Belgium: Latest working life developments – Q4 2017

Protests against the proposal to introduce a points-based pension system, concerns about digitisation and the sharing economy, and further loosening of the rules governing night work are the main topics of interest in this article. This country update reports on the latest developments in working life in Belgium in the fourth quarter of 2017.

Protests against pension reforms

On 19 December 2017, trade unions organised a large demonstration in Brussels to protest against proposed pension reforms (known as ‘the summer agreement’), which will introduce a new way of calculating pensions using points. Employees will receive points according to the level of their wages (with a guaranteed minimum for the lowest wages). When an employee retires, their points will be exchanged for a set amount of money; this amount will be calculated as a percentage of the average labour income, which can vary to accommodate demographic trends.

The main advantage of this system is that it allows easier corrections to prevent pension costs from rising too much. According to the Federal Planning Bureau, however, approximately 1 in 10 employees will lose 6% or more of their pension under the new scheme. In particular, people with shorter careers and people who started working at a later age will be more affected if the system is implemented as is currently proposed. The government aims to save approximately €265 million by 2020 with the new system.

According to the unions, the plans hollow out pension rights and some employees will risk losing up to €250–€300 a month. The unions are demanding a minimum pension of €1,500 per month and a reduction in the pension age back to 65 from of the recently introduced age of 67. They also argue that the implementation of the new system (in the long term) is unclear. It is possible that the value of a pension point could be frozen because of economic or other reasons; with rising inflation this would mean a reduction in a person’s overall pension. The unions propose that instead of saving money by cutting back on pensions, the government could try to increase efforts to combat social fraud and collect additional funds that way.

Prime Minister Charles Michel and the Minister of Pensions, Daniel Bacquelaine, have criticised the protests, claiming that the trade unions are spreading misleading information about the pension reforms. They plan to communicate more clearly about the pension reforms in the future. While employer associations agree that more clarity should be given by the prime minister, they do agree that reforms are necessary and accuse the trade unions of seeking to maintain the status quo.

Digitisation and the sharing economy

Another important topic of discussion during the fourth quarter of 2017 was the changes introduced by the government regarding digitalisation and the sharing economy. A report by the National Labour Council (CNT-NAR) (PDF) on the matter was heavily criticised by both trade unions and employer associations. Both demand a more coordinated approach to the taxation and social inspection of this new platform. For example, the government plans to introduce a system that could allow people to earn up to €500 each month free of tax or social security contributions. Social partners fear such a system could significantly increase money laundering without providing any gain for the state.

The Union of Independent Entrepreneurs (Unizo) fears that such a system could lead to abuse of the fiscal benefits by companies that mask the services they provide by making use of intermediaries, offering services at much lower prices and thus creating unfair competition. Unizo is not against the notion of increased remuneration for volunteers and a legal framework for services between friends or family. However, it sees the list provided by the government (PDF) as too vague and open for interpretation and misuse. Unizo wants payments to be made directly between the service provider and client, thus avoiding an increase in the rise of digital platforms that make the relationship between client and service provider less clear.

Loosening of rules on night work

The government announced that starting in January 2018, regulations on night work in retail companies would be less rigorous, with only one trade union active within the company having to agree. Until now, all trade unions active in the company had to agree unanimously, which many employers deemed to be too strict. The change in the rules on night work is the third such change. Until 2016, retailers were banned from letting employees work between 20:00 and 05:00. The discussion is important for Belgian e-commerce companies as they believe the Belgian regulations are too strict for them to compete with foreign retailers.

The Belgian Federation for Commerce and Services (Comeos) expects the change to help keep e-commerce activities by Belgian companies in Belgium rather than move them abroad. However, Comeos does not expect foreign companies to be attracted to Belgium as the measure only offers certainty for two years. Comeos believes that the Belgian government has waited too long to loosen the rules and thus has missed opportunities to properly develop e-commerce within Belgium. They estimate that approximately 14,500 potential jobs have been lost because of this.

Commentary

At the time of writing, no final agreement on the new pension system had been reached and the government had decided to delay its implementation until 20 February 2018 so that regional and communal governments could work out the details. Meanwhile, the European Commissioner for Employment, Social Affairs, Skills and Labour Mobility, Marianne Thyssen, has announced plans to introduce minimum labour condition regulations for employees under a ‘flexible’ contract, such as those at food delivery company Deliveroo. The plans include clearer information for employees about their pay and trial period, as well as a ban on exclusivity contracts. This would improve the situation in Belgium as well as covering some of the recent new forms of work not (yet) covered by collective agreements.

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