Europe - DLA Piper

Transcription

Europe - DLA Piper

Europe Materials
United Kingdom
Government Action On Holiday Pay Claims………………………………………2
Holiday Pay: The Verdict…………………………………………………………..6
EAT Hears Holiday Pay Appeals…………………………………………………..8
One Month Countdown To Shared Parental Leave………………………………...9
Woolworths Redundancy Appeal Referred to ECJ……………………………….10
France
France Amends The SYNTEC Collective Bargaining Agreement……………….11
Germany
Minimum Wage From 1 January 2015 – Part I…………………………………..13
Minimum Wage From 1 January 2015 – Part II………………………………….15
Legislative Reforms Regarding Family and Medical Leave Imminent…………..16
International Labor & Employment Law Committee Newsletter………………...18
Belgium
Be Global Special Report – Belgian Employment Law Reforms 2014…………..20
Special Be Aware Employment Flash – New Obligation To Motivate Dismissal
Reasons……………………………………………………………………………35
Special Be Aware Employment Flash – Fundamental Reform Of Belgian
Employment Law As Of 1 January 2014………………………………………....39
NEWS AND VIEWS FROM DLA PIPER'S EMPLOYMENT LAW TEAM
Government action on holiday pay claims
Categories: Employment
18 December 2014
BIS has announced this afternoon that a statutory instrument is being laid before Parliament to limit back pay in holiday pay claims to a maximum of two years.
The limit will apply to claims brought on or after 1 July 2015. Click here for a copy of the press release.
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V.UK
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Press release
Government tackles businesses' concerns
over holiday pay ruling
From:
Department for Business, Innovation & Skills
(https://www.gov.uk/governmentiorganisations/department-for-business-innovation-skills) and
Advisory, Conciliation and Arbitration Service
(https://www.gov.uk/government/organisations/acas)
First published:18 December 2014
Part of:
Making the labour market more flexible, efficient and fair
(https://www.gov.uk/government/policies/making-the-labour-market-more-flexible-efficient-andfair) and Employment (https://www.gov.uk/governmentitopics/employment)
Government has taken action to reduce potential costs to employers and give certainty to workers on
their rights on holiday pay.
The government has today (18 December 2014) taken action to
reduce potential costs to employers and give certainty to workers on
their rights following the recent court decisions on holiday pay.
Last month the Employment Appeal Tribunal ruled that holiday pay
should reflect non-guaranteed overtime.
The government recognises the decision of the court and is today
taking action to protect UK business from the potentially damaging
impact of large backdated claims. Changes made to regulations
under the Employment Rights Act 1996 will mean that claims to
Employment Tribunals on this issue cannot stretch back further than
2 years.
Workers can still make claims under the existing arrangements for
the next 6 months which will act as a transition period before the
new rules come into force. The changes apply to claims made on or
after 1 July 2015.
•
Following the recent Employment Appeal Tribunal ruling,
government set up a taskforce of representatives from government
and business to assess the financial exposure employers face and
how to limit the impact on businesses.
Employers and workers can also visit Acas
(http://www.acas.org.uk/holidaypay) for the latest free Acas advice on
holiday pay.
Notes to editors:
1. The judge in the recent UK Employment Appeal Tribunal case
of Bear Scotland versus Fulton ruled that holiday pay should
include non-guaranteed overtime.
2. Non-guaranteed overtime means overtime that employers are
not obliged to offer but a worker has to work if it is offered.
3. Regulations to limit claims for unlawful deductions from wages
to 2 years have been laid today (18 December 2014). The
rules apply to Employment Tribunal claims made on or after 1
July 2015. Claims made before this time follow current rules.
4. The taskforce is considering the impacts on business. While
the government discussed these changes with the taskforce,
they do not represent a direct output of the taskforce's work.
