social dialogue in belgium

Social dialogue in Belgium

1. Compromise between the social state and the liberal state2. Origins of the Belgian system3. Organization of the Belgian system4. Central Economic Council of Belgium5. Example of work of CEC

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Compromise between the social state and the liberal state

• The field of conditions of work and social affairs cannot be left to the good will of the employers

• The risk of State intervention is that it might be too interfering and difficult to adapt to the realities in the field

2This workshop is organized in the BOSMIP IV project (Business Organizations as Single Market Integrated Players) co-financed by the European Commission. This document has been produced with the financial assistance of the European Commission. The views expressed herein are those of author and can therefore in no way be taken to reflect the official opinion of the European Commission.


• The State allows certain autonomy in the field of social affairs and conditions of work

• Making sure that rights and obligations are set in collective agreements

• Institutional organization of representation of workers and employers and negotiation procedures



• The State is the arbiter of social life that facilitates the convergence of interests in the society, but leaves the social partners the autonomy to organize in the field of conditions of work and social affairs. The State supports reaching a consensus in the society.

• It is necessary to ensure coherence between the social-economic policies of the Government and the choices of social interlocutors in their field of autonomy.


Origin of the Belgian system: the 1994 social pact• Mutual recognition of employers’ organizations and trade unions is

the foundation of social peace and loyal cooperation• This cooperation has a common objective: improvement of

conditions of existence of the entire population thanks to the economic prosperity

• Economic prosperity favors good functioning of enterprises• Equal repartition of revenues from a growing production needs to be

guaranteed par institutionalization of collective bargaining (or labor management negotiations) or of the social security

• It is at the level of the sector that the division of productivity gains between salaries and profits is defined


Belgian social model

• Economic initiative is in essence a private initiative• Autonomy of social partners in the field of social affairs:

– Capacity to negotiate collective agreements (CA) at the intersectoral level (National Work Council (CNT), sectoral level (sectoral committees (CP) or at the level of enterprises between the trade union representatives (DS) and the enterprise management

– Membership in management committees of social security institutions

• Coordination between this sphere of autonomy and social-economic policies of the Government:– Advisory bodies : CCE and CNT



Economic level Stakeholders Institutions, organs Results Entire economy (synonyms

Employers’ confederations (FEB, UCM, UNIZO, BF)

Group of ten Intersectoral agreements (since 1961)

National or intersectoral

Trade union confederations (FGTB, CSC, CGSLB)

National Work Council

Collective agreements (since 1968)

or interprofessional level)

and the Government Central Economic Council

Advice

Sector (synonyms: sector of industry

Sectoral associations Negotiating commissions

Sectoral collective agreements

or sector of economy)

of trade unions and employers

Special consultative commissions

Advice

Enterprise Trade union delegates and shop stewards

Work councils in enterprises

Enterprise level collective agreements

OHS, hygiene and workplace embellishment commissions

Advice


Belgian social model• Stakeholders: social partners

– Employers’ representatives– Workers’ representatives

• The State delegates a part of its competences to social partners: the requirement is that they are representative– The State recognizes as representative organizations

members of CNT and CCE– The State can recognize other representative

organizations (as members of sectoral committees) after the approval of CNT and CCE

– Conditions of representativity of employers’ and workers’ organizations (number of member associations, at the national level)


Intersectoral level

CCTadvice

annual reportadvice

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Central economic councilfunctionsfunctions• Interface between the Government and the social partners

in the field of social-economic policy• Makes sure that the Government is informed about the

opinions of the social partners on social-economic policy which permits the social partners to come to an agreement in their sphere of autonomy (initiative opinion)

• Allows the State to assess the impact to the area of competences of social partners of social-economic policy measures the State plans (opinion on Government demand or on the demand of legislative institutions)

• Using its requests for opinion, the Government can support the evolution of social partners’ opinions


Central economic councilobjectiveobjective

Social – economic compromise: Coherence between the economic and social policies and

the objective of the building the economic prosperity to improve the welfare of everyone, taking into account the conflict of interest of work and capital


Central economic councilsecretariat: missionsecretariat: mission

• Inform the social partners:– Organization of hearings (ministerial level, official level, universities,…);– Organization of conferences– Making available the notes and the reports made by the National Bank or the

