New agreement in construction industry aims to discourage early retirement

In May 1999, negotiators in the Belgian construction industry reached a framework sectoral agreement for the 1999-2000 period. The agreement covers in an original way a thorny issue on the Belgian labour market: the position of older employees and early retirement. The agreement provides for payment of a bonus for those willing to work until the age of 60, which is beyond the retirement age of 58 in the construction sector.

Early retirement schemes and their impact on the position of older employees is becoming a serious bone of contention in Belgium in view of certain labour shortages (BE9905271F). Early retirement has contributed to the very low labour market participation rates of the 50-64 age group. The two key matters of controversy are the costs of a system with so many retired people compared with the group of those active on the labour market, and the increasing shortages in certain segments of the labour market (BE9902262N).

A collective agreement signed in May 1997 introduced early retirement for construction workers at the age of 58. The agreement formulated the issue as voluntary scheme that should be discussed between employer and employee. In practice, early retirement has become the norm in the sector.

A new framework sectoral agreement for 1999-2000, signed in May 1999 by employers' representatives and trade unions, extends the period of the early retirement agreement by another two years until the end of 2000, but adds an important new provision. Construction worker who volunteer to continue to work until the age of 60 will receive an extra bonus at the time of retirement. The bonus is a lump sum, and its level depends on the type of construction worker involved, in terms of factors such as the level of training, experience and skills, which are determined by other collective agreements. About 1,000 workers will be affected.

This new element in the collective agreement is motivated primarily by the fact that the construction industry has witnessed increasing difficulties in finding employees for the vacancies available. The Flemish Employment and Placement Service (Vlaamse Dienst voor Arbeidsbemiddeling en Beroepsopleiding, VDAB) has a shortage of candidates for a number of categories of worker, such as bricklayer, plasterer, roofer and road worker. The reasons are threefold: few young people choose training in the field of construction work; qualifications for initial recruitment are too high (a minimum of six months' work experience); and working conditions and circumstances are fairly arduous. However, with this new agreement the social partners hope to reduce pressures on the labour market in the sector.