The summer of 2021 has proved exceptional in that it produced a surfeit of employment-related measures. A Royal Decree of 30 July 2021 set the maximum margin for salary cost increases for the period 2021-2022 at 0.4%. Two weeks earlier, employer and employee representative organisations within the National Labour Council entered into no fewer than 10 collective bargaining agreements, covering such topics as temporary unemployment, unemployment with company benefits (so-called “bridging pension”) and supplementary pensions.
In this article, we focus on two specific topics, namely the wage increase margin for 2021-2022 and the harmonisation of supplementary pension schemes.
Wage increase margin for 2021-2022 set at 0.4%
What is the wage increase margin?
The wage increase margin determines the maximum increase of salary costs over a two-year period on the basis of the increase in salary costs in Germany, France and the Netherlands. Limiting the increase of salary costs ensures that the Belgian economy does not suffer a competitive disadvantage vis-à-vis its neighbours.
No agreement between employer and employee representative organisations
The wage increase margin is normally set by employer and employee representative organisations, as part of the interprofessional agreement (cross-industry agreement negotiated every two years). These discussions take place following the completion by the Central Economic Council of a technical report on the maximum available margin for the evolution of salary costs (based on a comparison with neighbouring countries). For the period 2021-2022, employer and employee representative organisations failed to reach agreement on the wage increase margin.
Wage increase margin set at 0.4% by Royal Decree
In the absence of an agreement between employer and employee representative organisations, the wage increase margin was set at 0.4% by Royal Decree of 30 July 2021. As a result, in the period 2021-2022, the average salary cost for each employer may be increased by a maximum of 0.4%.
Individual salary increases over 0.4% are still possible, as long as the average salary cost increase within the company does not exceed 0.4%. Automatic indexation of salaries (aimed at reflecting consumption price index increases) and increases merely due to the application of wage scales are not included in the maximum margin of 0.4%.
Companies giving salary increases in excess of the wage increase margin are liable to be sanctioned with administrative fines - at least in theory. In addition, agreements including salary increases contrary to the wage increase margin can be declared null and void by the courts. Companies are therefore advised to closely monitor the evolution of their salary costs for the period 2021-2022.
Harmonisation of supplementary pensions
Extension of harmonisation deadline between pension regimes applicable to blue-collar workers and white-collar employees
Whilst very common in practice, differences in the treatment of blue-collar workers and white-collar employees have been a subject of controversy for years. In the context of pensions, it was not unusual for employers to implement different supplementary pension plans for the two groups, with blue-collar populations usually being disadvantaged compared to white-collar populations.
In 2014, the Belgian legislator moved to harmonise pension regimes, with the following phased approach:
- As from 1 January 2015 until 31 December 2025, differences in the treatment of blue-collar workers and white-collar employees would still be tolerated under certain conditions: the employer would have to be able to demonstrate that it was taking steps towards a full harmonisation process);
- As from 1 January 2025, supplementary pension plans (whether at industry or company level) may no longer establish distinctions between blue and white-collar populations. Any distinction based on this criterion would be deemed discriminatory.
Employer and employee representative organisations have now formally confirmed in a collective bargaining agreement of 15 July 2021 that they wish the full harmonisation deadline to be deferred until 1 January 2030. The Belgian Supplementary Pensions Act of 28 April 2003 must still be modified to reflect this deadline extension.
0.1% of the future wage increase margin used for the harmonisation of supplementary pension schemes
In addition, from 1 January 2023 onwards, at least 0.1% of the available wage increase margin is to be used to achieve the harmonisation of the supplementary pension schemes for blue-collar and white-collar employees in industries and employers where this is necessary. For the employers concerned, this will, in practice, further restrict the ability to increase salaries of white-collar employees, since a mandatory portion of the available margin will need to be used to improve the, often less advantageous, pension plans for blue-collar workers.