Workers' Compensation a l'Europe
Settembrino, Francois, Risk Management
Prussian Chancellor Otto von Bismarck (1815-1898) is a well-known historical figure best remembered for starting the unification process in Germany. What is less known is the fact that he also served as a father of European social security. Although this article is not the place to develop the subject completely, we can concentrate on two principles he followed that continue to have an enormous influence on social policy in Europe today.
His first idea was to relate all social benefits to a worker's professional life. The amount of a retirement pension, for instance, was based on an employee's length of service. Other benefits were calculated as a fraction of an employee's retirement pension.
His second principle was to instill a strong partnership between employers and employees. Any change or modification to benefit programs had to be discussed between the partners, with the government playing, more or less, the role of referee. The majority of the social security systems in Europe still follow this model.
Lord Beveridge (William H. Beveridge, 1897-1964) expanded upon Bismarck's ideas through efforts to address England's unemployment problem. Under his approach, benefits were intended to ensure a minimal level of payments, funded by the state, that could be used for essentials like food and shelter. Benefit levels were not related to salary or other employment elements. The two main countries in Europe where Beveridge's ideas were implemented are the United Kingdom and the Netherlands.
Over the years, there has been a progressive intermingling of these two approaches. The Netherlands has maintained the Beveridge approach, granting benefits exclusively to residents. The United Kingdom has introduced some career-related supplemental benefits for retiring workers. Other countries relate benefit levels to a worker's salary, family status or the number of years of paid contributions.
From these two original foundations has emerged a workers' compensation system that is handled differently by the various European nations. In most, workers' compensation benefits are part of the social security system. They generally represent flat amounts or are based on an employee's salary, sometimes in relation to the number of service years. In Portugal, Finland, Denmark and Belgium, occupational accidents are covered through private insurance plans, but the benefits are not comparable.
After having worked very hard on a possible harmonization, the European Union (KU) has implemented only very specific rules, such as allowing immigrant workers to join the local system without losing the benefits accrued in their previous state plan. There are some coverage gaps in the Netherlands, such as medical expenses not being funded for employees above a certain salary ceiling.
In the majority of EU member states, workrelated accidents are handled by governmental agencies and are very often included in the social security scheme. Sometimes, as in Germany, enterprises have to join an entity related to their industry sector. Few countries still use private insurers. At a time when many social security systems show signs of financial weakness, there is less enthusiasm for continuing to promote monopoly solutions. In Belgium, participants are happy with the existing system, and the state has never had to provide additional financial assistance. Bureaucracy is kept at a minimum, compensation is much more generous than in many social security nations and capitalization principles have provided sufficient funding for future pensions.
Compensating Belgian Workers
Until the end of the past century, occupational accidents in Belgium were compensated only if a worker was able to demonstrate an employer's liability under the civil code. Because this system was never easy to implement and involved very long delays, Belgian officials realized that the liability structure had to be replaced with a strict no-fault system in which payments were made automatically and rapidly. …