The taskforce continues to work through the implications. The
business representative groups on the taskforce are:
Confederation of British Industry (CBI)
• EEF, the manufacturers Organisation
• Federation of Small Businesses (FSB)
Institute of Directors (loD)
• British Chambers of Commerce (BCC)
• British Retail Consortium (BRC)
Civil Engineering Contractors Association (CECA)
• GC100 - General Counsel and Company Secretaries
working in FTSE 100 companies
5. The Department for Business, Innovation and Skills (BIS)
chairs the group. Relevant government departments also
attend. BIS is also engaging with a wide range of interested
parties.
6. Employers and workers can also get free advice and support
from the Acas Helpline Online
(http://www.acas.org.uk/helplineonline)
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Holiday pay: the verdict
4 November 2014
The Employment Appeal Tribunal (EAT) has today handed down judgment in the closely observed holiday pay appeals in Bear Scotland v Fulton and Baxter,
Hertel (UK) Ltd v Wood and others; and Amec Group Ltd v Law and others (the UK Holiday Pay Claims). DLA Piper acted for Bear Scotland. The decision of the
EAT will lead to higher wage bills for many employers in the future, but the judgment significantly limits the potential for back pay liability.
The decision of the EAT is that many elements of pay which are currently excluded from the holiday pay of many workers must be included. However, any claims
in respect of underpaid holiday pay in the past are only possible to the extent that no more than three months elapsed between any such underpayments.
The holiday pay claims arise because of an apparent conflict between UK and European law as to how holiday pay should be calculated and in particular whether
elements of remuneration such as overtime and commission must be included. The Working Time Directive (Directive) entitles workers to 4 weeks' leave but does
not specify how pay should be calculated. The Directive is implemented in the UK by the Working Time Regulations 1998 (WTR). Under the WTR workers are
entitled to 5.6 weeks' leave and must be paid at the rate of a week's pay for a week's leave. The Employment Rights Act 1996 (ERA) sets out how to calculate a
week's pay; the calculation depends on a number of factors including whether or not a worker has normal working hours.
The effect of the week's pay provisions is that many common elements of remuneration, such as overtime, commission and bonus are excluded from statutory
holiday pay. However, in cases interpreting the Directive, the Court of Justice of the European Union (CJEU) has consistently stressed the need for normal
remuneration to be maintained during the period of annual leave. In a 2011 case (Williams v British Airways) the CJEU ruled that (1) workers on annual leave
should receive their normal remuneration and (2) normal remuneration entitled a worker to any payment which is intrinsically linked to the performance of the tasks
which he is required to carry out under his contract of employment. The CJEU held that it is then left to the national court to assess the intrinsic link between the
various components making up the total remuneration of the worker and the performance of the task he is required to carry out under his contract of employment.
In a subsequent decision, Lock v British Gas Trading and others, the CJEU restated the principle that holiday pay must correspond to normal remuneration and
held that commission must be included as otherwise the financial disadvantage suffered might deter workers paid on a commission basis from taking leave.
The UK Holiday Pay Claims concerned whether other types of remuneration, mainly overtime and some travel payments, should also properly be considered
normal remuneration and therefore be included in holiday pay. There were essentially three issues in contention in the EAT:
1. Whether the elements of remuneration in question fell within the types of payment which the CJEU in Williams said should be included in holiday pay;
2. If so, whether UK law could be interpreted in order to give effect to that; and
3. If there had been any underpayment of holiday pay, what constituted a 'series of deductions' from wages and in particular whether the series was broken by
the employee taking the additional 1.6 weeks' holiday under the WTR.
In respect of the three issues, the EAT held as follows:
1. Non-guaranteed overtime (that is, overtime which the employer does not have to offer, but the employee must work if offered) is part of normal
remuneration and must be included in holiday pay, as must any other payments which form part of normal remuneration including shift allowances and
comparable payments;
2. It is possible to interpret UK law in such a way as to produce that result; but
3. Payment for the additional 1.6 weeks' leave given by UK law but not the Directive will 'break' the series of deductions in any case where there is more than
three months between the employee taking the additional leave and taking Directive leave.
