Belgium's government set to propose wage deal as social dialogue hits stalemate

On Tuesday, the Belgian federal government mediated between unions and employers who are struggling to reach an agreement on wage increases. As the so-called wage norm is causing a stalemate in the country's social dialogue, the government is now set to draw up its own wage deal proposal.

In late October, Belgian unions and employers sat down for the first round of their traditional two-yearly negotiations on wage and working conditions. The country has a strong tradition of social dialogue in which acknowledged representatives of workers and employers jointly determine labour policy. This time around, however, the exceptional economic situation is making a deal seem far out of reach.

The main divisive issue is Belgium's so-called wage norm. This norm defines the maximum allowed increase in labour costs to ensure that Belgium remains competitive with its neighbouring countries. The wage norm concerns wage increases on top of Belgium's automatic wage indexation, which makes wages rise along with the overall cost of living.

According to Belgian employers, there is absolutely no room for wage increases on top of wage indexation over the next two years. In turn, the unions categorically disagree with a wage norm of 0% proposed by employers. They point out that many companies are doing well despite economically tumultuous times and that there should be room for wage negotiations in those cases.

On Tuesday, Belgian Prime Minister Alexander De Croo (Open VLD, Flemish Liberals) and his deputy prime ministers invited the country's leading social partners to explain their positions and formally noted that the social partners could not reach an agreement. The government is now taking up the matter itself and will draw up a wage deal proposal.

The government's proposal intends to respect the wage norm law, meaning that wages will not be allowed to rise above the index for the next two years. To meet unions' needs, they are consider a one-off voluntary wage premium on which employees and companies in sectors that are doing well could make their own agreements. Neither unions nor employers showed much enthusiasm for the premium proposal, however.

(KOR)

^{Belgium's federal government and social partners meeting in Brussels on 15 November 2022 to discuss wage and working conditions © BELGA PHOTO HATIM KAGHAT}