National intersectoral agreement received with acclaim

On 18 November 1998, the social partners in Belgium reached a national intersectoral agreement for the 1999-2000 period. Unlike attempts in previous years, they had managed to do so without the government's intervention. The signs indicate that the rank and file of both employers' and employees' organisations will now ratify the agreement. The settlement also marks a renewed sense of confidence in the Belgian model of consensus in industrial relations.

Negotiations on a new two-year intersectoral national agreement for 1999-2000 were characterised by a set of interwoven factors that at times seemed to resemble a Gordian knot. Over recent years, negotiations have had to take into consideration a statutory wage norm, which determines the maximum permitted wage increase on the basis of expected pay trends in neighbouring countries (BE9809242F). The maximum increase allowed for 1999-2000, as calculated by the experts on the Central Economic Council (Centrale Raad van het Bedrijfsleven/Conseil Central de l'Économie), may not exceed 5.9%, including consumer prices index allowances and increases in basic pay rates. A second parameter was the employers' promise to improve worker training programmes (a promise made in the wider European framework) (BE9810249F). A third point of departure was the government's commitment to reduce labour costs by a total of about BEF 18 billion. The trade unions made it clear from the outset that this money could not be distributed amongst employers unless they had made a plain commitment to increase employment. In addition, each negotiating partner had a traditional list of wishes and pet projects.

However, despite the difficult bargaining situation, on 18 November 1998 the social partners succeeded in reaching an intersectoral agreement for the 1999-2000 period. Furthermore, the agreement was reached without the government's intervention - unlike attempts in previous years. The signs indicate that the rank and file of both employers' and employees' organisations will now ratify the agreement, which marks a renewed sense of confidence in the Belgian model of consensus in industrial relations.

Dehaene, present in spirit?

Although the prime minister, Jean-Luc Dehaene, was not physically there during the negotiations, it arguably seemed at times as if he were present in spirit. According to some commentators, the social partners resorted to a favourite negotiation tactic of the prime minister when confronted by this type of complex bargaining situation: tying everything together in order to unravel the knot.

All the social partners had a somewhat ambivalent attitude towards the wage norm issue. Although the employers are in principle strongly in favour of the wage norm, they also recognise that some more affluent sectors want to be more generous in terms of pay increases. The unions recognise that their rank and file also expect greater pay increases after several years of wage restraint. On the other hand, however, there is the shared concern of both sides for the competitiveness of Belgian industry, which ultimately has a major impact on employment. The November agreement solves the issue by not fixing a wage norm across the board, but by calling for "responsibility" during sectoral negotiations, taking into account the national wage norm.

Reductions in labour costs will have to be "earned" each year by the employers. The promised BEF 18 billion is divided into two tranches of BEF 9 billion each. After the first year, an evaluation of the employers' activity in the areas of training, job creation and wage increases will take place. Following a positive evaluation, employers will receive their first tranche of the extra BEF 9 billion, though others may have to wait and improve their performance. Evaluations will be carried out by assessors from the National Labour Council (Nationale Arbeidsraad/Conseil National du Travail).

Specific issues regarding SMEs

Specific issues regarding small- and medium-sized enterprises (SME s) are generally negotiated in a separate chapter. The introduction of a 38-hour working week had been hanging like a "sword of Damocles" over the heads of these companies (BE9711123F), and a transitional reduction to a 39-hour working week during 1999 was negotiated. Once an evaluation has been carried out, further negotiations will determine exactly how further reductions could be implemented. A second bone of contention centred on union representation in SMEs. Unions have had this point on the agenda for a long time. A recent experiment in "pooled" representation in the distribution sector (BE9710219F) will be assessed on its merits for possible extension to a wider range of SMEs.

Review of occupational classification

The Minister of Employment and Equal Opportunities, Miet Smet, had been placing the more technical issue of occupational classification on the agenda for several years (BE9709115F). Equal pay for work of equal work has been one of the strongest commitments made by the government. Employers and employees promised in the new agreement to analyse the degree to which the current system of occupational classification contributes to discrimination between male and female workers. To the extent that it does, they have pledged measures to reverse the discrimination.

Another more "technical" issue concerns the "unemployment trap". Belgium has a relatively high number of low-skilled unemployed workers but at the same time a relatively large number of job openings for the low-skilled. According to employers and unions, the causes have to be found in the narrow gap between unemployment benefits and minimum wages, also taking into account fiscal policies that aggravate the situation. They have asked the government to tackle the problem in exchange for more pragmatism on the issue of the willingness to work of those receiving unemployment benefits, which is according to others the nexus of the unemployment trap problem.

Commentary

After several years of failed negotiations between the social partners (BE9702101F), they have once again reached a national instersectoral agreement. It seems to be the case that the parameters of the negotiations have shifted the debate towards more pragmatism. Pay issues are discussed in a framework of competitiveness and unemployment is not discussed purely from a "gloom and doom" perspective any longer. However, sectoral negotiations within the new intersectoral framework will have to prove that this agreement is strong enough to deliver the promises that it contains. (Peter van der Hallen, WAV)