EMPLOYER REPRESENTATION AND SOCIAL DIALOGUE IN BELGIUM Split, 28 & 29 September 2011 Michèle Claus...
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EMPLOYER REPRESENTATIONAND SOCIAL DIALOGUE IN
BELGIUM
Split, 28 & 29 September 2011
Michèle Claus
First Advisor, Social Department, FEB
1Split - 28 & 29 september 2011
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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
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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
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GDP per capita in PPS in Europe
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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
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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
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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)
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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
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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)
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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
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5. Structure
Departments Social Affairs Department Economic Affairs Department European and International Department Legal Affairs Department Communication Department
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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
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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
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1. Introduction: main characteristics of Belgium
Political structure Economy Public finances Political parties Some basic social statistics
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Political structure
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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
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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
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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
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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
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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
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Interprofessional dialogue
Christian
socialist
liberal
FEB
President (FEB)
SMEs
agriculture
“GROUP OF 10”
Group of 10
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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
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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
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IV. Main challenges
Wages and labour costs Job creation Ageing population Employability Peaceful industrial relations
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Background to negotiations:
SWOT analysis of our socio-economical and political system
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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
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Strengths
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Well-trained workers…
ForcesForces
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... and clusters of different strengths
ForcesForces
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Weaknesses
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Belgium has a growth problem...
WeaknessesWeaknesses
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... and is losing market share in the international context
WeaknessesWeaknesses
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We are facing higher wage costs...
WeaknessesWeaknesses
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… mainly due to a high tax burden (EUR source: IDW Köln)
WeaknessesWeaknesses
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Wage formation is very rigid
WeaknessesWeaknesses
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Structural unemployment remains high…
WeaknessesWeaknesses
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… and there is a large gap between insiders and outsiders on the labour market
WeaknessesWeaknesses
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Example: low employment rate among over-55s
WeaknessesWeaknesses
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Threats
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Population ageing is fast becoming a reality
2011
ThreatsThreats
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Opportunities
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Great potential to improve our prosperity
OpportunitiesOpportunities
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Keeping people at work longer to finance the ageing of the population
OpportunitiesOpportunities
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Slow down the growth of healthcare spending
OpportunitiesOpportunities
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Efficiency gains in health care (in % of GDP; source: OECD)
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Increase the efficiency of the public authorities
Source : OECD
OpportunitiesOpportunities
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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
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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
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The government has set an ambitious employment target: 73.2% (+ 570,000 in 10 years)
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The labour cost handicap will need to be eliminated
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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)
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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
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?
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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)
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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
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2. Pensions - early retirement
Age pyramids for EU-25 (source: Businesseurope)
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Average exit age from the labour market: 59
2. Pensions - early retirement
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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)
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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
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V. Wage negotiations 2011-2012
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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
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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%
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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)
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Conclusion: still much to be done
Ongoing discussions on: Working longer Job creation Appropriateness of automatic wage
increases(indexing mechanism) Financing leave systems
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Sources
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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?
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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
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