Bargaining begins on cross-industry agreement

Negotiations for Belgium’s next Interprofessional Agreement (IPA) for 2011–2012 began in November. The agreement, which covers all companies and workers in the country’s private sector, sets out a two-year framework programme covering issues such as potential wage increases, employees’ contributions and replacement incomes. The issues are particularly important in the context of the economic crisis, and both sides have already made their positions public.

Interprofessional Agreement

The Interprofessional Agreement (IPA), once agreed by the social partners, has to be transposed into collective agreements at the level of the National Labour Council (CNT/NAR) and of the sectoral joint committees.

A 1996 employment and competitiveness law stipulates that, within the IPA, the social partners agree on the maximum allowed margin for wage increases. This margin, calculated by the National Economic Council (CRB/CCE), cannot exceed the rise of the overall wage costs in Belgium’s neighbouring countries, France, Netherlands and Germany, which are Belgium’s main trading partners and competitors. However, the margin must include at least wage indexation (calculated on inflation) and also take into account wage-scale increases. Those two elements form the minimum rate in the pay negotiations at the sectoral level which usually follow the IPA.

The 1996 law is representative of the Post-Fordist collective bargaining practices, strongly focusing on seeking compromise between employment and competitiveness. In the debates between the social partners, however, the arguments are generally separated. Employers focus more on the price and cost (wage) competitiveness, while workers’ representatives criticise the weak link between competitiveness and job creation, and demand that wages shadow increases in the cost of living.

Social partner outlook on interprofessional negotiation round

Given the importance of what is at stake and the context of the economic crisis, it is not surprising that the social partners have already made their positions public through the media.

Employers recommend promoting economic growth

To avoid damaging competitiveness, employer representatives asked for a restriction in wage inflation or even a wage freeze. Peter Timmermans, General Manager of the Federation of Belgian Enterprises (FEB/VBO), recommends that wage indexation should be done in ways that help promote economic growth without raising the wage bill, for instance by issuing meal vouchers or ‘ecocheques’ (Trends/Tendances, 27 September 2010 (in French)). The ecocheque is a voucher which can be spent on a specific range of environmentally-friendly and sustainable consumer goods (BE0904029I).

Unions argue that workers and consumers should not ‘pay twice’ for economic crisis

In a press release (in Dutch) issued on 24 September 2010, the Belgian General Federation of Labour (FGTB/ABVV) draws attention to the harmful effect of dampening wage rises. The trade union refers to a KU Leuven study (in Dutch, 209Kb PDF) which shows that, in spite of higher wage levels, Belgium created more jobs than Germany in the 2001–2007 period, and saw employment levels in the private sector increase by 3.25% compared with 0.6% in Germany.

FGTB/ABVV also warned that wage moderation would slow internal demand rather than benefit the export market.

The General Christian Trade Union Federation (ACV/CSC), is waiting for the CRB/CCE’s report on the maximum margin but already expects very little room for negotiation bearing in mind the German wage restraint policy. However, Claude Rolin, the General Secretary of ACV/CSC, believes that the priority should be to increase the lowest wages and help young workers (L’Echo, 1 October 2010).

Commentary

In these times of economic crisis a compromise between the social partners will probably be more difficult to reach, as has already been observed during the previous IPA negotiation round for 2009–2010. Moreover, the conclusion of the previous IPA (BE0809019I) was greatly facilitated by the government’s measures of special taxation and fiscal easing. However, Yves Leterme, the Belgian Prime Minister, has already announced that, this year, the government cannot help by financing any new measures to allow for a pay rise. This time, the new IPA will depend entirely on the social partners’ ability to reach compromises.

Marie Van den Broeck, Institute for Labour Studies (IST), Catholic University of Louvain (UCL)

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