Time for dessert

  • The government is looking into the salary gap with our neighbors.
  • And the 1996 law that regulates negotiations between social partners.
  • The “kern” is expected to meet on Tuesday. Tension is possible.

Following the coronation festivities, the main course of a busy July, the government is serving up dessert: salary gaps and the 1996 law. Nothing too heavy. After the gains made on worker-employee notice of dismissal in the 2013 and 2014 budgets, the state reform and the special financing law, confidence is at a high, and there is no doubt about concluding a compromise. The issue is, however, more dense than it first appears.

The government must tackle reforming the 1996 law. Its goal is to preserve Belgian private sector competitiveness. It will determine how the difference in salaries will be calculated between Belgium and its main neighbors and how to react if the gap widens too much.

Two options are on the government’s table. Either the terms of the law are strengthened, leaving few choices for the social partners during the next interprofessional agreement (AIP), or some latitude is left to give more flexibility during their meetings. According to our information, this will be the topic of discussion on Tuesday for a restricted council of ministers (known as a kern).

Management and unions have been bickering about this gap since last fall. The former even called it a handicap due to the width of the gap. The latter counters stating that the gross numbers need to be weighed in view of public aid given to businesses that adjust the cost of salaries against that of our main neighbors. To get everyone to agree, the government entrusted a group of experts, including those from the planning bureau or the National Bank, with the mission to calculate this salary gap. Last week they submitted their report.

Related to the large Belgian loan?

In 2012, the gap was 5.1%. This takes into account the employer social security (ONSS) contribution reduction. The first debate will focus on whether to include other types of public assistance prior to ending the gap. Next, the government will need to discuss the 1996 law to decide if its framework mechanisms need to be revisited, and how and at what rate to correct any potential drift in wages.

Next, we’ll wait until summer’s over. Come fall, the social partners will receive a series of numbers from the Central Economic Council. They will split up into work groups to study these numbers. Around the end of the year, they should have been able to define the operating margin in which salary raises can be negotiated in time for the next interprofessional accord (IPA).

This issue has reignited tensions within Di Rupo’s cabinet between left and right, which had been on hold during the changes in the kingdom.

So, everyone is staying quiet before the “kern.” Some say that this issue could very well be related to another one in negotiation – the one regarding a big popular loan. This is a banking product, a bank or certificate or investment bond (in the form of a state bond) to steer Belgian savings toward institutional or business financing. It’s a way of dealing with both issues at once – just like stuffing a suitcase before vacation.


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