1999 Annual Review for Belgium

This record reviews 1999's main developments in industrial relations in Belgium

Economic developments

According to the provisional estimates of the Institute of National Accounts (lnstitut des Comptes Nationaux), Belgian GDP totalled BEF 9,064 billion (EUR 224.7 billion) in 1998. As such, it accounted for 1% of the OECD zone's GDP and 3% of the European Union's GDP. In 1999, GDP increased significantly – by 1.7% – between the first and the second quarter of the year. GDP also increased by 1.7% (according to the raw data) in the second quarter, in comparison with the second quarter of 1998.

Aside from a few exceptional periods during which the repercussions of serious external shocks become noticeable (due to the extreme openness of the Belgian economy) inflation is traditionally relatively moderate in Belgium. During the course of the past three years, the consumer prices index has not risen by more than an annual average of 1.5%. This price restraint mainly reflects the policy, officially implemented by the government since 1990, of anchoring the Belgian franc to the German Mark, which was traditionally the most stable currency in the European Monetary System.

As at late November 1999, there were 384,889 fully unemployed job-seekers receiving unemployment benefit (chômeurs complets indemnisés demandeurs d'emploi, CCIDE), of whom 217,696 were women and 167,193 were men. The downward trend in unemployment thus stabilised at annual fall of around 5.1%. Conversely, the number of unemployed people who are over 50 and not included in CCIDE figures continued to rise (reaching 142,645 on 30 November 1999). This means that, taking into account both the CCIDE and the figures for older unemployed people, unemployment fell by no more than 2.6% in the year to November 1999. The unemployment rate (measured by the number of registrations at unemployment offices) averaged 11.3% of the working-age population in 1999 (compared with 12.1% one year earlier): 14.4% for women and 8.9% for men. The number of unemployed people who are younger than 25 stood at 66,969 - a decrease of 5.2% compared with one year earlier.

For 1999, Belgium showed a budgetary deficit amounting to 0.9% of GDP. Belgium's public debt is falling – it is currently BEF 9,935 billion or 114.9% of GDP, some way short of the Maastricht convergence criterion, which specifies a public debt/GDP ratio of not more than 60%.

Political developments

On 13 June 1999, elections were held for the European Parliament and federal and regional governments. Overall the polls produced a new and rather diverse political scene, resulting in a "rainbow coalition" – a combination of "blue", "red" and "green" (liberals, socialists and environmentalists) - at federal and regional levels. Support for the former government parties (the socialist and social-christian parties) declined across the country, and the social-christian parties were driven into the opposition everywhere, even where they won the largest share of the vote, as for example in the German-speaking community.

At the federal level, the new government is made up of six parties: Vlaamse Liberalen en Democraten (VLD) (Flemish liberals); Parti Réformateur Libéral-Front Démocratique des Francophones-Mouvement du Citoyen pour le Changement (PRL-FDF-MCC) (French-speaking liberals); Parti Socialiste (PS) (French-speaking socialists); Socialistiche Partij (SP) (Flemish socialists); Ecolo (French-speaking environmentalists); and Agalev (Flemish environmentalists).

At the federal level, the fact that the social-christian parties (Christelijke Volkspartij, CVP, and Parti Social Chrétien, PSC) were forced into opposition is a development which has not been seen since 1954. The progress achieved by both liberal parties, VLD in the north and PRL-FDF-MCC in the south, makes them the strongest political force in the country for the first time. Both environmentalist parties doubled their election scores: Ecolo in the south and Agalev in the north. Finally, the French-speaking extreme-right party lost votes, whereas the Flemish extreme-right party (Vlaams Blok) strengthened its foothold in Flanders. This did not apply to Brussels, where Vlaams Blok failed to secure a majority amongst Dutch-speakers. Commentators interpret the election result as a "punishment" of the outgoing majority, worn out by 11 years of power and crippled by the dioxin food contamination scandal (which also involved the social partners in dealing with the problems created - BE9906179N) in its latter days. Notwithstanding the fact that the resulting climate undoubtedly benefited environmentalists, the strong support for Ecolo and Agalev can also be interpreted as a call for a different type of governance.

In its coalition agreement, The way to the 21st century, the new government sets out its key objectives. On the socio-economic front, privatisation and the sale of assets are scheduled in order to finance a reduction of taxation on individuals and enterprises, in particular with a view to raising the labour force participation rate (the labour force as a percentage of the working-age population), within a framework of compliance with the EMU Stability Pact. The government is relying on additional income resulting from a growth in economic activity to prevent threats to the funding of social security.