Federal Planning Bureau– The Secretariat prepares reports and studies

• Organize the debates between social partners– Progressive development of shared awareness– Structure new social challenges and new balances of power– Update social-economic agreement

• Elaborate agreements between social partners– Work on achieving consensus between social partners on different points of

social compromise– Update the social compromise by formalizing it into an opinion to be

presented to the Government


Central economic councilorganizationorganization


1945–1960 common social-economic vision

• 1953–1955 – CSC emergency programme – Extraordinary congress of FGTB on the economci situation

and future perspectives– FIB white book on economic expansion

• 1954 joint declaration on productivity• 1955–1960 economic framework• 1961 agreements on vocational training• 1961–1963 social support


Common declaration on productivity

• Make an effort to produce more efficiently and more cheaply (boost productivity) to fight foreign competition (price competitiveness) and to increase the consumption by strengthening the purchasing power– New production techniques– New organization of works– Economies of scale and consequent concentration of enterprises

• The resulting growth needs to contribute to the reduction of technical unemployment (due to introduction of new technologies) and the current number of unemployed


Common declaration on productivity• Why a social compromise on productivity?

– For employers: obtain the cooperation of workers in looking for productivity gains (introduction of new production technologies. Internal flexibility)

– For workers : gain an equal part of growth results and the reaffirmation of the recognition of trade unions

• Signing of productivity agreements in several sectors and big industrial and service enterprises – Productivity incentives– Intervention of trade union production experts trained by the

Belgian Productivity Growth Office (sectoral body) to promote the acceptance of reorganization of work


State – economy relationship (macroeconomic policy) • 1959 – CCE opinion on programing of the economy (setting up

of the Economic Programming Bureau, the predecessor of the Federal Planning Bureau)

• Employers’ acceptance :– Planning of public policies– Link between economic and social planning (see wage model)

• 1959 - CCE regulation on economic expansion based on active budget and monetary policy

• 1959 – fiscal laws envisaging fiscal exemptions and tax reliefs– Loans with reduced interest rates– State guarantee for investment loans


Innovation system structuring

• Collective research centers (beginning of 1950s)

• Granting of loans and advances without interests for the studies of new products and methods of production

• Foreign investments, especially the American investments

• Import new production techniques and new work and management practices


Competitiveness regime modification• Judicial and fiscal experts to promote fusions• Example of the electricity sector (1995): employers’ –

workers agreement to restructure the electricity sector (coordination of investments, transport and tarrifs) – Committee of control of gas and electricity replaced by

CREG at the end of 1990s • Control of other revenues and profits in the sector

protected from the international competition through the pricing policy and access to the profession managed by the social partners


Wage policy

• Social consequences of the technological progress– Redundancies (external mobility)– Introduction of new professions (professional mobility) – Introduction of new techniques (internal mobility)

Social costs for the workers: how to reduce them or compensate them?


Wage policyAcceptance of technological progress • Adjustment of the general system of unemployment benefits • Security and existence funds which complement the general

system of unemployment benefits through collective agreements• Special incentives and waiting incentives (redundance packages)

which have to assure certain standard of life until a person finds new employment

• Accelerated professional training of adult workers: workers in professions suffering from endemic unemployment can be trained for a new position in the enterprise, sector or another sector and be paid in that period until finding a new job (CNT Opinion 1956) (the Government implemented it only in 1963)


Wage policy

• Interprofessional agreements which are called social planning agreements and and have a solidarity and coordination function– Solidarity: spreads to the largest possible number the gains of

the strong sectors (length of work, paid days of annual leave, security and existence funds,…)

– Coordination: coherence between the State social agenda and the sectoral agenda (defense of sectoral autonomy); by negotiating security development and setting up of the social State, the social partners assume acceptance by employers and employees of social taxes and contributions thus avoiding the introduction of fiscal and parafiscal charges into the salary costs and price formation.