In respect of the first two issues, the EAT held that the decisions in Williams and Lock read together represented a settled view of the CJEU as to what payments
are to be included in the calculation of holiday pay under the Directive and were a natural development from earlier case law, all of which referred to the
requirement for normal remuneration to be paid during holiday. It had to be presumed that in enacting the WTR the UK Government intended to implement the
Directive fully and accurately.
The question of how far back the employees could claim in respect of underpaid holiday pay depended on whether each instance of underpayment formed part of
a 'series of deductions'. The EAT held that there were two requirements for a series of deductions; sufficient similarity to provide a factual link between the
deductions, and a sufficient temporal link. On the basis that claims in respect of unauthorised deductions must be brought within three months, the series is broken
if more than three months has elapsed between deductions. The EAT further said that the additional 1.6 weeks' leave provided by the WTR Regulations
(Regulation 13A leave) will be the last leave to be taken in any leave year. In practical terms, this means that claims for back pay will stop at the point at which
there is more than a three month gap between the 4 weeks' leave required by the Directive (Regulation 13 leave) and any subsequent Regulation 13 leave taken
by an employee: This should mean that in the majority of cases the claims for back pay will be limited to the current holiday year, or in some cases completely
extinguished.
What action should employers take now?
• The immediate effect is that the 4 weeks' leave required by the Directive (Regulation 13 leave) and the additional 1.6 weeks' leave provided by the WTR
( Regulation 13A leave) are to be paid at different rates. This will cause some administrative headaches for employers and in the long run the Government
may seek to remove the distinction between Regulation 13 and Regulation 13A leave; however, this is unlikely to be a legislative priority before the election.
Employers will need to decide in the short term whether to pay the holiday at different rates or equalise up to pay all leave at normal remuneration.
• Employers will need to consider precisely what needs to be included in the calculation of holiday pay le what constitutes 'normal remuneration'.
Many employers will need to decide how to deal with existing claims. Unions have already filed a substantial number of claims for underpaid holiday pay,
which have been stayed pending the outcome of the appeal cases. The decision of the EAT may provide an incentive to settle claims, as the potential for
back pay is now limited.
• .1 the longer term, employers will need to look at how they structure working arrangements in order to minimise the increased liability for holiday pay.
Options might include offering voluntary overtime instead of non-guaranteed overtime, using bank or agency staff to cover periods of increased demand
rather than offering permanent staff overtime, revising commission plans to schedule payments at a time which impacts less on Regulation 13 leave and
preventing leave from being taken at certain times of year.
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EAT hears holiday pay appeals
6 August 2014
Kate Hodgkiss, a Partner in our Edinburgh office, comments: At the end of last week the Employment Appeal Tribunal (EAT) heard complex legal arguments in the
appeals in Bear Scotland and Hertel/Amec; better known as the holiday pay cases. The appeals will determine primarily (i) whether overtime should be included in
the calculation of holiday pay and (ii) if so, whether employers should be liable for back pay, possibly over a period of several years.
The EAT had to consider 3 main issues:
1. Does Article 7 of the Working Time Directive require overtime to be included in holiday pay?
2. If so, can UK law be interpreted in such a way to give effect to this?
3. If holiday pay has been incorrectly calculated as a matter of EU law, does the fact that some holiday pay payments made under UK law will have been
lawfully calculated 'break'the series of unlawful deductions such that claims for back pay are limited?
The EAT heard arguments on these issues from counsel on behalf of both the employers and employees.
Article 7
The issue of what should be included in the calculation of holiday pay arises from a decision of the ECJ, Williams v BA. In many cases UK law currently excludes
payments such as overtime, commission and bonus from holiday pay. However, the ECJ in Williams said that a worker is entitled, during his annual leave, not only
to the maintenance of his basic salary, but also, first, to all the components intrinsically linked to the performance of the tasks which he is required to carry out
under his contract of employment and in respect of which a monetary amount, included in the calculation of his total remuneration, is provided. Following Williams,
the question arose what types of payment are 'components intrinsically linked to the performance of the tasks required under the contract of employment. In Lock
v British Gas the ECJ held that commission should be included.
