Agreement gives equal status to blue- and white-collar workers

In 1993, the Belgian Constitutional Court ruled that the employment status of blue-collar and white-collar workers was discriminatory, due to discrepancies in working conditions and entitlements. Ever since, the social partners have worked towards achieving parity between these two kinds of worker. In 2011, a cut-off date for concluding an agreement was set for 8 July 2013. Under the guidance of the government, the national social partners finally concluded an agreement on 5 July 2013.

Background

The term ‘blue-collar worker’ was introduced at the very beginning of the 20th century to describe manual workers. Two decades later, the term ‘white-collar worker’ appeared, describing employees who were engaged in work requiring predominantly mental, rather than physical, effort. During the last 20 years, establishing equality between these two statuses has been key to Belgian industrial relations. In recent years, technological developments and the evolution of job functions have ‘blurred’ the distinction between blue- and white-collar workers that had previously been clearly defined.

On 8 July 1993, the Belgian Constitutional Court notified the social partners and the government that the distinction between the two statuses was not based on objective and reasonable criteria. The contracts of blue- and white-collar workers were very different, in terms of wages received, sickness leave allowed or notice periods given. (This issue was partly highlighted in the Brink’s case (BE1012011I).) The court ruled that legislation was needed to remove these discriminations. The table summarises the differences in status between blue- and white-collar workers.

Working conditions of blue- and white-collar workers

 

Blue-collar workers

White-collar workers

Wages

Usually paid an hourly rate twice a month.

Usually paid an hourly or flat rate once a month.

Temporary unemployment

May be made temporarily unemployed, for economic or technical reasons. In this case, the employer should pay the employee €2 per day, which the employee receives in addition to unemployment benefits (the amount of which is defined by sectoral agreements). If the employer is insolvent, this can be paid by the welfare fund. Sectoral agreements may fix the length of the unemployment for economic reasons, for instance.

May be made temporarily unemployed for economic reasons or for reasons approved by the National Labour Office (ONEM/RVA). In this case, the employer should pay the employee €2 per day, which the employee receives in addition to unemployment benefits (the amount of which is defined by sectoral agreements). This amount can be paid by the welfare fund in the case of the employer’s insolvency.

Trial period

Maximum 14 days. The trial period can finish prematurely, for serious reasons, during the first seven days only. Between the seventh and the 14th days, the trial period can come to an end immediately without notice or compensation.

Between six and 12 months. The trial period can end only after seven days of sickness leave have been taken. If the trial period ends during the first month of work or later, the notice period required is seven days.

Holiday bonus

Paid by the National Office of Annual Vacation (ONVA/RJV).

Paid by the employer. Possibility of double holiday bonus.

Notice periods

Notice periods for blue-collar workers are fixed at the joint committee level. There are differences between sectors. The law of 3 July 1978 (art. 65/2) defines the notice period: less than six months of employment = 28 days; between six months and five years = 40 days; between five and 10 years = 48 days; between 10 and 15 years = 64 days; between 15 and 20 years = 97 days; more than 20 years = 129 days.

The notice period is calculated as follows: under a certain level of wage, the minimum notice period is three months per five years of seniority. For higher wages, older contracts are based on agreement between the parties involved while newer ones are fixed by law.

The notice period begins on the first Monday after receipt of the official notification.

The notice period begins on the first day of the month after receipt of the official notification.

Unfair dismissal

Under the law on work contracts (art. 63), the employer has to justify the reason for the layoff. If unfair dismissal is proved, a fixed sum will be paid in compensation.

Under the principle of breach common law, the employee has to prove his or her innocence in the case of unfair dismissal. Compensation depends on the level of the breach.

Sickness leave

The first day of sickness (or inability to work) is not paid if the period of sickness leave is fewer than 14 days. Some sectors have already abolished this system.

The first day of sickness (or inability to work) is not paid if the period of sickness leave is fewer than 14 days. However, this only applies to white-collar workers who are on trial periods, on fixed-term contracts or employed for a temporary, well-defined job for fewer than three months.

