Temporary unemployment is buffer to economic crisis

Considered as a ‘flexicurity’ measure in Belgium, the temporary unemployment of blue-collar workers has increased sharply in the first months of the global economic crisis. However, social dialogue aiming to extend the system to other occupational groups seems to have failed. This failure is being circumvented at workplace level by using all forms of existing measures to reduce working time in order to save the jobs of white-collar workers too, especially in industry.

More workers on temporary unemployment

In February 2009, some 289,381 workers were temporarily unemployed for at least one day in Belgium. This is an increase of about 70% compared with the same month in 2008. These workers are entitled to a benefit from the National Employment Office (Rijksdienst voor Arbeidsvoorziening/Office National de l’Emploi, RVA/ONEM). However, the measure only applies to blue-collar workers (arbeiders/ouvriers). These workers are temporarily unemployed when the execution of the employment contract is partly or wholly suspended on a temporary basis for various reasons, such as bad weather, strikes or other economic factors. Temporarily unemployed persons are granted unemployment benefits without having to prove that they have worked a minimum number of days. This can be an important source of support for the employer, as it relieves them of the obligation to bear all of the costs of the temporary unemployment benefit conferred.

The measure is thus regarded as a good example of ‘flexicurity’ in the labour market, combining flexibility with employment security. The workers keep their job, although they have to live temporarily on a lower income. Meanwhile, the employer saves costs in difficult times, while retaining workers and their experience – which is a cost-effective element when the economy recovers. The country’s automotive sector in particular – notably the two US car manufacturers Ford and General Motors Europe (GM Europe) – has made use of this measure (BE0812029I).

The substantial increase in temporary or economic unemployment (tijdelijke werkloosheid/chômage technique) is being interpreted as a strong indicator of how hard the global economic crisis has hit Belgium. These rising figures suggest that there will be a high increase in general unemployment in the coming months.

Failed social dialogue attempt to extend system

From the start of the economic crisis, employer organisations – especially from industry – launched a proposal to extend the system of temporary unemployment to specific types of white-collar workers at least in the difficult year of 2009. The employers recommended this strategy as part of a range of measures to ease the impact of the crisis. As one of their arguments, they pointed out that, in general, white-collar workers in production sites have to be retained, while their subordinate blue-collar workers are being temporarily unemployed.

However, trade unions reacted reluctantly, stating that introducing such a measure would mean a considerable loss of income for these white-collar workers; the unions declared that a possible compromise should be linked to the long-discussed issue of harmonising the employment status of blue-collar and white-collar workers (BE0003307F). The trade unions also highlighted the possible costs for the unemployment benefit system and pointed instead to other measures that are already in place to reduce working time collectively (BE0302302F).

At the beginning of April 2009, the social dialogue on the introduction of temporary unemployment for white-collar workers collapsed. The trade unions withdrew after being handed an ultimatum by the employers leaving them the choice between temporary unemployment and thousands of jobs being lost. Employer organisations stated that the talks had been undermined from the outset by the trade union demand to only accept this extension of temporary unemployment in exchange for harmonising the status of white-collar and blue-collar workers. The case will now be referred back to the federal government; Prime Minister Herman Van Rompuy may launch fresh negotiations with government involvement or appoint a mediator.

Alternative options being implemented

At company level, alternatives to temporary unemployment are being used. Almost every day, cases are mentioned in the news where some form of organised working time reduction is being put in place to save jobs. Interestingly, the system of time credit (tijdskrediet/credit-temps) seems to be widely applied in this regard. This system is not intended to structurally shorten the working week, but aims to improve opportunities for combining work and family life. Nevertheless, since February, time credits have been introduced in many companies to collectively shorten the working hours of white-collar workers in order to save on labour costs while maintaining employment.

Meanwhile, the Flemish government has come to the rescue of companies by introducing a ‘bridging premium’ for staff working shorter hours on a temporary basis. In addition to their part-time wages, they receive supplementary income of between €95 and €345 a month. In just two weeks, applications for 1,400 employees had already been submitted, highlighting the success of the measure. This provision is similar to some federal arrangements, which were still in place since the mid 1990s, but were up until recently only exceptionally used.

Guy Van Gyes, Higher Institute of Labour Studies (HIVA), Catholic University of Leuven (KUL)

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