In the EAT in Bear/Hertel/Amec, lawyers for the employers and for the Government argued that Article 7, as interpreted in Williams, does not require overtime to
be included, either because it is not intrinsically linked to the performance of tasks required under the contract where the employer is not required to offer overtime,
or because Williams should be interpreted restrictively as only applying to supplementary payments.
Lawyers for the claimant employees, on the other hand, argued that overtime is plainly normal remuneration and should be included.
Interpretation of EU law
UK courts are under an obligation to interpret UK law as far as possible in compliance with EU law. As such, if Article 7 does require overtime to be included, the
court needs to examine the Working Time Regulations and Employment Rights Act to determine whether they can be read in a way which gives effect to EU law.
Lawyers for both the employees and the Government argued that UK law can be read in this way, although they were arguing for different interpretations of the EU
law (see above). Lawyers for the employers, however, argued that it is simply not possible to interpret UK law in this way; in this respect, they rely on 2 main
arguments (i) that employers thought they were complying with the law when excluding overtime from holiday pay and to retrospectively put them in breach of the
law would be in breach of the principle of legal certainty; and (ii) it is not possible to read words into the Working Time Regulations in order to give effect to Article
7 as this would make the scheme of the Regulations unworkable.
Series of deductions
The final issue is whether the claims were in time. The claims have been brought under the unauthorised deduction from wages provisions of the Employment
Rights Act 1996. A claim may be brought within three months of an unauthorised deduction from wages, or, if there is a series of deductions, within three months
from the last in the series. Lawyers for the employers sought to argue that as Williams only affects the 4 weeks' basic statutory entitlement, each time the
employees took the additional 1.6 weeks' leave provided under Regulation 13A of the Working Time Regulations, they were paid the correct holiday pay and this
broke' the series of deductions. That would limit, possibly even extinguish, much of the liability for back pay. However, the claimant employees argue that there
could be a series of deductions linked by a common feature even when the series is interrupted by payments of a different type.
Interestingly there was very little argument regarding how far back the employees might be able to claim; counsel for the Government suggested that any
deductions further back than six years would be out of time but this argument was not developed.
Where does this leave us?
Judgment is expected in October/November but it is possible that the judge may wish to make a reference to the ECJ. Whatever the outcome, it is also likely that
there will be an appeal. This could complicate matters still further, as an appeal in Bear would go to the Scottish Court of Session, whereas an appeal in
Hertel/Amec would be to the Court of Appeal. However, the EAT decision may give employers some indication of the direction of travel and may provide some
indication whether there is any opportunity to limit liability pending a final determination of the issues.
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One month countdown to shared parental leave
31 October 2014
Clare Gregory, a Partner in our Sheffield office comments: There has been increasing publicity recently about the new shared parental leave regime which will,
from 1 December 2014, for the first time, allow parents to share up to 50 weeks' leave. This is one of the most radical of the Government's recent employment law
reforms and will undoubtedly have a significant impact on both employers and employees. It completely overhauls the existing system of maternity and paternity
leave for those parents who wish to share leave with their partners. Features of the new regime of particular note are that couples can take leave together or
separately; leave can be taken in a continuous block or in discontinuous blocks of one week at a time; and an employee can vary the leave dates they have
requested up to a maximum of three times.
Most employers are already broadly aware that family-friendly rights are facing the biggest changes ever seen, however, many have yet to realise how soon they
might feel the impact of the implementation of shared parental leave (SPL). The majority of the new regulations will come into force on 1 December 2014 and will
apply to parents expecting a baby on or after 5 April 2015. This means that any eligible employees who have become pregnant since July 2014 or who become
pregnant from now will fall under the new regime and be entitled to share up to 50 weeks' leave. There is therefore only a matter of weeks left to get systems in
place.
