Social partners conclude intersectoral agreement for 2007-2008

In December 2006, the social partners in the private sector agreed a comprehensive national intersectoral agreement for the period 2007–2008. The agreement contains an extensive range of measures in relation to recommendations for the future and new provisions regarding wages and working conditions.

After a prolonged bargaining round amounting to 23 hours, the Belgian social partners in the private sector agreed an extensive national intersectoral agreement for the period 2007–2008. The agreement, entitled ‘For an innovative economy and employment’ (Voor een innovatieve economie en werkgelegenheid (in Dutch, 110Kb PDF)/Pour une économie innovatrice et emploi (in French, 124Kb PDF)), contains a comprehensive range of measures and commitments. In January 2007, the relevant national organisations on both sides approved the agreement. This follows a two-year interlude (BE0502302F, BE0412301N, BE0302302F) and once again puts in place a national agreement, which coordinates wage bargaining and contains a list of new or improved regulations planned for the private sector.

Content of agreement

Wage bargaining standard

A crucial part of the agreement is the so-called ‘wage bargaining standard’, which acts as a guide for private sector wage bargaining rounds; the latter are due to commence in the coming months and will stipulate the pay increases for the two-year period 2007–2008 (see the Belgian contribution to the EIRO comparative study on Changes in the national collective bargaining systems since 1990). In accordance with the 1996 Law on competitiveness and employment, the social partners have to decide on a general wage standard at national level, which coordinates the wage bargaining at the main sectoral level and at company level in Belgium. If they are unable to reach agreement, the government can intervene and set the wage standard by itself. In a preparatory document (in French, 987Kb PDF) published by the Central Economic Council (Conseil Central de l’Economie/Centrale raad voor het bedrijfsleven, CCE/CRB) on this matter, a possible wage norm of 5.5% was mentioned, when comparing the wage developments in Belgium with those of neighbouring countries and taking economic forecasts for the next two years into account.

In the final agreement, the wage standard has been set at 5%, which includes the automatic indexation and other wage increases. It is hoped that the competitiveness of the Belgian economy will be strengthened through the provision of this wage increase. Although the wage standard is indicative of what may follow in the sector bargaining rounds, the agreement asks the sector negotiators to respect the norm. In this regard, the agreement invites the social partners to also integrate a ‘correction mechanism’ in their two-year agreement, if still lacking in the sector agreement. If, as a result of the agreed pay increases and following automatic indexation (BE0610049I), the actual pay increase is higher than the agreed pay increase, a bargaining procedure for correction must be provided. It is expected that many sectors will adopt a so-called ‘all-in agreement’, whereby the agreed pay increase includes automatic indexation and other increases. If the indexation is higher than expected, the other increases will be limited; therefore, the global increase will never exceed the agreed amount – for which the aforementioned 5% is the indicative norm.

The effect of the wage increases on the total labour cost of companies will be reduced even further through another measure. In accordance with a new company tax exemption of 0.25% on the gross wages that companies have to pay, the social partners hope to reach a ‘structural economy-wide’ wage correction of 0.15% of the total labour costs. However, although it is among the proposals of the new bilateral agreement, this measure has to be implemented by the government.

A final, important wage-related proposition of the agreement for sectoral bargaining is that other wage increases – in attempting to reach certain objectives of the agreement such as in relation to equal pay, the rise of the minimum wage and the abolition of age-dependent pay scales – may not have an additional effect on the total wage cost in a sector.

Other wage-related measures

Minimum wage

Since 1993, the average statutory minimum wage has remained unchanged (see the Belgian contribution to the EIRO comparative study on Statutory minimum wages in Europe). Under the new agreement, the minimum wage will be raised in two phases: increasing by €25 on 1 April 2007 and by a further €25 on 1 October 2008 (BE0610049I).

Overtime premiums

The agreement proposes that the government expands the current tax redemption on overtime premiums.

Financial participation and variable pay

The Law on employee participation (in Dutch and French, 124Kb PDF) will be evaluated; before 15 March 2007, the National Labour Council (Conseil National du Travail/Nationale Arbeidsraad, CNT/NAR) was due to present new proposals to enhance the use of these financial participation schemes, by making the current regulation in Belgium more user-friendly and attractive to participants.

Diversity and non-discrimination

In accordance with EU Directive 2000/78/EC on equal treatment in employment and occupation, the Belgian Minister of Labour has announced that the government will no longer legally extend collective agreements that contain age-related pay scales. In reaction to this announcement and also referring to the directive, the social partners request that age is no longer used as a criterion in sectoral bargaining to define a pay scale. Sector and company pay scales must be revised in this way before 2009. If these changes should have a labour cost effect – resulting in higher wages in some cases – then these wage increases have to be taken into account when the wage standard is measured or calculated in the sector. However, the Minister of Labour has been requested not to execute his aforementioned threat and to maintain the legal extension of sector collective agreements by Royal Decree.

At the same time, sectors have been asked to strengthen their non-discrimination policies and to develop instruments to encourage the employment of workers of different ethnic origin or sexual orientation, or those with a disability. In support of this aim, the CNT/NAR will expand Collective Agreement No. 38 (in French, 67Kb PDF) on non-discrimination in recruitment and selection to all parts of the employment relationship, before 30 June 2007. In addition, a new code of conduct will be developed on non-discrimination practices in job applications. A national collective agreement will also be created which acts as a legal basis for developing ‘positive actions’ at sector and company level (see also the Belgian contributions to the EIRO comparative studies on Gender equality at the workplace and on Gender mainstreaming in industrial relations).

