Belgium: Latest working life developments – Q3 2017
Social and economic reforms (including extending the system of flexijobs, pension reforms and the reintroduction of workers’ probation period), a strike at Volvo, and problems at Ryanair are the main topics of interest in this article. This country update reports on the latest developments in working life in Belgium in the third quarter of 2017.
The General Federation of Belgian Labour (ABVV-FGTB), the Confederation of Christian Trade Unions (ACV-CSC) and the General Confederation of Liberal Trade Unions of Belgium (ACLVB-CGSLB) filed a court case in September 2017 against the government for introducing the flexijob system in the catering sector. This system allows people, who work for at least 80% of their statutory working time in flexijobs, to work additional hours. People in flexijobs are not obliged to pay taxes on these hours and the employer only pays 25% of the normal cost of social benefits. The unions believe the system is unjust because it pays too little to social benefits and it discriminates against other workers in the sector who have a regular contract. Approximately 28,000 people are thought to have flexijobs in Belgium.
However, the Constitutional Court of Belgium did not agree with the unions and ruled that the new law is not detrimental to fair working conditions, fair remuneration or social benefits. Philippe De Backer, Secretary of State for Social Fraud, welcomed the verdict of the court. Mr De Backer denied the unions’ claim that the new system creates precarious labour and added that a total of €15 million in social benefits are now being collected, which would previously have been lost to undeclared work.
Plans are now underway to expand the system to other sectors, such as bakers, butchers, shops and hairdressers and, from January 2018, pensioners will also be allowed to earn extra money as flexiworkers.
Discussions on pension reforms
Debates on pension reforms were held in August 2017 following several measures the government had announced to try to cut pension costs. One of those measures is a change in the way pensions will be calculated if workers aged 50 and above lose their job. Previously, their pension would be calculated on the basis of their final salary. However, starting from 2019, the calculation will be based on the statutory minimum wage. The government hopes this measure will increase the difference between working and non-working people and encourage older employees to remain active. However, one significant objection is that women will bear the brunt of this new measure, because they are more likely to stay at home to take care of children and are also more active than men in precarious sectors. According to the Federal Planning Bureau, female retirees are, on average, inactive for 37% of their careers.
Professor Frank Vandenbroucke, former Minister of Social Affairs and Pensions, is a prominent critic of the new measure, accusing the government of incoherent decision-making, and criticising the continuing confusion over the reforms. He supports the notion of a strict reactivation policy for the unemployed, but points out the unfairness of the measure towards people facing involuntary unemployment. Trade unions are also displeased and disagree with the government’s statement that increasing employees’ pensions would be too expensive.
Daniel Bacquelaine, Federal Minister for Pensions, is now proposing a pension based on points, to be introduced in 2025. This will mean that the duration of a person’s career, not their age, will be the most important factor in determining when someone can retire. Mr Bacquelaine will propose the draft to the government by the end of 2017 so that it can start to be implemented by the end of this legislature.
Bid to reintroduce probation period
In mid-June 2017, the social partners drafted a proposal to reintroduce the trial period for new employees, which they termed probation period light. The probation period had been abolished in 2013 when the termination periods for white-collar and blue-collar workers were equalised. The probation period had made it possible for employers to dismiss a new employee at hardly any cost in the first six months of employment, whereas the abolition of the probation period made it more expensive to dismiss new employees. However, members of both ACV-CSC and ABVV-FGTB disapproved of the draft because they thought the employers and government had not done enough.
At the end of July, the government introduced the final version of the reform. Under this, in the first three months of a fixed contract, employers are obliged to provide only a one-week notice period instead of two if they wish to dismiss an employee. In exchange, young low-skilled school leavers will become less expensive to employ by a reduction in gross minimum wages.
Strike at Volvo Ghent
At the beginning of September 2017, production workers at the Volvo facility in Ghent went on strike, protesting about an increase in workload, continuing austerity measures and the non-renewal of contracts for 250 temporary agency employees.
Plans for the production of the new XC40 model in the facility, as well as stopping the production of the older XC60, have led to significant changes and an increase in pressure on the workforce. Management proposed several measures to reduce workload, which the workers rejected. After four days the strike ended, even though only 42% of the employees accepted the new agreement. The agreement states that:
- 80 employees will remain employed and 60 previously dismissed temporary employees will be rehired;
- 130 employees with 3 consecutive temporary contracts will receive permanent contracts;
- there will be additional remuneration for weekend work;
- there will be a reduction in the speed of the production line.
The case is unusual as strikes at the facility are rare; the previous strike dates back to the 1990s.
Ryanair flight cancellations
Throughout the summer, Ryanair announced they were cancelling a number of flights. According to the airline, this was caused by problems with the holiday rotas for pilots and cabin crew, with the company trying to solve this by encouraging pilots to exchange part of their holiday for a bonus. Other sources claim the inadequate working conditions are an important part of the problem, with pilots forced to work as self-employed personnel under inferior conditions to those at other airlines. This has led to a high turnover in pilots, with the Irish Air Line Pilots’ Association (IALPA) saying that more than 700 pilots have recently switched to other companies.
In early September 2017, the Court of Justice of the European Union (CJEU) ruled against the practice of Ryanair basing its employment contracts in Ireland. It said that employees working for the company in Belgium should fall under the jurisdiction of Belgian labour law (PDF), which will improve their conditions, as Belgian labour law provisions are often more generous than those in Ireland. The verdict of the CJEU now has to be confirmed by the Belgian courts. Ryanair employees in other countries can now also take action in their regional courts basing their case on the CJEU verdict. Ryanair has announced it will contest the verdict.
The reform of the pension system has led to continuing discussions and protests, and probably will continue to do so. Trade unions and left wing political parties say that a significant number (possibly one in five) of pensioners and the unemployed will face negative consequences because of the changes, and risk losing up to €100 each month. It will especially affect those who started their career early and will therefore retire at a younger age. The Federal Pension Service said the cost of introducing the new points-based system could amount to €38 million. Minister of Consumer Affairs, Kris Peeters, plans to file a case with the Commercial Court against Ryanair because of a lack of information and support for passengers affected by the flight cancellations. If the court finds Ryanair to be guilty, the company can be penalised for similar incidents in the future.