Employers should be taking steps to put in place appropriate policies and procedures so that they are able to inform employees about their rights and obligations.
It will also be essential to train staff and managers on the new regime. The legislation which has been published to date is complex and places onerous burdens
on both employers and employees which means that understanding and implementing the new regime is not going to be straight forward.
The top three areas we anticipate are likely to cause headaches for employers are:Enhanced pay
The new rights raise questions about how employers should deal with pay during shared parental leave, particularly where they offer a scheme of enhanced pay
during maternity leave. Addressing this appropriately will be key to maintaining good employee relations and ensuring that there is no discrimination. However,
the legal issues in this area are not straight forward and employers should therefore tread carefully in making any decisions.
There is the potential for direct discrimination in relation to pay if an employer offers an enhanced maternity pay scheme but does not mirror those provisions in a
shared parental pay scheme. Potentially a man on shared parental leave could seek to compare himself to a woman on maternity leave and argue that he is being
treated less favourably because he is not entitled to enhanced pay. This is a particular risk in light of the removal of the exclusivity of maternity leave for women leave is now interchangeable after just 2 weeks which gives rise to the argument that a man taking SPL at any time after 2 weeks should be entitled to the same
pay which a woman would receive if she was on maternity leave at the corresponding point in time. There are also potential claims for indirect discrimination, for
example if the shared parental pay policy disadvantages more men than women — which it may because women will have the choice as to whether to continue on
an enhanced maternity scheme whereas men will not.
Discontinuous periods of leave
Under the new regime, employees will be permitted to request either a continuous period of leave or discontinuous periods of leave in blocks of a week at a time.
Where a request is made for a discontinuous block of leave, the employer can either consent to the leave dates, suggest alternative dates or refuse the request.
Employers should put in place rigorous systems for dealing with discontinuous leave requests as they are only given two weeks in which to consider/discuss the
request with the employee. Given this very short time period, policies should specify exactly who such leave requests should be directed to in order to avoid the
risk of a request languishing in a manager's in-box and not reaching HR until the two week window has passed. Further, any refusal of a request for discontinuous
leave will have to be handled very carefully to avoid constructive dismissal claim and/or claims of discrimination where, for example, mens' and womens' requests
are treated differently.
Communications between employers
There will there be no central co-ordination of how the 50 weeks' leave is being shared between parents which has caused some employers to express concern
that there is a risk of both parents taking time that amounts to over 50 weeks in total.
The Regulations which have been published do not provide for any communication between employers. Instead, the provisions require each employee to comply
with detailed notice and evidential obligations, in which they must provide information about, and include signed declarations from, the other employee. Each
employee must also give the name and address of the other employee's employer. However, beyond this there are no provisions to facilitate communication
between employers. The notices to be given by each employee require them to tell their employer how much SPL is available and how much each parent
intends to take. As such the system could be open to fraud but the Government considers that the system of notices and evidence proposed is sufficient to
prevent/deter this.
A suggested approach for employers is, as part of their implementation plan, to produce detailed notification forms for use by their employees which assist them to
provide as much of the required information as possible. Forms and policies should also make clear that the employer will rely on the provided information; that
if any information is found to be untrue there is the risk of disciplinary action; and also that the employer will share information with other employers if asked to do
so.
BE AWARE UK
PIPER
Woolworths redundancy appeal referred to ECJ
23 January 2014
Alan Chalmers, a Partner in our Sheffield office comments: the Court of Appeal decided yesterday to make a reference to the European Court of Justice (ECJ) in
the controversial Woolworths/Ethel Austin collective redundancy litigation.
