BEERG Newsletter - Belgium: Delhaize saga continues

Three weeks after the management of the Belgium supermarket chain Delhaize announced that it intended to franchise out the 128 stores it currently runs directly, around 100 of them are still closed as workers and their unions protest the decision. 9,200 employees are potentially impacted. 

Responding to the Delhaize management announcement, the Socialist Party has now proposed legislation that would see franchisors continue to have responsibility for working conditions in franchised operations creating what would be called in the US a “joint employer” framework. The legislation envisages the franchisor and the franchisees negotiating jointly with unions on pay and working conditions.

It is unlikely that the legislation will be adopted as liberal and centre-right parties have announced their opposition, as have multiple employer groups. They say it would undercut the very raison d’etre of franchising which is to enable franchise management to respond flexibly to local competitive circumstances. For unions, the fragmentation of the Delhaize employees into 128 “mini companies” creates considerable organisation problems with many of the individual stores falling below the threshold which mandates the establishment of a works council. (Here in French €)

The unions argue that what Delhaize wants to do would lead to the “Uberisation” of the entire retail sector in Belgium. But, as we said in last week’s issue, in a social market economy, it is management that decides on what model is appropriate for its business, not unions or works councils.