Social dialogue in Belgium

1. Social dialogue in Belgium Compromise between the social state and the liberal state Origins of theBelgian system Organization of the Belgian system Central Economic Council of Belgium Example of work of CEC

2. 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

3. Compromise between the social state and the liberal state • 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

4. Compromise between the social state and the liberal state • 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.

5. 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

6. 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

8. 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 sectoralcommittees) after the approval of CNT and CCE • Conditions of representativity of employers’ and workers’ organizations (number of member associations, at the national level)

9. Intersectoral level annual report CCT advice advice 9

10. Central economic council functions • 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

11. Central economic councilobjective 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

12. Central economic councilsecretariat: 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

13. Central economic councilorganization

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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?

21. Wage policy Acceptance 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)

22. 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.

23. Work of CCE today • Climate changes – energy policy • Sectoral analysis (situation; competitiveness; employment) • European policy • Competition policy • Social – economic policy

24. 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)

25. 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)

26. Legal framework of wage policies • Objective: • Employment promotion • Two 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

27. 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

28. Legal framework of wage policies • Margin 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

29. 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

30. 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

31. 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