In USDAW v Ethel Austin (in administration) the Ethel Austin and Woolworths chains of shops had gone into administration resulting in their employees being
made redundant. The employees who were members of a trade union claimed protective awards for failure to consult collectively under s.188 TULRCA, which
provides that an employer is required to consult with appropriate representatives when proposing to dismiss as redundant 20 or more employees at one
establishment within a 90 day period. At the employment tribunal, only those employees who were employed at premises where 20 people or more were employed
succeeded in claiming protective awards. Those who worked at stores of fewer than 20 people failed in their claims. The union appealed to the EAT. The issue
before the EAT was whether s.188 was to be interpreted so as to omit the words "at one establishment" in order to give effect to the core objective of the EU
Directive on collective redundancies, allowing protective awards to be made to all employees whose employer dismissed 20 employees as redundant within 90
days. As reported in our Be Alert dated 2 July 2013, the EAT held that those words should be deleted. The consequence of this was that the Secretary of State
(and ultimately the taxpayer) was liable for the protective awards.
Not long before the EAT handed down judgment in Ethel Austin, a tribunal in Northern Ireland referred a similar case, Lyttle v Bluebird UK Bidco Ltd, to the ECJ.
That case concerned redundancies arising out of the administration of the Bon Marche chain.
In the Court of Appeal, the Secretary of State sought to argue that the appeal in Ethel Austin should be stayed pending resolution of the Lyttle case.
However, the Court of Appeal concluded that the appropriate course of action was to refer the case to the ECJ rather than stay the appeal. The Court took into
account the fact that the employees in Lyttle did not have legal representation and considered that the ECJ would benefit from the employees having legal
representation. In addition, the ECJ's judgment in Lyttle might not dispose of all the issues as the ECJ would also need to consider whether, if UK law is
incompatible with the Directive, the employees should be able to rely on the Directive against the Secretary of State in any event.
In the long term, it is almost certainly beneficial to employers to have a definitive resolution of this important issue. However, although it is possible that the ECJ
will join the reference with Lyttle and expedite it, given the importance of the questions raised, it is unlikely there will be a decision any time soon; the usual
timetable from reference to decision is around 18 months. In the meantime, the practical difficulties arising from the EAT decision continue. This case has
important implications for large employers with multiple locations, most obviously those in the retail, logistics and hospitality sectors. Whereas previously those
employers did not have to collectively consult until there were at least 20 redundancies at any one establishment, now they must do so if the overall number of
redundancies amounts to 20, wherever they occur. This can cause significant problems both in terms of recognising that the obligation has been triggered and in
arranging the consultation meetings if participants are at different locations. Collective consultation will be longer and more expensive for employers in this
situation.
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DLA PIPER
France amends the SYNTEC collective bargaining agreement
Employment Alert (US)
17 APR 2014
By: Ute Krudewagen I Frederique Sallee
Media worldwide — and especially in the US — have this week been reporting a new French law that supposedly prohibits employees from answering
emails after 6 pm.
The reporting on this issue has been misleading, however: there is no such new law in France.
In fact, what the media has reported as a change in legislation is simply an amendment to the national SYNTEC Collective Bargaining Agreement,
which was agreed between the relevant employer and trade union organizations on April 1, 2014. The amendment has not yet been extended by
ministerial decree to all companies falling within the scope of the Syntec CBA.
Despite the media hype, this amendment does not affect all French employees, but only those who work under the SYNTEC CBA and who
are subject to a specific working time scheme known as the "convention de forfeit fours."
Further, the amended CBA does not prevent employees from checking their email after 6 pm. What it does do is say that employees must disconnect
from remote working devices during mandatory rest periods and employers must ensure their employees are able to disconnect.
Background
The SYNTEC CBA applies to many technology companies, which employ a large number of executive employees under the "convention de forfait
tours" scheme. Under this scheme, an individual's working hours are not tracked by hours; instead they work a predefined number of days per year
(218 days) and their working hours are not calculated, thus excluding payment of overtime hours during those 218 days.
The requirement for the amendment to the SYNTEC CBA was triggered by a decision of the French Supreme Court in April 2013 (see our reports in
Be Global May and December 2013). In its decision, the court held that the part of the SYNTEC CBA permitting working time based on a
predefined number of days per year, rather than setting a weekly/monthly limit (e.g. 35 hours / week), was not compliant with EU law. In particular,
the court was concerned that there was insufficient protection of employees' health and safety built into the CBA (since they could "overwork"
excessively during those 218 days).
