Employment conference foresees creation of 60,000 jobs
A national 'conference for employment' convened by Belgian government in September 2003 brought together representatives of the various levels of government and of the social partners, with the aim of developing a series of structural measures to boost employment. The conference resulted in agreement on a number of initiatives which, it is hoped, will create 60,000 jobs. The reactions of the various participants were mixed.
The coalition agreement concluded in July 2003 by the new 'purple' government - made up of the Flemish Liberals and Democrats (Vlaamse Liberalen en Democraten, VLD), the (French-speaking) Reform Movement (Mouvement réformateur, MR), the (French-speaking) Socialist Party (Parti Socialiste, PS) and the (Flemish-speaking) Progressive Social Alternative (Sociaal Progressief Alternatief, SP.A-Spirit) - provides for the creation of 200,000 new jobs by the end of the government's term of office in 2007 (BE0308302N). With a view to achieving this objective, the government called a national 'conference for employment' involving the various levels of government, employers' organisations and trade unions (BE0310301N).
At the start of the conference on 19 September, Jan Smets, the vice-president of the Higher Council for Employment (Hoge Raad voor de Werkgelegenheid/Conseil supérieur de l’emploi) (BE9708114N), presented an analysis of the Belgian economic situation and labour market, entitled 'All hands on deck for more work' (Alle hens aan dek voor meer werk/Mobilisation générale pour l'emploi). The report stated notably that Belgium has a structural disadvantage regarding job creation with respect to the European average. Discussions were also based on the difficulties regarding further economic growth and employment, and the search for solutions to these problems.
The conference immediately saw vigorous disputes. The VLD party leader, Rik Daems, called on a number of large Belgian organisations, including the Confederation of Christian Trade Unions (Algemeen Christelijk Vakverbond/Confédération des Syndicats Chrétiens, ACV/CSC) to take money out of foreign accounts and to invest it in the national economy. ACV/CSC, which has money for its strike fund placed abroad, felt that it was under attack and threatened to leave the conference.
At the end of October, negotiators at the employment conference announced agreement on a final text setting out measures that should create 60,000 new jobs, which was much less than the 200,000 initially proposed. The negotiators took the economic growth forecasts of the Federal Planning Bureau (Bureau fédéral du Plan/Federaal Planbureau) into account. Growth is estimated to be an average of 2.2% annually in the coming years, which should yield a net result of around 130,000 jobs. The measures in the final report of the employment conference will cost around EUR 1 billion. The largest cost is a reduction of employer's social security charges by around EUR 900 million in order to cut labour costs. The most important provisions in the deal are as follows.
- A dynamic economic policy for sustainable and strong growth. The various government bodies, employers and trade unions emphasised the importance of a forward looking and dynamic policy on research and development. One of the pillars of Belgian innovation policy is the EU objective of spending 3% of GDP on scientific research by 2010.
- More and better education and training. Employers and unions put forward proposals to mobilise all parties involved in order to increase the level of training and education. They also confirmed their commitment in the 2003-4 intersectoral agreement (BE0302302F) to achieve a general training effort of 1.9% of paybill by 2004.
- Lower labour costs. In order to keep and create jobs more easily, it is regarded as helpful to reduce indirect wage costs, in particular for specific groups of employees. The 'quasi-fiscal' burden on low wages is particularly high. Hence, existing reductions in employers' social security contributions in respect of employees on low wages will be increased. Together with a number of other (general) structural cost reductions, the total reduction in employers' contributions will be around EUR 900 million a year.
- Restructuring to achieve new opportunities. In future company restructuring exercises, attention will have to be paid to finding new employment opportunities for redundant workers. In particular, employers will be expected to conduct an active outplacement policy in restructuring.
- Reductions in charges for additional jobs in the not-for-profit sector. Employers and unions acknowledge the importance of the not-for-profit sector, whose activities meet large and growing social needs (BE0309301F), and a further reduction in employers' social security contributions is also provided for this sector. Not-for-profit employers will be 'invited' to convert this reduction into 5,000 additional jobs.
- Reinforcement of inspection services and the fight against social security fraud. In order to achieve the employment objectives, there is seen to be a need for better cooperation between the social inspection services. Increased computerisation, the use of fraud analysis and a strengthening of the social inspection services are basic requirements in this respect.
