employer representation and social dialogue in belgium

EMPLOYER REPRESENTATIONAND SOCIAL DIALOGUE IN

BELGIUM

Split, 28 & 29 September 2011

Michèle Claus

First Advisor, Social Department, FEB

1Split - 28 & 29 september 2011

I. Belgium & Croatia: some figures

II. Federation of Enterprises in Belgium (FEB)

III. Industrial relations in Belgium1. Actors

2. System

IV. Main challenges and current debates

V. Special topic: wage negotiations in 2011


3

2009 Belgium Croatia

Population 10.4 m 4.5 m

GDP per capita $37,800 $17,400

Economic growth 2% -1.4%

Unemployment rate 8.5% 17.6%

Public debt 98% 55%

Below poverty line 15.2% 17%

Government type Federal Monarchy Republic

I. Belgium & Croatia: some figures

Source: CIA World Factbook

Split - 28 & 29 september 2011

https://www.cia.gov/library/publications/the-world-factbook/flags/flagtemplate_be.html

4

GDP per capita in PPS in Europe


II. Federation of Enterprises in Belgium (FEB)

1. What is FEB?

2. History

3. Role of FEB at federal level

4. Role of FEB at European and international level

5. Structure and organisation


1. What is FEB?

Multi-sectoral employers’ organisation representing companies in Belgium, from both the industrial and services sectors

Voice of businesses in Belgium Represents more than 50 leading sectors, over

48,000 businesses (of which 41,000 SMEs) and 1,600,000 employees


2. History

1895: Central Committee of Industrial Labour 1913: Central Committee of Industry 1946: Federation of Belgian Industry 1973: Federation of Enterprises in Belgium

(FEB)


3. Role of FEB at federal level (1)

Defending business interests in dealings with government - public authorities - trade unions

Representing business federations in several institutions and bodies

Central Economic Council - National Labour Council - National Social Security Office - Consumer Affairs Council

Action strategy in-depth studies and analyses definition of a shared business viewpoint communication of this viewpoint to members and the

press 8Split - 28 & 29 september 2011

Within the National Labour Council: multi-sectoral negotiation of collective labour agreements applying to:

all companies all private-sector employees

Cooperation with the regional business federations: Flanders – Wallonia - Brussels

Contact with NGOs better understanding of each other’s views structural negotiations

3. Role of FEB at federal level (2)


4. Role of FEB at European and international level

Important role as 60% of total Belgian production is exported

Member of BusinessEurope Advocate for companies at the European institutions

(Parliament, Commission, Council) Member of international organisations

ILO - BIAC - ICC Promoting foreign trade

establishing contact between Belgian and foreign companies


5. Structure

Departments Social Affairs Department Economic Affairs Department European and International Department Legal Affairs Department Communication Department


Collective agreements Employee representation Wage policy Working conditions and labour organisation Unemployment benefits Health insurance Pensions Family benefits Annual leave Accidents at work Occupational diseases Social security contributions and benefits

Issues handled by the Social Affairs Department


III. Industrial relations in Belgium

1. Introduction: main characteristics of Belgium

2. Actors Trade unions Employers Government and social policy

3. System of industrial relations At interprofessional level At sector level At company level


1. Introduction: main characteristics of Belgium

Political structure Economy Public finances Political parties Some basic social statistics


15

Political structure


16

Six Governments National (federal) level – Federal

Government Prime Minister Yves Leterme Minister for Employment and Equal

Opportunities Joëlle Milquet

Regional Governments Flemish Government Walloon Government French Community Government German-Speaking Community Government Brussels Region Government

Federal and regional governments


17

2. Actors Trade unions

pluralism membership legal status

Employers structure membership decision-making process legal status

Government and social policy


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Blue-collar and white-collar workers Private and public sector Pluralism:

Christian (founded 1886): ACV-CSC

55% of membership

Socialist (founded 1885): ABVV-FGTB

40% of membership

Liberal (founded 1892): ACLVB-CGSLB

5% of membership

A. Trade unions


19

B. Employers: FEB

75% of the 2.5 million employees in the private sector

FEB

35 sectoral federations

48,000 companies(41,000 SMEs)