April 2014 amendment: greater employee protections
The recent amendment to the SYNTEC CBA addresses the problems with the CBA pointed out by French Supreme Court. The amendment
maintains the 218-day working time arrangement, but contains the following main requirements (which provide greater employee protection) for such
an arrangement to be valid:
• The 218-day arrangement is only permissible for an employee whose position is at least at level 3 of the executive classification (cadre), or whose
annual remuneration is more than twice the social security cap (2 x €37,548 = €75,096) or who is a corporate officer also holding an employment
contract.
• Also, the employee must have annual remuneration of at least 120 percent of the CBA minimum for his or her job grade, on the basis of the
218-day arrangement or on the basis of a company's internal forfait-jours arrangement (where the folfait-jours scheme is also implemented by a
company-level agreement).
• The employee must be in a role that has a large degree of autonomy and be fully responsible for the time he or she dedicates to work. The
employee must enjoy a large degree of latitude in organizing work and managing working time.
• An employee must enter into an individual agreement to work on the basis offorfait fours, so this should be included in the employment
contract or an amendment to it.
• The company must implement a tracking tool in order to count days worked and days off. This tool should be objective, reliable and also provide
for the employees input. To this end, the company should maintain a record of the number and dates of days worked; days off; paid leave; CBA
leave days and rest days.
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• Minimum rest periods of 11 consecutive hours per day and 35 consecutive hours per week continue to apply. These limits are not intended to set
regular 13-hour working days but to impose a maximum working day.
• The amendment to the CBA does not specify that employees may not check their email after 6 pm. What it does indicate is that employees must
disconnect from remote working devices during rest periods. Therefore, employers should ensure that necessary means are in place to ensure
employees can log off from these devices remotely but there are no specific practical requirements which the amendment stipulates must be put in
place to ensure that this happens. Some employers have systems in place, for example, which mean that external work systems are inaccessible
during rest periods so that while emails can be sent, they cannot be read outside working hours.
• The company must implement a separate tracking tool to ensure that daily and weekly rest periods are adhered to.
• Employees can renounce their right to rest days if the company pays increased remuneration (20 percent minimum up to 222 days and 35 percent
beyond), subject to an upper limit of 230 days of work per year.
• At least twice a year, the employee's workload must be reviewed in an individual meeting. The employee must keep the employer informed about
events that unusually increase the workload, and the employer must respond within 8 days setting out a proposed solution. The health and safety
committee, or where there isn't one, the staff delegates, must be informed once a year about the number of reports received as well as the remedial
measures taken.
• Each year, the works council must be consulted on the use of the 218-day arrangement as well as on the tracking tools in place to monitor
workload. This information is transmitted to the health and safety committee and will be held on the social and economic data base.
The employee may ask for an additional medical checkup.
The amendment to the SYNTEC CBA will come into force on the first day of the month following publication in the Official Journal of Ministerial
Extension Decisions. Once published, companies which have internal 218-clay arrangements (that is, a company-wide CBA on the 218 working day
arrangement) in place will have 6 months to alter their arrangements to comply with the amended provisions. For companies without such internal
arrangements or without union or staff representatives, the new requirements will apply immediately on publication of the decision.
For more information, please contact Frederique Sallee.
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« A delayed lawsuit does not always lead to forfeiture
Minimum wage from 1 January 2015 — Part II
Minimum wage from 1 January 2015 — Part I
Categories:
Legislation Minimum Wage
December 29, 2014
by Dr Isabel Haug
On 1 January 2015 the Minimum Wage Act (Mindestlohngesetz, MiLoG) will come into force and introduce the first nationwide minimum wage for
all sectors in Germany. On this occasion, we will provide you with a two-part overview covering relevant questions.
Who is entitled to the Minimum Wage?