Wages are paid at the usual rate for the first seven days of absence.

Wages are paid at the usual rate for the first 30 days.

Employer and social security contributions

The employer’s contribution is fixed at the sectoral level. The percentage is usually 38.38% of 108% of the employee’s gross wage (the excess 8% accounts for holiday bonus). Contribution to social security is 13.07% of 108% of the gross wage.

The employer’s contribution is usually 32.38% of the employee’s gross wage. Contribution to social security is 13.07% of the gross wage.

Position of the social partners

Debate over equality between the two workers’ statuses has intensified in recent years. However, the issue was temporarily put on hold to focus on the cross-sectoral agreements of 2011–2012 and 2013–2014. If no agreement had been reached by the cut-off date of 8 July 2013, blue-collar workers would be allowed to claim the same working conditions as white-collar workers. A partial solution was integrated into the proposed cross-sectoral agreement of 2011–2012. However, this agreement ultimately collapsed and was only partially implemented.

The ‘Group of Ten’ are the top 10 negotiators from the federal social bargaining parties, including five representatives of the employer organisations. The organisations they represent are: the Federation of Enterprises in Belgium (FEB/VBO); the Union of Independent Entrepreneurs (UNIZO); the Union of Small Businesses (UCM); the Flemish Agricultural Organisation (Boerenbond); the Confederation of Christian Trade Unions ACV/CSC; the Belgian General Federation of Labour (ABVV/FGTB); and the Federation of Liberal Trade Unions of Belgium (ACLVB/CGSLB).

In March 2013, the group met government representatives to begin the discussion about discrimination between blue- and white-collar workers anew. Their respective positions were pretty clear.

The unions wanted to keep the benefits employees are entitled to, but also to eradicate discrimination between the two groups. They proposed keeping the more generous aspects of white-collar workers’ conditions, such as the more favourable calculation methods for notice periods.

The ACV/CSC reminded all that equality between the two working statuses cannot be financed with public money, and the ACLVB/CGSLB and the ABVV/FGTB asserted that, regardless of status, agreement would not be reached to the detriment of any particular group of workers.

In April, a demonstration lead by the Belgian Union of White-collar Staff, Technicians and Managers (SETCA/BBTK), and the National Federation of White-collar Workers (CNE/GNC) took place in Wallonia and Brussels to draw public attention to what protestors described as the ‘threat to workers’ rights’. In June, another demonstration took place in Brussels led by the Confederation of Christian Trade Unions and the Belgian General Federation of Labour.

The employers’ representatives, however, did not want to modify the way notice periods are calculated. They said they were seeking more flexibility in layoff procedures and mobility. A joint press release was issued by all the cross-sectoral employers’ associations (UNIZO, FEB/VBO, UCM, Boerenbond and the Belgian Union of Non-profit Enterprises (UNISOC)) and additional regional employers’ organisations from the separate regions of Belgium (the Flemish Network of Enterprises (VOKA), the Walloon Union of Enterprises (UWE), and Brussels Enterprises, Commerce and Industry (BECI)). The statement set out the employers’ view that giving all employees the notice period conditions that currently apply only to white-collar workers would be a huge disaster for Belgium’s competitiveness.

In early July, the unions asked the government to intervene in the negotiation process. Agreement was finally reached on 5 July after a marathon 27 hours of negotiation, and the outcome was described by the social partners as ‘historical’ and ‘balanced’.

Content of the agreement

The agreement, which is valid from 1 January 2014, includes six recommendations.