Work of CCE today

• Climate changes – energy policy• Sectoral analysis (situation; competitiveness; employment)• European policy• Competition policy• Social – economic policy


Work of CCE today• Develop a joint analysis framework where it is possible

to choose economic and social policies:– Define the starting point for wage negotiations in sectors

and enterprises– Recommendations to the Government on which policies to

implement (reduction of contributions or taxes, reassessment of social welfare contributions; entrepreneurship; the link between science and industry; patents; climate and energy)

– Ensure the follow up of agreements between the social partners (training, R&D)


Work of CCE today• Social – economic policy (serves as basis of intersectoral negotiations)

– Revalorization of social welfare contributions• Situation in public finance• Unemployment traps; social contributions; poverty taxes

– Annual report on socio-economic situation• Development of prices• Structural competitiveness (innovation, internationalization, setting up of

enterprises)• Employment dynamics• Vocation education and training efforts• Evolution of repartition of added value, analysis of national and industry

accounts (tax rates) – Definition of the starting point for collective bargaining in Belgium (CCR

manages the legal framework of deciding on wage policies)


Legal framework of wage policiesObjective:

Employment promotionTwo pillars:

Macroeconomic : containing public-sector wages (redesigning the wage indexation mechanism)

Structural : structural aspects of competitiveness Instrument to deal with the distribution of wages taking

into account the prospective membership in the EMU Budgetary context (how high the debt is) Indexation mechanism

Solve the contradictions of the 1954 social deal


Legal framework of wage policies Fixing in the intersectoral collective agreement:

Of a margin for increase of wage costs in relation to the average increase of salaries in the three reference countries (D, F, Nl)

Measures supporting employment (redistribution of work and more flexibility in the organization of work)

Tripartite consultations on employment


Legal framework of wage policiesMargin is an instrument of coordination of different

levels that contribute to the increase of wage costs This is not a Belgian system only, the Netherlands and Germany

also implement similar systems Germany: informal, choice of the region or sector where the

initial negotiations will take place (later alignment of negotiations with the results of these initial negotiations) in the framework of informal consultations between the State, the Central Bank and the social partners

The Netherlands: coordinated decentralization; law comparable to the Belgian law which allows the State to intervene in the negotiations; coordination at the highest level of economic parameters (the objective of profitability of enterprises) in the SER and collective in SA

In relation to an objective: employment


European policy

Appropriation by the social partners of the Lisbon strategy– Opinion of the social partners on the optimal mix of the macroeconomic

policy in the European framework– Opinion of the social partners on Europe of knowledge and the Lisbon

strategy Incorporation of the Lisbon strategy in the balance of power during

intersectoral collective bargaining – 1999-2000: develops the triptych wage – employment – education and

training in relation to the reduction of contributions – 2001-2002: better conciliation of work and family life and better

conditions of work for ageing workforce with establishment of a „time credit” scheme

– 2005-2006: development of additional hours; unemployment traps and reduction of tax wedge

– 2007-2008: diversity and non-discrimination; non-recurring advantages linked to results


European policy

• Meeting with the Belgian representatives in the economic policy committee; employment committee; economy and finance committee

• Meetings with the permanent representatives of Belgium in the European Union

• Meeting with the person in charge of Europe in the study service of the Ministry of Foreign Affairs

• Meetings with the director of the Central Bank on the situation in the financial markets and financial regulations

• Drafting of the preparatory note on the Government proposal of the National Reform Plan

• Meeting with the persons in charge of the Belgian desk in the Commission who draft the recommendations in the framework of the new European governance

Politique européenne• Rencontre avec les représentants de la Belgique au comité de

politique économique; de l’emploi; économique et financier• Rencontre avec le représentant permanent de la Belgique auprès

de l’Union européenne• Rencontre avec le responsable Europe du service d’étude du

Ministère des Affaires étrangères• Rencontre avec le directeur de la Banque centrale sur la situation

des marchés financiers et de la régulation financière• Rédaction d’une note préparatoire à l’élaboration par le

gouvernement du Plan national de réforme• Rencontre avec les responsables du desk Belgique de la

Commission qui ont rédigés les recommandations dans le cadre de la nouvelle gouvernance européenne

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social dialogue in belgium

Documents

social state

european commission

social securityit

social dialogue

social partners

field of social affairs

socialeconomic policies

foundation of social