Industry: e.g. technology, chemicals, wood, food, textiles, clothing, iron, steel, and so on

Services: e.g. banking and insurance, retail, transport and energy

Construction


20

Negotiations with trade unions Bipartite: wages and working conditions Tripartite: e.g. “Solidarity Pact between

Generations” Lobbying at national level Lobbying at European level

FEB: role in social affairs


21

1) At national level Interprofessional Agreement (IPA): general framework for the

private sector (2 years) – Group of 10 Informal agreement between employers’ and employees’

organisations about wages and working conditions e.g. 2011-2012 wage moderation (indexation of wages + small

increase); Advisory committees

National Labour Council (NLC): social policy Central Economic Council (CEC): economic policy High Council for Prevention and Protection at Work:

occupational health and safety Boards of several public services (unemployment, sickness

and disease, pensions, and so on)

System of industrial relations


22

Interprofessional dialogue

Christian

socialist

liberal

FEB

President (FEB)

SMEs

agriculture

“GROUP OF 10”

Group of 10

23

Social dialogue

2) At branch level Implementation of national agreement at branch

level Conciliation in joint bodies at branch level

3) At company level Large companies (≥ 250 workers): 5% of

companies but 50% of employment Formal dialogue: +50, +100

Small and medium-sized enterprises (SMEs) : Informal dialogue: -50


24

Belgian social dialogue model

Themes of collective labour agreements: employer-employee relationship

Wages Employment contract, terms of notice for blue-collar

and white-collar workers Working time, flexibility Work/life balance: time credit, parental leave Lifelong learning Early retirement Peaceful industrial relations and more besides


25

IV. Main challenges

Wages and labour costs Job creation Ageing population Employability Peaceful industrial relations


Background to negotiations:

SWOT analysis of our socio-economical and political system


STRENGTHS

- Location- Education- Brussels, capital of Europe- Strong clusters

WEAKNESSES

- High labour costs - Rigid wage formation - Poorly functioning labour market - Public investment too low

OPPORTUNITIES

- Growth potential - Stock of significant unused labour

force - Enormous efficiency gains possible

in the public sector

THREATS

- Ageing population - Sanitation of public finance - Political and social instability


Strengths


Well-trained workers…

ForcesForces


... and clusters of different strengths

ForcesForces


Weaknesses


Belgium has a growth problem...

WeaknessesWeaknesses

32

... and is losing market share in the international context


33

We are facing higher wage costs...


34

… mainly due to a high tax burden (EUR source: IDW Köln)


35Split – 28 29 september 2011

Wage formation is very rigid


36

Structural unemployment remains high…


37

… and there is a large gap between insiders and outsiders on the labour market


38

Example: low employment rate among over-55s


39

Threats


Population ageing is fast becoming a reality

2011

ThreatsThreats

41

Opportunities


Great potential to improve our prosperity

OpportunitiesOpportunities


Keeping people at work longer to finance the ageing of the population



Slow down the growth of healthcare spending


45

Efficiency gains in health care (in % of GDP; source: OECD)


Increase the efficiency of the public authorities

Source : OECD


46

47

1. Labour costs (wage moderation)2. Ageing population (early retirement)3. Work/life balance (leave systems)4. Harmonisation of labour law for blue-collar

and white-collar workers5. Peaceful industrial relations

Current topics in collective bargaining


Common theme: the Europe 2020 strategy

Five targets: Employment: 75% of people aged 20-64 R&D/investments : 3% of the EU's GDP Climate change/energy : 20%- 20%-20% Education: school drop-out rate below 10% and

40% of people aged 30-34 completing tertiary education

Poverty/social exclusion: - 20 million


The government has set an ambitious employment target: 73.2% (+ 570,000 in 10 years)

49

The labour cost handicap will need to be eliminated

50

Konings and A

braham,

2010

Eliminate labour cost handicap (3.5%) = 60,000 to 72,000 jobs in four years

Link between the evolution of the labour cost handicap and the employment rate if the labour cost handicap, which was created in 1996, is phased out (compared

to retention of the labour cost handicap)


1. Derailed labour costs (1996 = 100)

103.9%

99.0%

100.0%

101.0%

102.0%

103.0%

104.0%

105.0%

106.0%

Evolution of cost per hour worked compared to three neighbouring countries

51

?


