Three years later, in line with the business strategy, Meteor was set to open a unit in mainland Europe and a site near Brussels had been chosen. Sarah was successful in her application to become the HR Manager for the site, her good knowledge of French being a crucial advantage. In setting out her human resources plan, she was aware that the system of pay determination and other HR practices in Belgium was highly centralised and regulated. The consensual nature of industrial relations was pivotal with the social partners in constant contact with each other through bipartite national and industry bodies, such as the Central Economic Council. Belgium’s very open competitive stance this was reflected in the exchange of information between the partners, which has lead to reasonably harmonious agreements to protect jobs and guarantee incomes.
Sarah knew that she would have to work within national agreements reached in areas such as the average monthly minimum guaranteed income, introduced in 1975, which is linked to the national monthly consumer price index, and wage rates for employees under 21, both of which applied to the whole of Belgium. As a new employer, she needed to discover which, if any, national agreement had been reached in her industry over minimum rates as she learnt that such agreements, unlike the UK, were legally binding and which were also indexed. Her research found the appropriate national agreement and she was relieved to see that the indexation only applied to those employees on the national minimum wage.
These agreements were reached through sub-committees of the National Labour Council that dealt separately with agreements for blue and white-collar employees. For Sarah, this distinction provided difficulties as, in the UK, terms and conditions were harmonised without such a distinction. The national agreement produced considerable financial implications to the company for the transfer of blue-collar employees to white-collar status, due to higher payments for sickness and redundancy. Another issue she needed to carefully consider was the traditional nature of pay increments where some industries had as many as 20 automatic increments for white-collar employees from age 21 to 55. She found that it was a standard convention for most employees to receive a Christmas bonus equivalent to an additional month’s pay. In fact, some senior employees in her industry were entitled to a 14th month’s pay as well! There was also a minimum notice period of 28 days for blue collar workers.
Holiday entitlement was, she found, around the same as the UK in general but the payment surprised her in that most of the holiday had to be paid at double the wage rate. The outcome was that blue-collar employees receive a minimum of a total of 7 weeks and 2 days pay for 4 weeks leave. Sickness payments were also more generous for the employees in that minimum entitlement for all employees is one month, mostly paid by the employer, followed by the state sickness benefit, that pays around 60% of former earnings, although this figure is capped. From 1999, the statutory working week was reduced to 39 hours without loss of pay. There were complicated rules which restricted Sunday working. Considerably fewer employees had company cars, however, which relieved Sarah of a potential headache in terms of allocation and expensing. She was relieved that payment for managers and senior technologists remained outside of the scope of such agreements.
Also in her plan was the establishment of the Works Council, which was obligatory where there was more than 100 employees. She had no experience of such a body and spent some time fixing visits to see Councils in operation in the UK and Belgium, made through personal networking and the CIPD International Forum.
Overall, she was aware that the costs of employment were high as the employers’ social security contributions were in the order of 25%, almost double the equivalent costs in the UK.
