Metal sector: Possibility to exchange industrial year-end premium

The social partners within the metal sector (i.e., Joint Committee (JC) 111 for blue-collar workers, and JC 209 for white-collar workers) have reached a sector agreement for the 2023-24 year, which includes the possibility to exchange a part of the industrial year-end premium for a leased bicycle and/or extra vacation days.

Background

Currently, the sector collective labour agreements (CLAs) in JC 111 and JC 209 addressing the year-end premium do not allow its conversion; instead requiring it to be paid in cash. This means that it is not possible to convert all or part of the year-end premium into a budget “pot” that can be used in a flexible benefits plan to spend on other benefits, whereas some other industries have included this option in their sector CLA.

However, as from the 2023 year-end premium this is due to change with the new sector agreement. At present, the possibility for conversion is limited to companies within the metal industry where the premium amounts to at least a full monthly salary. The company must have a place of business in the Flanders region (however, the agreement in JC 209 also foresees a possible extension for companies with places of business in multiple different regions, including Flanders).

Conditions    

A company falling under the scope of JC 111 or JC 209 can decide to convert a maximum of 50% of the year-end premium, in which case a company labour agreement should be concluded. This conversion must be cost neutral for the company. 

By doing so, employees can voluntarily choose to exchange the budget pot for a leased bicycle and/or additional vacation days. The individual’s choice should be recorded in an annex to the employment contract. If the employee does not opt for an alternative benefit or has remaining budget, this would still be paid out in cash.

Finally, the employees should be informed in advance of the consequences of converting the year-end premium.

Potential impact for your workforce

This new sector agreement is a unique opportunity to provide employees with a more flexible, individualised salary package, enabling them to set their own priorities and needs. Using a part of the year-end premium as a budget in a flexible benefits plan is easy to communicate to employees and can of course be combined with other budgets. When implementing the new scheme, the relevant union representatives should be involved.