  • There should be a single dismissal procedure for all employees, with no distinction between white- and blue-collar workers being made.
  • All workers keep the rights to notice periods they have already acquired. From 2014 onwards, notice periods will be based on new rules linked to length of service and will increase gradually, from seven weeks after one year of service to fifteen weeks after five years. Each extra year of service will entitle the employee to three additional weeks of notice, up to a maximum of 62 weeks.
  • The right to outplacement for dismissed workers will be increased to encourage a more proactive approach to making sure employees stay in work. All dismissed employees with at least six years’ sevice have the right to an outplacement. Dismissed employees who receive more than six months’ salary in compensation will be required to contribute to the cost of their outplacement package.
  • An employer will be obliged to explain the reasons behind the dismissal of any employee.
  • The principle of no pay for the first day of sick leave will be abolished for all workers.
  • The social security budget for dismissal payments will be used to help employers who have higher dismissal costs. The explanation for this is rather technical. The new regulations come into force on 1 January 2014 and will be more favourable for employees who, on 31 December 2013, were classed as blue-collar. This will clearly be more costly for their employers. The government had already created a fund for blue-collar workers to compensate any who were laid off for their less favourable compensation terms. From 1 January 2014 on, this budget will no longer be needed and will instead be used to help employers who will have to pay higher compensation when dismissing a blue-collar employee. No time limit has been set on this measure, but it is envisaged that it will be used less and less as the number of workers originally employed on the former blue-collar contracts decreases.

On 27 September 2013, the Federal Government approved the proposed legislation and it is now being reviewed by the Council of State. Approval by Parliament is expected to follow but it is still possible that amendments may be made during the legislative process. However, the government is insisting that it will refuse to accept any significant changes or exceptions.

Notice periods

The agreement includes a clause that allows employers to give those on temporary contracts or in mobile workplaces a limited notice period. Although no explicit reference to any specific group of workers is made in the proposal, this exception is implicitly understood to have been created for the benefit of blue-collar workers in the construction sector. It will also apply to workers in the clothing (excluding textiles) and woodworking sectors, although only until 2018.

Between 150,000 and 200,000 workers (out of a total 1.2 million blue-collar workers) are affected by this exception. However, the Christian and Socialist white-collar trade unions, the National Employee Federation (LBC/NVK) and BBTK have warned that the exception could become the standard for workers classed as blue-collar under the current system. The employer’s organisation in the catering sector, Horeca Vlaanderen, has already claimed its right to use this exception.

Another contentious point has been the agreed length of the notice period. Employers’ organisations UNIZO and FEB/VBO have interpreted the agreed notice period as an interprofessional absolute maximum, while trade unions LBC/NVK and BBTK see it as a basic minimum with room for more favourable conditions to be established at sector or company level. The compromise accepted is that the legal notice periods are obligatory at interprofessional and sectoral levels, but it is possible to negotiate a more generous agreement for employees at company level.

All newly recruited employees now have a right to a notice period of at least two weeks. In the previous system, there was a trial period during which either the employer or the employee could break the contract without compensation being due but this is now abolished. Employers fear this will create a new barrier to recruitment, since it is likely that potential employees will now be more closely assessed before being offered work than they used to be when employers could hire and dismiss temporary employment agency workers without having to give notice or compensation.

Social partners’ reactions

All social partners agreed the final proposals, but all see areas for possible improvement.

Employers’ organisation FEB/VBO has said it is pleased that agreement has been reached between all partners. However, it has also said it is disappointed that the notice period changes have not been accepted as setting a maximum level of compensation, and may be extended at company level.

UNIZO, representing independent entrepreneurs, has said it is relieved that the agreement removes any legal insecurity, especially for the compulsory measures on re-employment during the period of notice. On the other hand, it is concerned about the higher compensation for dismissal which it believes will lead higher wage costs for labour-intensive small- and medium-sized enterprises.

The liberal trade union ACLVB has said it is content with the solidarity mechanisms and the fact that an employer will be obliged to explain the reasons behind the dismissal of an employee.

ACV and ABVV have said they are pleased with the abolition of the less favourable blue-collar status but regret the reductions in notice periods currently enjoyed by white-collar workers in relation to years of service.

Commentary

After years of delay the social partners, with help from the government, have reached an agreement on equality between all groups of workers just a matter of days before the ultimate deadline, after which all employment conditions would have defaulted to those for the more generous white-collar worker status. The agreement is a compromise that manages to acknowledge some part of each party’s interests.

Michel Ajzen, UCL and Caroline Vermandere, HIVA KU Leuven

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