Government reaches agreement on pay rises for private sector

Government reaches agreement on pay rises for private sector
Labour minister Pierre-Yves Dermagne and prime minister Alexander De Croo. © Belga

The federal government has managed to bring together representatives of workers and bosses to reach an agreement on pay rises for the next two years in the private sector.

The government decided to take over the negotiations after the two sides reached a stalemate. Employers were adamant they should stick to the maximum advised by the federal planning bureau: 0.4% increase over the next two years.

Union representatives, unsurprisingly, found such an increase inadequate.

The decision to take over the reins of the dispute places the government in a difficult position. The coalition is essentially made up of conservatives on one side (Open VLD and MR) and socialists on the other (PS, Vooruit). A configuration that echoes that of the two sides at loggerheads.

Vooruit president Conner Rousseau then came to the table with a threat: if workers could not have more pay, then steps would be taken to stop shareholders from receiving dividends when that question had to be decided.

Finally, the logjam was broken by a typical compromis à la belge: the pay ceiling would remain at 0.4%, but companies who have been doing well – and not all are buckling under the weight of Covid-19 – would be allowed to offer their staff a one-off premium worth up to €500 net.

Quite how the premium will work in practice remains a mystery. Employers had suggested a premium of ‘several hundred euros’ from companies whose takings had gone up 30% or more. Unions found that too little and too narrow.

The unions in turn suggested the premium be negotiated on a sectoral level, where they would have more collective strength.

In the end, the government came down on the side of negotiation on a company level, and left the question of how much and who should pay open.

It could be, unions have now warned, that the question of premiums could lead to disputes within companies.

Meanwhile, in another inconclusive decision, the government said the federal minimum wage should be increased, ideally in stages. Details remain missing, though the government did raise the possibility of lowering some of the wage costs to business to help pay for the increase in minimum wage.

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