Changeover from career breaks to time creditsproves complex

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On 1 January 2002, a system of 'time credits' will be introduced in the Belgian private sector, partially replacing the old system of career breaks. This is a pet subject of the Minister of Labour, Laurette Onkelinx, that was adopted by the social partners in the 2001-2 intersectoral agreement and put into practice by a February 2001 national collective agreement. The partial transition from the old to the new system is leading to confusion and uncertainty, however - a situation which employers find unacceptable.

The Minister of Labour, Laurette Onkelinx, has been working on modernising the organisation of work for a long time (BE0005312F). In accordance with the European employment strategy, she invariably expresses two objectives in this respect: increasing the level of employment (especially among women and those aged over 50); and better coordination between paid work and private and family life (termed 'quality of life'). In order to achieve all this, the working time issue has to be tackled. The use of some schemes, such as early retirement, has to be reduced, while that of others, such as the four-day working week, has to be generalised. Moreover, according to Ms Onkelinx the introduction of a system of 'time credits'- a right to take longer-term leave or reduce working hours - will give employees more opportunity for self-determination. The employers and trade unions partially agree with the Minister and have agreed partially to replace the current system of career breaks with a time credits scheme. However, revisions to the technically complicated regulations in this area are causing considerable confusion and uncertainty.

Current system of career breaks

The current system of career breaks was introduced in 1985 under the 'Recovery Act'. As a rule, the employer has to take on an unemployed person in the place of every employee who takes a career break. The employee has to request the career break three months in advance, although without having to give reasons. There is a maximum quota for the number of people on a career break at any one time in a company. In small companies, the possibilities for career breaks are also limited.

In the general system for the private sector, a career break may be taken for a minimum of three months and a maximum of five years. The monthly career break allowance paid by the state is low, at around EUR 300. The amount increases, however, according to the number of dependent children the employee has. In the special case of parental leave, the amount is almost double. Furthermore, the regions may also grant an incentive premium above the basic allowance.

Overall, there are three areas where the various types of career break that exist in practice differ from one another:

  • the degree of the break. The term 'career break' covers both full career breaks and working time reductions. Allowances are also paid for working time reductions of one fifth, one quarter, one third or one half of full-time hours. The rules for a career break or working time reduction at the end of an employee's career also differ slightly;
  • the reason for the break. In the general career break system, the employee does not give any reason for the request. Over time, other career break systems have emerged in parallel (sometimes called 'thematic leave'), which have different allowances and durations. They are (a) leave for palliative care of a family member, (b) leave for medical assistance for a family member, and (c) parental leave; and'
  • the sector of employment. Different agreements apply to the public and private sectors. Although the basic rules are the same, small differences play a role in practice. For example, the maximum break duration in the public sector is six years instead of five. In some subsectors a working time reduction of one 10th is also possible, for example.

Collective agreement No. 77

In the 2001-2 national intersectoral agreement (BE0101337F), employers and trade unions specified that they would conclude a collective agreement in the National Labour Council (Conseil National du Travail/Nationale Arbeidsraad, CNT/NAR) containing a series of measures aimed at achieving a better combination of work and family life. The resulting collective agreement No. 77 of 14 February 2001 ultimately dealt with three areas:

  • the right to a time credit. For a maximum total of one year over their entire career, employees may interrupt their work or reduce it to a half-time job, without breaking off the contract of employment and without loss of social security rights. This time credit may be extended to a maximum of five years by agreement at the sectoral joint committee (BE0105350F) or company level;
  • the right to a one-fifth working time reduction. During their career, for a maximum period of five years, each employee also has the right to reduce their working hours by one fifth - in practice generally meaning a four-day working week instead of five days; and
  • the right of those aged over 50 to a reduction in working time. Older employees are entitled to reduce their working hours over an unlimited period of time, either by one fifth or one half.

In addition to this agreement, Minister Onkelinx also decided substantially to increase the allowances for people using their time credits under the new system - to around EUR 500 per month. A legal text to enable the transition from the old to the new system was urgently approved by the Senate on 19 July 2001. It will not be published in the official state journal until 15 September 2001, however. The new system is to come into force on 1 January 2002.

Commentators have expressed surprise that the new system does not involve any requirement on employers to replace employees taking time off with unemployed people. This reflect an express desire of the employers: the replacement requirement was causing them severe administrative and organisational problems. Moreover, in comparison with the former system there are now fewer intermediate levels of time off: working hour reductions of one third or one quarter are no longer allowed, only a full break, or a one half or one fifth reduction

In the meantime, quite a lot of uncertainty has prevailed over the scope of the old and new regulations. The issue is not simple. To begin with, the new regulation does not deal with thematic leave (care for a family member or parental leave), for which the rules remain unchanged. Moreover, the new regulations apply only to employees in the private sector. In the public sector (including contracted workers in this sector) the old career break system continues to apply. Furthermore, on 2002 and also afterwards, there will be a transitional situation whereby people in the private sector will fall under either the old or the new system, depending on whether the break started before or after 1 January 2002.

In a press release issued on 9 August 2001, the Belgian Federation of Enterprises (Fédération des Entreprises de Belgique/Verbond van Belgische Ondernemingen FEB/VBO) accused the Minister of Labour of deliberately delaying publication of the new legislation in the official state journal: 'the government is preventing concerned employers and employees from relying on clear standards with regard to their rights and obligations, and is also encouraging behaviour aimed at stretching the rights under the career breaks system to beyond 1 January 2002, while at the joint committee level, and with the support of the government, it was decided to abolish this system.''

Another employers criticism comes from the Flemish employers organisation (Vlaams Economisch Verbond, VEV) and relates to the payment of allowances. For career breaks, these are paid by the National Employment Office (Office National de l'Emploi/Rijksdienst voor Arbeidsvoorziening, ONEm/RVA). The administration of payment of allowances for the time credits, on the other hand, will be a task for the trade unions, as is already the case for unemployment benefit. In a press release issued on 13 August 2001, VEV accused the Minister of Labour of wanting to strengthen the financial resources of the unions. As a result of the fall in unemployment, the costs that the government reimburses to them for managing unemployment benefit has also fallen.

Commentary

When the old and the new system are placed side by side, there are only two substantial differences: the higher allowances and the abolition of the replacement requirement. These changes could certainly have been made without the expensive change of terminology to 'time credit'. Instead of improving the existing system and making it more coherent, the Minister of Labour has grafted a new system onto the old one. Employers and unions have also participated in this game. All in all, this shows little orientation towards the citizen: only by digging deeply into the fine points of administrative logic can the regulations be understood.

In the 1990s in particular, the budget for career breaks became quite large (around EUR 150 million on an annual basis). The allowances for reduced working hours (in contrast to a full career break) constitute around 60% of the whole budget. It is not clear what the effect will be of the removal of the intermediate working time reductions of one third and one quarter.

Although the time credit scheme could easily have kept the name of career break, it will probably have a wider application. A study issued in May 2001 by the ONEm/RVA comparing different forms of career break showed that parental leave was the most successful form. The study fully attributes this success to the higher allowances. (Jan De Schampheleire, VUB-TESA)

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