At the end of August 2006, the workers’ general assembly at firearms factory FN Herstal went on strike over issues pertaining to early retirement, end of career reform and payment bonuses. After a difficult stand-off in the negotiations, which threatened to put a substantial new work contract at risk, agreement was finally reached on 14 September 2006.
The Fabrique Nationale de Herstal (FN Herstal) was established in the city of Herstal, near Liège in eastern Belgium, in 1889 following an order by the Belgian government to manufacture 150,000 Mauser rifles. Although best known as a firearms manufacturer, FN Herstal was until 1965 also the largest manufacturer of motor vehicles in Belgium. Since 1997, the Walloon Region of Belgium has been the only shareholder of FN Herstal. Today, the company employs 1,100 people.
Strike action
On 25 August 2006, the workers’ general assembly decided to take strike action. The following three main points of discussion were on the agenda of the negotiations:
- early retirement;
- reform of retirement options;
- bonus payments based on company profits.
Early retirement and reform of retirement options
The company management accepted the workers’ request for an early retirement option to be made available in 2008, 2009 and 2010, providing the worker is at least 58 years old and has worked at FN Herstal for a minimum of 35 years. Nevertheless, the trade unions were not in agreement on two specific issues.
- First, financial conditions in terms of compensation vary from one worker to another and retirement applications will be accepted incrementally, according to the demands of the workforce. However, the workers wanted the early retirement option to be made available to everyone on an equitable basis.
- Secondly, the trade unions consider that the benefits offered to the worker who decides to retire at the age of 60 years are too generous in comparison to the worker who opts for earlier retirement. The official retirement age in Belgium is 65 years for men and 64 years for women, but early retirement is possible on an official basis at the age of 60 years.
This overall situation is problematic because, legally, those taking early retirement have to be replaced within the company, which is not the case for someone at retirement age. Thus, offering standard rather than early retirement could be used as a means of reducing staff numbers. However, the management sought to give reassurance to the workers on this point by confirming that 70 jobs had been created so far this year and 200 new jobs in total over the last four years, all of them with a permanent employment contract. Nevertheless, the trade unions argue that these jobs favour experts, engineers and workers with specialist skills.
According to the trade unions, discussion on the reform of retirement options had not yet started.
Since the average age of workers is over 47 years, these two topics were crucial to the negotiations. Indeed, as many as 305 workers could be eligible for early retirement between 2006 and 2010, which represents 30% of the total workforce at Herstal.
Bonus payments based on company profits
Regarding the third item on the agenda, the initial bonus payment of €350 gross was increased to €750 gross for each worker, including the management. The trade unions disagreed with the payment of this bonus to the management because the latter already received a bonus under another scheme – amounting to more than €3,000 gross on average – some months ago and also because they were not participating in the strike action.
The topic of bonus payments was under negotiation just as a contract of USD 22 million (approximately €17.5 million) was signed between FN Herstal and the US Navy, for which 90% of the work will be carried out at FN Herstal.
Escalating tensions
At present, the management has stated that early retirement will not be encouraged because of the cost involved. It considers that the trade unions exaggerated the situation, and that such action was reprehensible, given that the company’s survival was at stake. The trade unions maintained that action at regional level might be taken.
Meanwhile, the trade unions contacted the Walloon Minister of Economy and Employment, Jean-Claude Marcourt. The minister met with representatives of the trade unions and employer organisations during the second week of September 2006 and stated that ‘mutual confidence has to be rebuilt’.
Agreement reached
Negotiations resumed on Saturday, 9 September and a preliminary agreement between the company management and the trade unions was presented to the workers on Wednesday, 13 September.
With regard to the early retirement issue, almost identical conditions for all workers have been proposed. The management has insisted that the settlement amounts must be progressive, in order to provide an incentive for a large number of workers to remain in their jobs for as long as possible.
On the other hand, a bonus would be given to all employees, but a special bonus would be paid to salaried workers when the strike ended.
The workers’ general assembly decided on 14 September, almost unanimously, to call off the strike. They approved the preliminary agreement negotiated by the trade unions and the management of FN Herstal.
Isabelle Vandenbussche, Institut des Sciences du Travail, UCL