In the Flemish region, the VLD, SP, Volskunie-ID 21 (VU-ID) and Agalev coalition government agreement aims to create some 30,000 jobs per year in Flanders.

In the Walloon region, the PRL-FDF-MCC, PS and Ecolo coalition government's programme, the Contract for a Walloon future, states its intention to haul Wallonia's economic and labour market indicators within the average European range by 2010. With a view to this, it intends to work along three main lines: sustainable growth by means of encouraging the growth and activities of small and medium-sized enterprises; reflating the economy in zones that are heavily dependent on European grants; and actions targeted at young people.

In the Brussels region, the coalition government of PRL-FDF-MCC, Ecolo, PS and democratic Dutch-speaking parties focuses on employment and the fight against economic polarisation of the community, by means of implementing integrated housing and urban planning policies, including schemes to revitalise neglected areas.

Finally, in the German-speaking community, the blue-red-green coalition - Partei für Freiheit und Fortschritt (PFF), SP and Ecolo - agreed on a text that, amongst other matters, foresees the intensification of collaboration with the neighbouring European regions of Maas-Rhine and Saarland-Lorraine-Luxembourg, in addition to increased devolution of power.

Collective bargaining

In Belgium, bargaining has a two-year cycle, with national intersectoral agreements concluded every two years. More sectoral agreements are normally concluded during the first year of implementation of the intersectoral agreement (uneven years) than in the second year; while more company-level agreements are normally concluded in the second year (even years), than in the first.

The even year of 1998 was essentially one of company-level implementation of earlier agreements concluded at the higher levels (sectoral and intersectoral). The number of collective agreements and similar texts registered with the Ministry of Employment and Labour totalled 2,979 in 1998. This exceeded the average outcome recorded for previous even years in Belgium (a mean figure of 2,145 collective agreements registered each year). Out of the 2,979 agreements reached in 1998, 409 were concluded by sectoral joint committees (13%) and 2,570 (86%) at company level.

Following the conclusion of a new intersectoral agreement for 1999-2000, 1999 was a year characterised mainly by sectoral agreements. The available data on the number of collective agreements registered in 1999, covering the first half of the year only, compared with those of the corresponding period in 1997 (the previous uneven year), are presented in the table below.

Source : Ministry of Employment and Labour.

Pay

The intersectoral agreement reached in November 1998, covering 1999 and 2000 (BE9811252F), provides for wage restraint by stating that hourly labour costs should not rise any faster than those in Belgium's three main neighbouring countries (France, Germany and the Netherlands). The agreement states that pay rises can only be awarded within the set framework of a maximum increase of 5.9% in the labour cost of full-time workers. However, unlike previous years, this wage margin need not be regarded as a mandatory standard but rather as a benchmark. Nevertheless, the benchmark was followed in influential sectors such as metalworking (BE9912311F).

Working time

The 1999-2000 intersectoral agreement provided for a reduction in the legal maximum for weekly working hours, from 40 to 39 hours as of 1 January 1999.

In sectoral bargaining, an agreement was signed in March 1999 for the large supermarket sector, providing for phased working time reductions starting from September 2000. Working time will be reduced initially from 36 to 35.5 hours and then a year later to 35 hours. For part-time workers (employed for 24 hours a week or less) there will be a rescheduling of working time, which will result in a four-day working week (BE9903267N).

Within the framework of the intersectoral agreement, the social partners have requested that the administrative aspects of part-time work be simplified and that proposals aiming to improve the status of part-time workers in the following areas be closely examined: the right to early retirement; guaranteed annual leave entitlement in the event of a change in employment; and retention by part-timers of full-time workers' rights in a number of well-determined cases. However, the evaluation of those measures has not yet begun.

Equal opportunities

The social partners have, within the framework of the intersectoral agreement, requested that sectoral job classification systems which lead to unequal opportunities for men and women be fully revised by joint committees. The social partners have not yet evaluated the implementation of this measure.

Job security

Under the 1999-2000 intersectoral agreement, the social partners intend to unite their efforts in order to achieve employment rates in Belgium that are at least as high as those achieved by its neigbouring countries and, if possible, to improve upon this, taking into consideration agreements on training and employment and reductions of labour-related costs.

