Collectively agreed wages in Belgium

Guy Van Gyes, Sem VandekerckhoveHIVA-KU Leuven

CAWIE KICK OFF MEETING23-24 January 2012, Leuven

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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)

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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, …)

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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 excluded6

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, 314, 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

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Components of conventional wages

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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

0.51

1.52

2.53

3.54

4.55

Real wage increase Indexation

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

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