Interprofessional agreement 2011-2012 - Part 2

The draft Interprofessional agreement (IPA), as described in our newsletter of 31 January 2011, was finally rejected by several trade unions.

Further to this refusal, the caretaker government needed to fix the salary norm which consequently becomes “binding” and impossible to deviate from, whether at sector, company or at individual level.

In its advice of 3 March 2011, the State Council expressed doubt on whether the caretaker government possessed the legal power to fix this salary norm. The latter nevertheless decided to fix this norm by Royal Decree (1).

This means that the total salary cost in 2011 can only increase with indexation and salary scale increments. In 2012, the total salary cost will only increase by max. 0.3% after indexation and salary scale increments.

In order to deviate from the system’s rigidity on a collective or individual level, an optimal use of exceptions will be necessary (e.g. promotions). Alternatively, the existing salary cost can be optimised by applying different remuneration methods (e.g. the introduction of a non-recurring result-tied bonus plan replacing the ordinary collective bonus plan).