European Trade Union Institute, ETUI.

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Labour market reforms: background summary

Until very recently, Belgium had to some extent escaped the shift towards dismantling of labour law and increase of labour market flexibility. The main reforms of note are the merging of the statuses of manual worker (ouvrier) and non-manual worker (employé) into a ‘single status’, and the adjustments to partial unemployment. The automatic wage indexation system, strongly backed by the trade unions and criticised by the EU and by employers remains in place, although it was called into question and suspended in 2015. However, a major reform aimed at introducing more flexible working time was adopted in 2016.

Partial unemployment and merging of manual worker and non-manual worker statuses

  • In response to the economic and financial crisis, the Coalition Government led by socialist Prime Minister Elio Di Rupo introduced several measures to soften the blow, notably the 2012 extension to non-manual workers of the partial unemployment (‘economic unemployment’) system, which had previously applied only to manual workers (this also speeded up the move to merge the statuses of manual and non-manual workers – see below).
  • This offers employers the possibility, in the event of a shortage of work owing to economic factors, to suspend employment contracts or reduce the hours worked by employees. Wage compensation paid by the Public Employment Service, which is calculated as a percentage of loss of income, rose from 70% to 75% of an individual’s previous wage at the beginning of 2009 before falling back to the present rate of 65%.
  • The Law of 16 May 2016 setting out various social affairs provisions, adopted on the initiative of the new Coalition Government (Flemish and French-speaking liberals, Christian-Democrats and Flemish nationalists) formed in 2014 by Prime Minister Charles Michel, amended the economic unemployment scheme for employees. It confirms that, in order to be considered a company in difficulty and therefore entitled to suspend employees’ contracts for economic reasons, a business needs to prove that its turnover, output or number of orders has fallen by 10% compared with 2008 or with one of the two years preceding the application for economic unemployment.
    • The Law of 26 December 2013 introduced a ‘single status’ for manual and non-manual workers, who had previously been subject to two separate statuses that saw them treated differently, including as regards notice periods and the number of ‘waiting days’ in the event of sick leave. This law entered into force on 1 January 2014. It was the result of long and difficult negotiations between the social partners and within the Government after the Constitutional Court found in its ruling of 7 July 2011 that the differences in status between manual and non-manual workers were discriminatory. The new provisions introduced dismissal and resignation arrangements that are identical for all employees, whether they are manual or non-manual workers.
    • The automatic indexation mechanism enabling wages to be adjusted in line with recorded inflation was upheld in principle, in spite of the Government’s decision to apply an ‘index jump’, i.e. to postpone a scheduled increase in wages. Nevertheless, the European Commission and international organisations such as the IMF and OECD have repeatedly recommended, in the course of the European Semester, that the Belgian Government should ‘reform, in consultation with the social partners and in accordance with national practice, the system of wage bargaining and wage indexation, to ensure that wage growth better reflects developments in labour productivity and competitiveness’.

Working time reform

  • In April 2016, the Government tabled amendments to social legislation aimed at increasing the flexibility of working time. The FGTB trade union confederation condemned these as ‘a reform decided upon without any form of social dialogue’ and has already organised a number of demonstrations. The main trade union confederation, the CSC, argues that companies should deal with peaks in activity by ‘recruiting additional workers and not by demanding that staff should put in extra hours on the cheap’. Putting on a united front, the trade union confederations have come togetherto hold demonstrations and strike action.
  • In spite of this mobilisation by the trade unions, the reform (draft ‘Feasible and Flexible Work Bill’ and reform of the 1996 Wage Standard Law) was adopted by the Government on 28 October 2016. Parliament is expected to vote on this new reform in January or February 2017. It includes the option of calculating weekly working hours over a period of one year instead of three months. This annual calculation of working hours must be set out in a company-level or sectoral agreement. In view of the insufficient number of collective agreements in place in the e-commerce sector and in order to facilitate the option of night work, the reform also allows for the unconditional authorisation of night work, i.e. without the need for an agreement. The reform of the 1996 Law also involves measures that amend the calculation of the available wage cushion and that will bring about wage moderation in the next few years, which have been criticised by the trade union organisations .