Active use of unemployment benefits - initial results and union unease

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Belgium's policy of reducing unemployment through using unemployment benefits to fund work is going well. After a careful start, it received a boost in April 1998 from the National Action Plan for employment prepared by the Belgian Government in line with the EU Employment Guidelines for 1998. New forms of activity based on service jobs are now being transposed into legislation, and the trend is towards standardisation of rules and procedures. However, this expansion raises many questions among trade unions.

Belgium policy of reducing unemployment through an active use of unemployment benefits takes two forms. The first is through "local employment agencies" (Agences locales pour l'Emploi/Plaatselijke werkgelegenheidsagentschappen, ALE s/PWA s), bodies attached to local authorities offering jobs for a few hours a week in private homes or local associations, which entitle unemployed people to earn additional sums on top of their benefits. The second is through the "Smet jobs" scheme - named after Miet Smet, the Minister of Employment and Labour - which offers part-time work in firms or associations for up to three years, with pay made up of unemployment benefits and an additional contribution from the employer. Although of different ages and origins, these two measures are gradually converging, the more so as they both correspond to "transition from passive measures to active measures" - one of the EU Employment Guidelines for 1998 adopted following the European Council Employment Summit in Luxembourg in November 1997 (EU9711168F). Belgium, along with the other EU Member States, has drawn up a National Action Plan for employment in response to the 1998 guidelines (BE9804141N), which refers to both the local employment agencies and Smet jobs scheme. The National Action Plans were examined at the June 1998 Cardiff summit (EU9806109F).

Local employment agencies employ unemployed people

There have been large numbers of legal changes in the ALE/PWA rules since the scheme's creation in the 1980s (BE9708213F).The main trend has been to oblige unemployed people to register with the local ALE/PWA after two years of unemployment and to oblige them then either to accept the jobs offered or to have their benefits cut (this was introduced in 1994). The ALE/PWA has become a local institution, headed by an official appointed by the National Employment and Placement Service (Office National de l'Emploi/Rijksdienst voor Arbeidsvoorziening, ONEm/RVA), with an administrative board on which local authorities and trade unions are represented. As time has passed, the protection of the "unemployed worker" in the ALE/PWA scheme has been improved from the point of view of work rules and industrial injuries insurance (from 1995). However, the jobs offered are not yet seen as employment: the unemployed person still has the status of being unemployed, but is allowed to top up unemployment benefit with earnings of up to BEF 7,000 a month for up to 60 hours of work.

The scheme now seems likely to move onto a new stage, as on 16 June 1998 the bipartite advisory National Labour Council (Conseil National du Travail/Nationale Arbeidsraad) gave a favourable opinion on the introduction of an open-ended work contract specific to ALE/PWA jobs, which will be different from the conventional employment contracts as defined in the Labour Contract Act of 3 July 1978.

Smet jobs to reintegrate long-term unemployed

The other aspect of the policy to "activate" unemployment benefit is the "Smet jobs" scheme (BE9707213F) - creating part-time jobs for less qualified long-term unemployed people, aimed at "meeting society's collective needs and developing service functions in companies", as the Belgian National Action Plan for employment 1998 puts it. Unlike ALE/PWA workers, those unemployed people taking up "Smet" jobs are employed for three years under a normal employment contract. Their wage is not an addition to their benefits, but paid by the employer. This pay, however, comprises the flat-rate unemployment benefit supplemented by a contribution from the employer to make up the minimum pay rate for the sector. The employer is totally exempt from social security contributions in respect of the worker concerned over the first year of employment and partially so for the following two years.

An assessment of this measure was carried out just after the Cardiff summit in June 1998. Some 2,600 jobs had been created in the first four months of 1998 and 446 applications from employers had been turned down.

However, questions have been raised about how far the needs that these jobs are supposed to meet are really new -one of the basic requirements of the scheme. In reality, it seems that there have been many demands for secretaries, HGV drivers, storekeepers' assistants, Internet operators and so on, made by lawyers' offices, doctors' surgeries and companies.

Syndicats, the weekly journal of the Belgian General Federation of Labour (Fédération Générale du Travail de Belgique/Algemeen Belgisch Vakverbond, FGTB/ABVV), has referred to the case of a firm installing parking meters and parking ticket dispensers which requested and received a "Smet job" for the loading and unloading of cash boxes. According to this same source, the Journal du Médecin, a specialised paper for doctors, had the following headline: "an opportunity for doctors: staff for BEF 10,000 a month". In Brussels, between 1 January and 7 May, 54 out of 91 applications for "Smet jobs" concerned secretarial work, described as "filling envelopes, folding documents and so on".

Under the scheme, a potential employer is required to contact the ALE/PWA. The ALE/PWA's officials then submit the application to the regional office of the ONEm/RVA which assesses whether the job is really or not a "Smet job".

The unions are worried that these low-cost jobs may compete with normal jobs. They complain of monitoring difficulties because in companies the opinion of workers - which must be attached to the employer's application - is really sought only where there is a union delegation. Furthermore, such monitoring is impossible through the ALE/PWA, as the application is not referred to the administrative council on which the unions are represented.

In a firm in the Charleroi region, the workers reportedly did not react to the recruitment of a workhand for gardening and carrying parcels, even though informed by a notice. On the other hand, faced with a refusal from the union delegation, the Kinépolis multiplex cinema group had to freeze its project for creating 340 jobs to supervise parking, clean auditoriums, sell ice-creams and project films. The unions said that the jobs were neither new, nor threatened, and that - on the contrary - they were a threat to existing jobs.

In practice, since such jobs cannot correspond to an existing job classification in the firm, unions find it difficult to check whether they will replace an existing job or not. This is the reason why, in its May 1998 journal, the textiles federation of the FGTB/ABVV asked its members to warn officials when they discover workers recruited for "Smet jobs" on the shop floor.

Furthermore, councillors in eight large towns have refused to use the "Smet jobs" offered by the Minister to recruit for public cleaning positions. Despite the low cost for the town finances, the councillors have declared that such jobs would not answer their needs, nor fit in with the type of urban policies that they want. "We want legal, open-ended employment contracts, as we want to train people who have to get to know the neighbourhoods thoroughly. If an unemployed person is brought out of the peripheral workforce for only three years, he or she cannot contract a loan to buy a home," said M Van Roye, a Brussels town councillor.

Commentary

These two methods of "activating" unemployment benefits, introduced to reintegrate long-term unemployed people, will no doubt be developed further and in particular further standardised. The ALE/PWA established in every local area, where unemployed people are identified and registered, has played an increasingly important role. Although part of the official regulations, monitoring by the trade unions has become increasingly haphazard and the decisions taken are increasingly dependent on ONEm/RVA, the body in charge of paying benefits. (Philippe Dryon and Estelle Krzeslo, Point d'Appui Travail-Emploi-Formation)

References: "Commentaire social de poche 1998-9", CED Samsom, Diegem (1998); "L'insertion par les ALE ou le mythe de Sisyphe", C Vandevelde, L'Année Sociale 1995)