- 25,000 jobs by extending service vouchers. The expansion and reinforcement of the system of 'service vouchers' should bring many household jobs (cleaning, gardening, etc) from the 'clandestine' economy into the open. Once the system of service vouchers is fully operational, it is hoped that it should result in 25,000 extra jobs. A household can use these vouchers temporarily to employ a cleaner, gardener etc in an open and declared way . A voucher costs EUR 6, with the federal government contributing a further EUR 18.
- 12,000 jobs in the social economy. Employers and unions reconfirmed their aim of creating 12,000 extra jobs in the 'social economy' sector for target employee groups over a period of four years.
- Greater efforts to help unemployed people find work. The relevant bodies have undertaken substantially to increase the amount of coaching and support for unemployed people in their search for work. By 2006, every unemployed person must be able to obtain individual coaching and support.
Social partners' reactions
The Federal Minister of Labour, Frank Vandenbroucke (of the SP.A), referred to the agreement as an innovative plan, while both main trade union confederations, the socialist Belgian General Federation of Labour (Algemeen Belgisch Vakverbond/Fédération Générale du Travail de Belgique, ABVV/FGTB) and the Christian ACV/CSC, were rather disillusioned with the results. The main employers' organisation, the Federation of Belgian Enterprises (Verbond van Belgische Ondernemingen/Fédération des Entreprises de Belgique, VBO/FEB), was moderately positive.
Minister Vandenbroucke commended the fact that the conference had succeeded in bringing the six governments (federal, regional and community), employers and trade unions into line on a number of technical and fundamental matters. However, he stated that the results of the conference should not be overstated, representing only the start of a reform programme for the Belgian labour market: 'How many jobs will ultimately be created is not so important. What is much more important is that the way forward for socio-economic policy has been found with all parties concerned at the table together.'
VBO/FEB is moderately positive about the results, according to its director-general, Pieter Timmermans. Despite the fact that the discussions were brought to a halt for days by some matters that had nothing to do with job creation, in Mr Timmermans’ view the conference yielded many important results, notably:
- the overall reduction in employers' contributions of around EUR 900 million on an annual basis;
- encouraging employers and employees to make greater training and retraining efforts;
- the abandonment of a 'repressive' attitude towards company restructuring, with both the company and employees now encouraged to work with a possible new employer; and
- the fight against undeclared work.
Mr Timmermans nevertheless believes that the road ahead is still long. Labour costs must be further reduced, the fight against excessive 'red tape' must be continued, and the functioning of the labour market has to be improved. 'The conference has clearly marked out the field of play, but a lot of effort is still needed in each area. The conference is a hopeful start, but it is not in any way an end,' said Mr Timmermans.
Both ABVV/FGTB and ACV/CSC believe that the results of the conference are scant. Both union confederations have since been confronted with 'growing dissatisfaction' among their memberships on the policy of the 'purple' government. 'While unemployment is increasing every day, the unemployed are facing stricter controls and the measures of the employment conference fall a long way short,' according to the unions.
The national committee of ACV/CSC stated that the conference's proposals are wholly inadequate for significantly improving employment and for realising the employment ambitions of the government. The proposals are all the more unsatisfactory because the government also intends reducing employment in the public sector and in public companies at the same time. ACV/CSC also said that the measures arising from the conference can only be a first step. They have to be reinforced and widened with a new industrial policy, a policy for innovation and research, a secure future for social security, and an arrangement for employee representation in small and medium-sized enterprises (BE0102339N).
The employment conference was not an unbridled success. Even before the start of the conference, noises were coming from government circles that the figure of creating 200,000 jobs in the coalition agreement had to be put into perspective. Subjects such as union representation in small and medium-sized companies, and controls on the unemployed, weighed heavily on the negotiations. Under the impetus of Minister Vandenbroucke, employer and employee organisations put their differences of opinion aside in this respect. Outsiders note the lack of any real structural measures. The chair of ACV/CSC, Luc Cortebeek, perhaps gave the best summary at the end: 'This is not a social agreement. They are government proposals that have been discussed with employers and unions.' (Jurgen Oste and Jacques Vilrokx, TESA-VUB)