52

1. Derailed labour costs

Reasons for derailed labour costs: Wages automatically indexed to changing prices (branch-

level CLA) Plus wage negotiations (0.3% in 2012 under two-yearly

agreement)

Result: hourly labour cost in industry, IDW 2008: Belgium: €35.80 Netherlands: €31.30 - Germany: €32.70 - France: €32.30

High wages and considerable tax and parafiscal burden (social security contributions)


53

2. Ageing population

Ageing (‘greying’) of the Western Europe’s population Post-WWII ‘baby boom’ generation now retiring Birth rate is too low

Reforms are necessary Working longer to finance pensions and

healthcare costs (‘Generations Pact’) Integrating the long-term unemployed, young

people, women, migrants, disabled people and other groups into the labour market

Positive role for experienced workers


54

2. Pensions - early retirement

Age pyramids for EU-25 (source: Businesseurope)


55

Average exit age from the labour market: 59

2. Pensions - early retirement


56

One in four part-time jobs is ‘subsidised’ by social security

3. Leave systems – work and family

Evolution of number of workers taking a career break or working part-time with an allowance from the National Employment Office (Source : ONEM)

57

Very long notice periods for white-collar workersNotice period after 20 years of contract – blue-collar

and white-collar workers (source: OECD)

4. Labour law for blue-collar and white-collar workers


V. Wage negotiations 2011-2012


Wage formation

Framework: law of 26 July 1996 to promote employment - safeguarding competitiveness

Basis for IPA negotiations

Striking a balance between increasing purchasing power and controlling wage costs


Wage formation: Steps

Technical report of the Central Economic Council (CEC)

Fragile recovery Uncertain economic prospects Labour costs derailed 2009-2010: 0.4% Automatic adjustment of wages to rising prices 2011-

2012: 3.9% Correction: 1.1%

Evolution of labour costs in the reference countries, 2011-2012: 5%


Wage formation

● Balance between wage moderation and purchasing power

● Call to sectors → sense of responsibilityo Nothing in 2011o Possible salary increase or other benefits only in 2012

Absolute margin: max. 0.3% of wage costs * Margin : 0% - 0.3%

* Content to be defined

* Recurrent – non recurrent

● Research on indexing mechanism by CEC (2011)o Reducing volatility (mainly energy prices)


Conclusion: still much to be done

Ongoing discussions on: Working longer Job creation Appropriateness of automatic wage

increases(indexing mechanism) Financing leave systems


Sources

63

CRB 2010-1600 Technisch verslag van het secretariaat over de maximale beschikbare marges voor de loonkostenontwikkeling (9 November 2010)

Pieter Timmermans & Geert Vancronenbrug: a SWOT-analysis of the socio-economic and political system in Belgium

Klaas Soens: Statistical factbook FEB 2010 Manou Doutrepont: A new wage standard?


64

Internet sites (English version) Federation of Enterprises in Belgium (FEB)

www.feb.be Federal Public Service Employment, Labour and

Social Dialogue : www.meta.fgov.be Federal Government: www.belgium.be Businesseurope: www.businesseurope.eu http://ec.europa.eu/europe2020/targets/eu-target

s/index_en.htm


http://www.feb.be/

http://www.meta.fgov.be/

http://www.belgium.be/

http://www.businesseurope.eu/

http://ec.europa.eu/europe2020/targets/eu-targets/index_en.htm

http://ec.europa.eu/europe2020/targets/eu-targets/index_en.htm

employer representation and social dialogue in belgium

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