The Employment Cells

1. The Employment Cells MISEP Meeting – Stockholm 7 October 2009 Tom Bevers, FPS Employment, Labour and Social DialogueBelgium

2. Background • Traditional approach to entreprise restructurings : massive use of early retirement • Possible from the age of 50, if agreed by the Minister • Generous system : UB + employer paid complement of at least 50% of the difference between UB and net wage (up to a limit) • No obligation to be available for the labour market • Until 65 (obliged to remain in the system until pension age) • 2005 Generations Pact : active ageing • Make early retirement less attractive • Invest in active measures instead of passive UB payments • As part of a broader set of measures

3. New approach since 2006 • In case of collective dismissals (10% of workers) : no early retirement before 58 unless an employment cell is created • Objective : to guide, train and find a new job for the redundant workers • Obligatory passage for all redundant workers over 45 (risk loosing entitlement to early retirement or even to UB) • Voluntary for other workers • Duration : 6 months • No dismissals possible outside of the procedure

4. In practice • The cell is created by the employer • Other participants : trade unions, industry-based training centers… • Leading role (in general) : PES • Employer has to submit a plan to the regional and federal minister

5. Status of the participants • Redundant workers continue to receive their wage (even when entitled to less as severance pay) as an “integration allowance” • Workers have all obligations of UB recipients (availability, accept suitable job offers…) • Integration allowance can be kept when a new job is found • Workers that went through the cell are eligible for temporary SSC reductions : • Employer’s SSC for the new employer • Employee’s SSC for themselves

6. Changes in 2009 (crisis) • Employment cells for ALL collective dismissals, even when no early retirement • Redundant workers ALL go through the cell • Under 45 : 3 months with at least 30h of outplacement • Over 45 : 6 months with at least 60h of outplacement • Also for temporary workers, agency workers… • Exception (as before) : workers over 58 years of age or 38 years of seniority

7. Regional competence • Each regional PES coordinates its own cells • Coordination by sub-region • Cooperation when workers from different regions are involved (24 cases until now)

8. Results

9. Volkswagen Brussels • Volkswagen factory in Forest (Brussels) restructured in early 2007 (to become Audi Brussels) • First and most important case (before the crisis) where a cell was set up • All 3 regions involved • Brussels coordinated the cell • 3.000 workers involved • 1,810 from Flanders • 1,309 from Wallonia • 190 from Brussels • 1 year of outplacement (> legal obligation) • After 1 year : 1,712 in a new job, 207 still in training

10. Critical assessment • Big step forward for changing attitudes towards restructurings • Good cooperation between actors • Results look good, but hard to evaluate • Complex legislation, practical complexities • “Waiting room” for early retirement ? • Reason to avoid collective dismissals (and fire workers one by one) ? • “Discrimination” of SME workers ?