Collectively agreed wages in Belgium Guy Van Gyes

Collectively agreed wages in Belgium Guy Van Gyes, Sem Vandekerckhove HIVA-KU Leuven CAWIE KICK OFF MEETING 23 -24 January 2012, Leuven 1

Wage formation in Belgium • Cumulative system – National > sector > company > (employee) • Always in joint committees • Trade unions: ABVV, ACLVB, ACV • Employers: VBO, Farmers’ association, small entrepreneurs, social profit • Juridic significance • Covering almost all employees (extension) 2

National level • National council of labour (NAR) – Minimum wage • Collective labour agreements (CAO) • Welfare fixed • Ad hoc raises (last: October 2008) – Broad lines of employment conditions • Eco-cheques: net benefits to spend on ‘green’ products and services • Non recurring performance pay • Central council for the economy (CRB) – Wage norm • • Inter-sectoral agreement (IPA) Upper limit for wage raises Two year period Usually in percentage, exception: 2009 -2010 (250 EUR) – Training, etc. 3

Sector level • Joint labour committees and subcommittees – Following an IPA – Collective labour agreements (CAO) – Index mechanism • Year to year (monthly to every two years) • 2% indexation – Margin for company agreements: • Normal agreements: indexation + real wage increase • All in agreements: real wage increase depends on indexation • Enveloppe systems: composition of earnings to be decided at the company level (e. g. net benefits/cheques versus gross raises) 4

Company level and below • Company agreements – – Agreement is generally not registrered Supplementary to sector agreements Implementing sector agreements Replacing sector agreements: de facto when a company classification system is used • Employee agreements – Rare for most employees – Generally a bonus, extra days off, working times, … – Employees with individual bargaining power: fringe benefits (car, shares, …) 5

Measuring collectively agreed wages • Holding institution: ministry of labour (FOD WASO) • Index of conventional wages (ICL) – Since 1958 – Published monthly based on CAO’s • Statistic – By employee class (blue/white collar), for the whole economy and by sector – Sector figures are derived from joint committees • Components – Indexation – Wage change relative to the average of wage scales in the base year – Change in working time (blue collar only) • Company agreements are excluded 6

Centralization Degree Joint committee 1 Inter-sectoral 218, 305, 318, 319, 329 2 Sector, company exceptions 106, 118, 119, 121, 124, 130, 140, 201, 226, 303, 304, 317, 327 3 Sector, company additions 112, 120, 149. 01, 149. 04, 202, 214, 311 4 Sector, company implementation 105, 111, 209, 224 5 Sector, company suppletion 115, 116, 207, 220, 310 6 Company 100, 104, 200, 210 7

Components of conventional wages 5 4 3 2 1 0 2001 2002 2003 2004 2005 Real wage increase 2006 2007 2008 2009 2010 Indexation 8

Quirks • Note Esteban Martinez • Company level remains a black box – Select company agreements > 3000 white/blue collar workers • Composition effects unknown – Changing jobs distribution – Changing age distribution (seniority effect) – Profile shifts could be followed per sector • Moving of wage components from salary to extras – To avoid surpassing the wage norm – Linear bonuses could be included • Sum of white and blue collar collective wages skewed by working time – Measuring white collar working time • Best option: collecting individual conventional wage information 9