Central talks get off to difficult start

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The Belgian government brought the social partners together on 28 August 2002, to initiate the negotiations that trade unions and employers' organisations will officially conduct from October onwards with a view to concluding an intersectoral agreement for 2003-4. On the fringes of this meeting, statements by senior employers’ leaders on pay indexation and early retirement proved highly controversial.

As is the practice every two years in Belgium (BE0101337F), the social partners will seek from October 2002 to conclude a new intersectoral agreement providing a framework for the pay and conditions (eg flexible working and end-of-career arrangements) of all workers in private sector enterprises for 2003 and 2004. These negotiations are traditionally preceded by contacts with the federal government. The trade unions and the employers' organisations wait until they know what financial resources will be available from the government. In this respect, the drafting of the state budget for 2003 is an important stage, with the federal ministers starting work on their budgets in mid-September 2002. The social partners have also been awaiting the report on competitiveness drawn up by the bipartite Central Economic Council (Conseil Central de l’Économie/Centrale raad voor het bedrijfsleven, CCE/CRB). This report, which is expected around 20 September, mainly serves to determine the margin that will be available for increases in wage costs (the 'pay norm') (BE0008323F).

At their first meeting after the summer break on 28 August 2002, the government and the social partners carried out an initial survey of the issues for future concertation. In view of the overall slowdown in economic activity and the virtual absence of any scope for manoeuvre in budgetary terms (the government is still determined to continue steering towards a small budget surplus in 2003), Prime Minister Guy Verhofstadt called for a 'moderate' intersectoral agreement in order to preserve the country's good economic results.

The meeting took one initial step forward: the adoption of an agreement in principle on simplifying measures supporting job creation. There are currently about 20 schemes in Belgium that use different techniques for reducing social security contributions to promote employment (BE0203303F). The existing system, according to the Prime Minister, is too complicated: 'At the present time, many enterprises find no use for it, because the effort they have to put in is not counterbalanced by the advantages.' The agreement, which will be the subject of a government bill, provides for two reductions in social security contributions for 'target groups'- ie long-term unemployed, young and older people, workers affected by a reduction in working hours, and first-time employers. There will also be arrangements for an additional reduction in contributions aimed at encouraging the employment of workers over the age of 58.

Outside these discussions, relations between the leaders of employers' organisations and trade union have been extremely tense. In interviews given to the French-language daily newspapers, La Libre Belgique and Le Soir on 22 August, Pieter Timmermans, director-general of the Federation of Belgian Enterprises (Fédération des Entreprises de Belgique/Verbond van Belgische Ondernemingen, FEB/VBO) addressed two issues: early retirement and automatic pay indexation (BE0202308F). Mr Timmermans argued in particular that if the employment rate among older workers is to be increased, the early retirement age should be increased to 60, and suggested that workers who have taken a year off work under the 'time credit' scheme (BE0108360F) during their careers should not be able to retire at 58, but wait until they were 59. He also said that if the current 'pay norm', setting the limit for wage increases, were to be abolished, automatic pay indexation would have to be abolished as well: 'If you break through the pay ceiling, why leave the floor as it is?'. Paul Soete of Agoria, the powerful multisectoral employers' federation for the technology industry, added to controversy over pay by stating that there will be no scope for wage increases over the next two years.

The reaction from the trade unions was immediate: the Confederation of Christian Trade Unions (Confédération des Syndicats Chrétiens/Algemeen Christelijk Vakverbond, CSC/ACV) and the Belgian General Federation of Labour (Algemeen Belgisch Vakverbond/Fédération Générale du Travail de Belgique, ABVV/FGTB) said that deferring the retirement age was unacceptable and, as for pay indexation, they were simply not prepared to talk about it.

The Deputy Prime Minister and Employment Minister, Laurette Onkelinx, said that she was astonished by the FEB/VO proposals: 'FEB/VBO pretends that it is concerned about low employment rates among older workers, and then proposes a retrograde policy that could actually reduce the number of jobs.'