that the breakdown of the intersectoral negotiations (see above) is responsible for the instability of talks at sectoral level. Others claim that FGTB/ABVV is 'taking its revenge'.

The Federation of Belgian Enterprises (Fédération des Entreprises de Belgique/Verbond van Belgische Ondernemingen, FEB/VBO) accuses the trade unions of abusing their right to strike, the result being that 'enterprises have limited possibilities for resisting'. Xavier Verboven, the general secretary of FGTB/ABVV, has stated that, as was the case in the intersectoral negotiations, 'employers are more aggressive, more intransigent. They present their own platform of demands and ignore the unions' list. They are using the argument of international competition to impose flexibility, longer working time and so on.' For Gilbert De Swert, head of research services at the Confederation of Christian Trade Unions (Confédération des Syndicats Chrétiens/Algemeen Christelijk Vakverbond, CSC/ACV), the high salaries of certain senior managers and the profits made by certain companies push workers to demand their share of the cake through the use of strikes or other action. FEB/VBO replies that profits are being made primarily in foreign subsidiaries and that, in Belgium, profits are temporary while pay increases are permanent. FEB/VBO also contends that the employers' proposed pay increases in the different sectors, denounced as too low by unions, are in fact 'very reasonable … and even too high in relation to international competition'.

Finally, employers have also proposed differentiating pay increases within each sector, based on company results. The unions respond that such a system would weaken solidarity among workers.

Commentary

The unfavourable international context and the growing competition faced by companies are pushing employers to make demands and take a more offensive stance, which is relatively new in the history of Belgian industrial relations. The trade unions find themselves on the defensive. It is not always easy for the unions to champion demands that some see as counter-productive in terms of employment, in the name of economic realism. The possibility of initiating and/or legitimising long and hard-hitting industrial action is also weakened as a result. Sectoral talks have partially demonstrated, however, that the unions will not give up the fight that easily, although in some sectors the proposed agreements have been approved by union members with little enthusiasm, or even with a sense of resignation. (Alexandre Chaidron, Labour Sciences Institute, Catholic University of Leuven (Louvain-la-Neuve))