Moreover, Collective Agreement No. 25 (in French, 64Kb Word doc) on the equal pay of women and Collective Agreement No. 26 (in French, 19Kb Word doc) on the equal pay of disabled workers will be updated. Sectors are once again urged to check job classifications on gender neutrality. Where these revisions result in a wage increase, the results should be included in the calculation of the wage standard.

Other future measures

Alcohol and drug prevention

The CNT/NAR will conclude a new agreement on policies aimed at preventing alcohol and drug abuse in enterprises. Alcohol and drug abuse are defined as an important social problem, which can cause serious difficulties at the workplace. The agreement will contain prevention measures, clear rules on the prohibition of alcohol and drugs at work, procedures to test employees for alcohol or drug use, measures to help individual workers overcome an addiction, along with regulations – all of which will define the civil liability of employers.

Unified employee status

The harmonisation of the blue-collar and white-collar worker status into one new integrated employment status has long been an issue on the agenda of politicians and social partners in Belgium (BE0003307F). Recently, this issue was addressed through the establishment of an expert commission, which issued an initial report to the CNT/NAR. The social partners have promised to examine and discuss the findings of this report in 2007, thus resuming talks on this unified employment status.

Innovation and training

Once again, those in the private sector have been asked to make training a central issue of the coming bargaining round, for example by raising the employers’ contribution to the sector training funds. Moreover, a solution has been offered in relation to the financial problems arising from the paid educational leave system (Congé-éducation payé/Betaald educatief verlof, BE0610039I).

In addition, the issue of innovation (BE0610019I) will, from now on, be systematically benchmarked by the CCE/CRB. The social partners have again stressed the importance of reaching the 3% research and development (R&D) investment target by 2010, in line with the Lisbon agenda. At the same time, the system of an ‘innovation bonus’ (BE0512304F) has been extended.

Flexibility

Small changes have been adopted in relation to flexibility with respect to working time, part-time work and those who are economically dependent workers (self-employed people who depend on a single employer for their income).

Implementation of Generation Pact

In their implementation of the Generation Pact, the social partners also reached agreement on the following issues (BE0602304F):

• time credit for older workers;

• the number of years’ service used to calculate an employee’s right to take early retirement at 58 or 60 years of age (for example, when people work part time or take a career break). Previously, people had to have worked for at least 25 years to take early retirement at 58 years of age, or for 20 years to opt for early retirement at the age of 60 years. The Generation Pact gradually extends this full-time working career to at least 38 or 35 years respectively. People who have taken a career break, who work part time, or who have experienced periods of unemployment – very often women – face more difficulties in reaching these career thresholds. Therefore, a compensation system has been developed in this regard. This system has been fine-tuned in the intersectoral agreement and is quite complex, depending on the type of career break or gap. Essentially, however, the new system will allow people to compensate for up to six years missing in the standard working career, in order to reach the career threshold necessary for taking early retirement.

• definition of ‘heavy’ occupations, which are to receive an exemption from the new rules concerning early retirement;

• organisation of the obligatory outplacement, when older workers are dismissed.

In addition, special early retirement arrangements for night workers and people with disabilities in the construction sector have been extended.

Final approval by employers and trade unions

Both the trade unions and employers consider that the agreement has its strong points and believe that it represents an honourable compromise. The Belgian Federation of Employers (Fédération des Entreprises de Belgique/Verbond van Belgische Ondernemingen, VBO/FEB) favours the new possibilities for overtime and the deal on paid educational leave. However, it warns that important steps still need to be taken in order to reverse what it considers as the restrictive Belgian labour costs and labour market inefficiencies. The Organisation for the Self-employed and Small and Medium-sized Enterprises (Unie van Zelfstandige Ondernemers, UNIZO), the largest employer organisation in the SME sector, was less enthusiastic about the agreement. It points to the increased costs being imposed on employers, along with the lack of further flexibility measures.

The increase in the minimum wage is deemed as being the most important measure of the agreement by the trade unions. Both the Confederation of Christian Trade Unions (Confédération des Syndicats Chrétiens/Algemeen Christelijk Vakverbond, CSC/ACV) and the Belgian General Federation of Labour (Fédération Générale du Travail de Belgique/Algemeen Belgisch Vakverbond, FGTB/ABVV) approved the draft proposal on 19 January 2007, while the General Confederation of Liberal Trade Unions of Belgium (Centrale Générale des Syndicats Libéraux de Belgique/Algemene Centrale der Liberale Vakbonden van België, CGSLB/ACLVB) did so a day earlier. An overwhelming majority of 92% of the CSC/ACV representatives voted in favour of the agreement. A tight majority of 55% of FGTB/ABVV representatives backed the new agreement.

Commentary

The conclusion of a new insectoral agreement for the private sector marks the outcome of a relatively successful year of dialogue among the social partners in Belgium (BE0602301N). After a number of difficult years with no intersectoral agreement and following the conflict arising over the Generation Pact (BE0510303F), relations between the trade unions and employers seem to have been revitalised. As a result, Belgium continues to be a country with a centralised and coordinated system of collective bargaining. However, not all of the reservations expressed by the social partners have been satisfied. Furthermore, government funding has yet to be secured for part of the agreement, for example in relation to tax redemptions.

Guy Van Gyes, Higher Institute for Labour Studies (HIVA), Catholic University of Leuven