Experimental reduction of working time at Interbrew

The first experiment in Belgium to reduce working time with compensation for loss of pay, following recent legislation to this effect, has taken place at the Interbrew brewing group. The initiative, agreed in April 1997, is intended to preserve employment and put an end to the lengthy negotiation of a company social plan in this enterprise based in the Brussels region.

In November 1996, the brewing group Interbrew, the still-expanding leader in the market, announced the ending of bottling activities at its Belle Vue Brewery in Molenbeek, an industrial district of Brussels. It meant the loss of 103 jobs out of 167 in the company's bottling section. Since then, management had been negotiating a company plan with the unions to avoid redundancies, and an original solution was eventually found and approved in a company referendum on 18 April 1997. This solution is based on the terms of a legislative measure that had been ratified on 13 March 1997, called the Vandelanotte order after the Flemish Socialist minister: it allows companies facing difficulties or restructuring to preserve jobs through a reduction of working time linked to the reduction of social security contributions over two years.

The Interbrew agreement provides for a reduction of working hours from 37 to 32 a week, with a limited loss of earnings. As a result, 15 jobs will be preserved and the employer, as required by law, will compensate the employees concerned for the loss of pay by means of the reduction in contributions. There will be no redundancies but instead some early retirements at age 50 and various other measures will take place. The agreement is valid for two years, after which it will be reviewed.

This agreement did not make the headlines, although it is at the heart of the current debate on employment. Belle Vue is the first company to take advantage of the new legislation with quite favourable results for the employees.

In fact, choosing the reduction of working time as a means for preserving jobs and promoting employment sharply divides employers and trade unions and, on the joint national bodies, the employers' and employees' representatives have expressed very revealing opinions.

For employers, such a system will increase problems for enterprises already facing difficulties, as it leads to the reduction of working time with compulsory compensation for loss of earnings. They fear the ratchet effect of such a measure adding that "it would give a competitive edge to enterprises in difficulty over healthy ones". Experiments should be reversible because, although the reduction of social security contributions is limited to two years, reductions in working time might be permanent.

Workers' representatives are rather more favourable, but they would like to obtain a legally guaranteed minimum for loss of pay, as collective agreements give insufficient guarantees on these points. They also have concerns over the forfeit of social security revenue.

This is still a rather unusual experiment, but it opens up the debate on the relatively taboo subject of reduction of working time with compensation for loss of pay.

Sources

Opinion of the CCE, 1997/266 CCR10

Actualités Sociales 608, CED Samson, 14 March 1997