Training and skills development

The intersectoral agreements confirm the social partners' commitment to making additional efforts in the area of continuing training and education, with a view to achieving investment in training in Belgium which is equivalent to the mean level reached by its three main neighbouring countries (ranging from 1.2% to 1.9% of total paybill) within six years. For the period 1999-2000, this will be mean an increase in employer contributions to training from 1.2% to 1.4% of paybill.

With regard to sectoral-level bargaining, referring to the collective agreements registered as at September 1999, some 80% of sectors are covered by agreements which include some provisions which are relevant to training.

Legislative developments

In 1999, legislative measures from the federal government focused mainly on the labour market, with the aim of improving the quality of the labour force. Notably, in September 1999, the "Rosetta plan" was adopted (BE9911307F), with the aim of improving the employability of young people by providing them with a first experience of work

While the responsibilities related to vocational training have been devolved to the communities, the federal state remains a key initiator of measures taken to improve the quality of the labour force. This applied in 1999 to issues such as measures to assist unemployed people, initiatives to help groups deemed to be particularly vulnerable, and paid education leave, which are funded by the federal state even though their realisation relies to a large extent on technical resources provided by the regions and communities. In addition, measures have been introduced which provide young people with the opportunity to combine work and training (employment/training contracts and apprenticeships combined with wage-earning occupational activity).

The federal government has taken a number of actions aimed at reducing labour market supply. These comprise schemes that enable workers to withdraw temporarily from the labour market (career breaks) or to finish their career early (early retirement and half-time early retirement schemes). The withdrawal from the labour market of people on these schemes is intended to result in job opportunities for unemployed people. Commentators also note that changes in unemployment regulations - notably the interruption of unemployment benefit, suspension due to long-term unemployment and specific schemes which target older workers - can also result in a reduction in labour market supply, (BE9909183N and BE9905271F).

A variety of actions have also been targeted at labour demand. "Local employment agencies" (Agences locales pour l'Emploi/Plaatselijke werkgelegenheidsagentschappen, ALE s/PWA s) endeavour partially to reintegrate long-term unemployed people into work by stimulating demand for these people to perform small-scale, so-called "proximity jobs" in areas such as gardening, domestic help and helping older people (BE9807148F). Other measures seek to create employment, either directly or through the "activation" of unemployment benefits. In addition, some measures aim to encourage recruitment or the maintenance of jobs through a reduction of employers' social security contributions, notably the "Maribel" scheme of contribution reductions (BE0001303N), and a reduction of contributions in respect of low-paid workers (BE9910308N and BE9901161F).

The organisation and role of the social partners

A number of developments concerning the structure and activities of the social partners occurred during 1999. In terms of consultation at federal level, the law of 26 March 1999 on the Belgian National Action Plan raised the number of members of the bipartite Central Economic Council (Conseil central de l'Économie/Centrale Raad van het Bedrijfsleven, CCE/CRB) from 50 to 56, and in addition provided for representation of the non-profit sector in the employers' delegation (BE9807149N).

The social partners were active during 1999 in negotiating bipartite agreements at national level within the framework of the National Labour Council (Conseil National du Travail/National Arbeidsraad, CNT/NAR). On 30 March, they approved a new intersectoral collective agreement on combating stress at work (BE9904269F). The agreement integrates stress management into general company policies on the prevention of risks, and aims to tackle the issue on a collective rather than individual basis. The accord follows up an intention expressed in the national intersectoral agreement for 1999-2000.

In terms of the representation of social partners at sectoral level through joint committees, the main change in 1999 was that the sphere of competence of the joint subcommittee for medium-sized enterprises in the food industry was defined and formally confirmed in 1999. The competence of a number of joint committees was also repealed, including the auxiliary national joint committee for blue-collar workers, the joint committee for household workers, and the various joint committees connected to coking plants.

Trade union debates on possible restructuring and mergers were held throughout 1999. At the end of 1998, the Belgian General Federation of Labour (Fédération Générale du Travail de Belgique/Algemeen Belgisch Vakverbond, FGTB/ABVV) amalgamated its district offices in Gent, Dendermonde and Waasland, to form a new branch entitled Scheldeland. This union hopes in the longer term to reduce its number of Flemish districts from 14 to seven - it has no plans to reorganise its Walloon operations. The Confederation of Christian Trade Unions (Confédération des Syndicats Chrétiens/Algemeen Christelijk Vakverbond, CSC/ACV) has also been restructuring - mergers of its sectoral federations have taken place, with the result that one large federation now organises some 230,000 blue-collar workers in sectors such as construction, wood, paper, graphical services, stone, cement and glass.

