What do ING and Delhaize have in common? Both major companies are going through a transformation that is making many employees redundant. Both avoid any collective dismissal. As is generally known, Delhaize is organizing a large-scale privatization of its stores. In commercial takeovers, store personnel automatically end up with the acquirers. Goodbye socially passive, without a single dismissal. The same with ING. The bank is going through yet another restructuring, but is paying its older employees up to four years’ wages to retire early and stay at home.
The moral of this HR story is that companies are doing everything they can to avoid the famous Renault law. In the aftermath of the sudden, unilateral closure of the Renault factory in Vilvoorde in 1997, a special law was intended to guarantee that no collective dismissals could take place without the prior agreement of a company union. In practice, this right of veto almost always means long and expensive rounds of dismissals and almost never an alternative transformation without collective dismissals. The fact that ING pays four years’ wages to farewell staff without a round of layoffs speaks volumes about those perverse effects.
The observation is also that the unions mainly use their position of power in collective dismissals to enforce high severance payments. Social peace in Belgium is literally bought with premiums on the way to the door. Paying for outplacement, guidance and activation exists because it is partly legally required, but it is no more than an echo, the appendix of a restructuring culture that remains a write-off culture. Even at Delhaize, where employees seamlessly transfer to the next employer, the size of premiums remains the remaining issue in the conflict. Or how the write-off culture of the Renault law is overtaking an operation that intrinsically had everything to be about career culture: about the question of what support a large employer can offer to ex-employees in a new phase of their career.
However, a career culture is desperately needed. Everyone now knows the demographic reality of an aging population, the increasing labor shortage and the structural mismatch between vacancies and job seekers. We should use every corporate restructuring opportunity to invest maximally in people and their careers. We do the opposite. Unions have been resisting a policy agenda for working longer for decades. They can enforce that agenda on the factory floor, thanks to the Renault law. Employer organizations have been advocating for longer working hours for decades, but when push comes to shove, employers on the ground do the opposite out of necessity.
The perverse effects of so many depreciation precedents are a pernicious labor market culture that older workers like out treats. Trade unions that fight for heavy dismissal premiums, employers that fold and even subsidize inactivity: they all project the image of the written-off over-55s. All sustain the latent and manifest age biases that cultivate both ageism and job fatigue. Even the discouragement of heavy taxes on pseudo-early retirement payments cannot compensate for this. Paying to quit remains the path of least resistance.
After so many disillusions, those who believe in developing talent and quietly hoping for a simple ban in modern careers. However, the opposite seems more realistic. Legislative proposals take advantage of the conflict at Delhaize to extend the Renault law to smaller restructurings and franchising. If a Delhaize law is also introduced, it threatens to further exacerbate the perverse write-off culture in our country.
The author is a strategy consultant, teaches at Ghent University and is a fellow at the Itinera Institute in Brussels. www.marcdevos.eu