Apparent breakdown of Belgian central bargaining

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For the first time since 1960, the Belgian social partners have failed to reach an intersectoral pay agreement and have instead accepted government imposition of measures on employment and maximum pay increases. This development runs counter to all traditions of free collective bargaining and the autonomy of both sides of industry. It also appears to reinforce the trend towards sector-level bargaining, away from intersectoral or central-level bargaining, thereby widening the disparities between strong and weak sectors.

Since the beginning of January 1997, a new system of industrial relations has been evolving in Belgium. In contrast to previous years, employers and employee representatives have failed to reach an intersectoral or central-level agreement covering all firms in the private sector, and have instead had to accept a series of measures imposed on them by the Government, backdated to 1 January. The two sides of industry had disagreed fundamentally over two main areas which form part of this type of negotiation: pay and employment.

Pay

After 10 years of pay freezes, legislation adopted in 1996 provides that increases may now be agreed covering all employees, provided that they do not exceed the average increases in neighbouring and competing countries (France, Germany and the Netherlands). This is the first time in the history of Belgian industrial relations that the Government has imposed a ceiling on pay increases by law, as agreements traditionally provide for minimum rises.

The social partners were unable to agree on any of the pay increases proposed to implement this ceiling for the 1997-8 period by the experts from the Central Economic Council (Conseil Central de l'Economie/Centrale Raad voor het Bedrijfsleven), a joint body advising the Government on economic matters. The Government therefore took the decision to fix the level of increase at 6.1% over the two years, rather than the 6.5% claimed by the unions and the 5.4% offered by the employers. In practice, wage rises will vary between 0.75% and 1.25% a year, as automatic index-linked rises, social and training benefits and other elements will be included automatically in the limit. Industrial sectors will have to keep within this margin, in line with their economic performance, and this promises a number of disputes over the coming months.

Employment

The social partners could not agree on the employment-related proposals submitted to them by the national bipartite bodies, theNational Labour Council (Conseil National du Travail/Nationale Arbeidsraad) and the Central Economic Council, even though they claimed unanimously that employment remained their chief concern. In the National Labour Council, which deals with social questions, the unions failed to obtain the employers' agreement to make the demand for greater flexibility dependent on measures to encourage redistribution of available work through part-time arrangements, early retirement and career breaks.

The unions also failed to get the employers to agree to renew the special employment-related measures provided for in the previous agreement. The Government therefore took the initiative of listing those which it wanted to see. These include measures to reduce employers' social security contributions for firms introducing work redistribution schemes which lead to the recruitment of new staff (through part-time work and career breaks) and for schemes which restrict overtime, phase in early retirement, reduce working time by including training hours in normal working time, or introduce flexible working hours.

In addition, the Government imposed on the social partners an extension of existing measures to benefit unemployed workers and those difficult to reintegrate back into the labour market (the so-called "at risk" groups), on which the bipartite national institutions had been unable to agree.

Social partners' responses

The social partners could only comment on the Government's decisions, and their reactions were not unexpected. On the employers' side, the FEB/VBO ( the Belgian Federation of Employers, or Fédération des Entreprises de Belgique/Verbond van Belgische Ondernemingen), which represents all Belgian enterprises at national level, blamed the Government for having imposed pay guidelines which were too high and thus compromised the objective of preserving or increasing levels of employment. In particular, it claimed that the Government's decisions went against the need for flexibility and prevented any reduction of working time. Meanwhile, the trade unions deplored the inadequacy of the pay guidelines and the absence of any initiative to reduce working time.

But this state of affairs did not really produce a general outcry on the part of the negotiators who had been dismissed, even though the end results had been clearly exceptional. In fact, negotiations between employers and unions are going ahead at sector and company level, though within the strict guidelines, which are being closely scrutinised. Indeed, the questions that could not be settled at central level for workers across the entire country will instead be fought over again, harder, with every bargaining unit for itself.

Commentary

The inequalities between strong and weak sectors of the economy will widen all the more dramatically when the new pay rises are negotiated, as the Government has been forbidden by the European Commission to assist companies - originally just in the export sector, but now any companies - by reducing their social security contributions ( known as the "Maribel" scheme ). That decision covers sectors that are already weak, such as textiles, and makes the results of sector-level bargaining unpredictable. In such sectors, employers' representatives want to postpone the deadlines for concluding collective agreements for 1997 and 1998 by three months, whilst in healthy sectors employers want to go faster as they are impatient to benefit from the reductions in contributions which they will receive if the agreement complies with the government's measures.

The characteristic feature of Belgian industrial relations - the autonomy of the social partners and the discreet role of the state - is fading away. This year's events only confirm a trend that began in the 1980s involving the weakening of the central or intersectoral level in favour of the sector and company. The traditional link in Belgium between the central and the sectoral levels of collective bargaining among employers and workers' representatives, with the central level prevailing in outlining the broad guidelines for employment policy, has now broken down. Paradoxically, the national Government's intervention reinforces the decentralisation of negotiation and those centrifugal forces are now dominant. As confirmed by Michel Jadot, secretary-general at the Ministry of Employment and Labour, "Governments are slowly taking back the social partners' powers". (Philippe Dryon and Estelle Krzeslo, Point d'Appui Travail-Emploi-Formation, CSER, Université Libre de Bruxelles)

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