Some changes to the leadership of social partner organisations were made in 1999: in March, the general council of CSC/ACV chose Luc Cortebeeck as its ninth president, taking over from Willy Peirens who had held the position for 12 years. In April 1999, the administrative council of the Federation of Belgian Enterprises (Fédération des entreprises de Belgique/Verbond van Belgische Ondernemingen, FEB/VBO) made Gui de Vaucleroy its new president.

Industrial action

In terms of conflicts relating to working conditions, the banking sector was severely affected in 1999 by deadlocked negotiations and strikes (BE9907276N). During the bargaining, demands and impasses centred on issues such as overtime, Saturday work and the status of employees in franchised branches (BE9911310N). An agreement was finally reached at the beginning of December 1999 after a long bargaining process and in a tense climate of strikes and protests. The banking sector can be said to illustrate the new demands made on employees in a context of mergers and acquisitions that imposes increasingly sharper productivity and profitability demands on companies. 1999 also saw a high-profile conflict over pay and conditions in the road transport sector (BE9906275F)

In terms of conflicts relating to the preservation of jobs, Belgium still has a number of large industrial enterprises where employment levels and industrial activity are relatively insecure, sometimes resulting in closures, or buyouts by foreign shareholders leading to workforce reductions. Conflicts over restructuring or closures occurred in 1999 at firms such as: Verlipack (BE9912310N); Carnoy (BE9909280F), UGB (BE9903169N); and "Volkswagen's Forest plant" (BE9902263N).

National Action Plan (NAP) for employment

In Belgium, the contribution of the social partners to drawing up and implementing the Belgian National Action Plan (NAP) on employment, in response to the EU Employment Guidelines, was developed within the framework of the bipartite intersectoral agreement for 1999-2000 (BE9811252F), which states that: "The social partners wish to participate in the realisation of the Belgian NAP for employment of April 1998, and in particular in the programme set for the reduction of labour costs and training with a view to improving the employability of the working-age population."

A Flemish regional contribution to the Belgian NAP was developed within the Flemish Economic and Social Consultation Committee (Vlaams Economisch en Sociaal Overleg Comitee). A framework agreement was concluded by the Flemish social partners on 23 March 1999 and includes measures relating to training, vocational integration and equal opportunities.

The Walloon government endorsed the region's contribution to the 1999 NAP on 22 April 1999. Prior to this, the text had been submitted to the Social and Economic Council of the Walloon Region (Conseil économique et social de la Région wallonne, CESRW). The text contains, in respect of each of the EU guidelines, an assessment of the measures adopted and proposals developed by the competent Walloon ministers. The social partners did not make any specific comments on the document, because they maintained that the deadlines set by the Walloon government were too tight and because they failed to identify any new features in comparison with the 1998 NAP.

In the Brussels region, tripartite consultation concerning the NAP was conducted in a similar way to that in the Flemish and Walloon regions.

The impact of EMU on collective bargaining and industrial relations

In the context of EMU, collective bargaining must take into account several parameters, amongst which the preservation of competitiveness and employment play a key role. In Belgium, as noted above, this is reflected in the fact that it has been agreed within the framework of the intersectoral agreement that hourly labour costs in 1999-2000 cannot increase at a higher rate than the average of the three main neighbouring countries.

Employee representation

1999 saw few significant developments in the field of employee representation.

New forms of work

The legal framework for flexible working arrangements has undergone significant changes in recent years - most recently the introduction in 1998 of the possibility of concluding consecutive fixed-term contracts, with a view to encouraging the recruitment of workers. However, no new initiatives in this area occurred in 1999.

Outlook

In political terms, the election of new governments at federal and regional level was the main event in 1999. From an economic standpoint, notwithstanding the dioxin crisis in June, recovery was noticeable during the year. In industrial relations, the intersectoral agreement was implemented via sectoral agreements in 1999 and, in some cases (notably the banking sector), long and laborious negotiations were needed.

For 2000, the new ministers have a number of legislative projects on their agenda which they clearly wish to implement during the course of the year. Municipal elections are due in October 2000. In terms of industrial relations, bargaining in 2000, as the second year of a two-year intersectoral agreement, will be characterised by an increase in the number of negotiations conducted at company level and a drop in negotiations at sectoral level. For the social partners, the May 2000 "social elections" of employee representatives on various bodies (BE0001302N) will be a major issue in the coming year.