All employees who are employed in Germany are entitled to the minimum wage. According to sec. 20 of the Minimum Wage Act it does not matter
whether the employer is located inside or outside Germany.
The Minimum Wage Act provides in sec. 22 exemptions only for the following groups:
•
•
•
•
Interns, but only under the specific conditions provided in sec. 22 of the Minimum Wage Act (e.g. if they are completing an internship which
is mandatory for their school education, vocational training or higher education or any other education program regulated by law);
Children and young persons under 18 without a completed vocational training;
Trainees;
Volunteers; and
Persons who have been long-term unemployed, but only during the first six months of employment
The law contains transitional provisions for certain collective bargaining agreements, newspaper delivery persons and seasonal workers (sec.
23 of the Minimum Wage Act).
What is the "minimum wage"?
The Law provides in sec. 1 para 2 for a minimum wage in the amount of (currently) EUR 8.50 per hour (GBP 7.11; USD 11.55), nothing more and
nothing less. It is to be expected that this very short regulation will cause several problems regarding the calculation of the minimum wage in
practice, for example:
The law does not regulate whether it is possible to take an average in order to calculate the hourly remuneration of the employee. This will
become important, for example, if an employee works overtime.
• The Minimum Wage Act also does not regulate which parts of the employee's remuneration qualify as part of the minimum wage and which
parts have to be paid in addition to the minimum wage. The explanatory statement of the Minimum Wage Act indicates that remuneration
which is intended to compensate the contractual performance of the employee will count towards the minimum wage. In contrast,
remuneration that is paid for additional performance (eg for overtime work, night work or shifts) will not count towards the minimum wage.
However, since this distinction has not been included in the law, it is up to the labour courts to develop principles for the calculation of the
minimum wage.
• Another practical problem arises for payments that are generally not paid on a monthly basis but quarterly or annually (ie Christmas pay).
According to sec. 2 of the Minimum Wage Act, the employer is obliged to pay the minimum wage at the agreed due date, but at the latest on
the last bank working day (Frankfurt am Main) of the month following the month during which the work was carried out. Accordingly, any
parts of the employee's remuneration may only be counted against the minimum wage if the employee receives the payment or a pro rata
amount irrevocably on the due date.
• A similar problem will occur, for example, if targets for commission payments are agreed quarterly and the commission is paid quarterly. One
solution to this problem may be that the employee receives monthly advance payments on a pro-rata basis to comply with the minimum wage
and these are set off against a later commission payment if the employee earns more than the minimum wage.
• Piecework pay remains possible, but the amount of the minimum wage for each hour needs to be guaranteed.
Whatever the answer to these questions, employers will have to adjust existing agreements in order to comply with the minimum wage, or, at least, to
avoid the possibility that remuneration which would otherwise count towards the minimum wage does not do so because it is paid after the due date.
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« Mmimum wage from 1 January 2015 — Part I
The perils of works agreements: Employment contract with the company despite licensed supplier in the case of fake framework service contracts »
Minimum wage from 1 January 2015 — Part II
Categories:
Legislation, Minimum Wage
December 30, 2014
by Dr Isabel Haug
In the second part of our two-part overview, we will address further obligations and liability with regard to the implementation of the new statutory
minimum wage.
Can the minimum wage entitlement be waived?
The minimum wage is mandatory (sec. 3 of the Minimum Wage Act). Agreements according to which the employee's remuneration will be less than
the minimum wage or which limit the exercise of the right to claim the minimum wage are invalid. The Minimum Wage Act only provides an
exception for a waiver in a court settlement for existing claims.
Who is liable for the employee's entitlement?
Sec. 13 of the Minimum Wage Act regulates that sec. 14 of the German Secondment Act (Arbeitnehmerentsendegesetz) shall apply accordingly.
This provision states that the employer is liable in the same manner as a guarantor who has waived the defense of failure to pursue remedies
(Verzicht auf die Einrede der Vorausklage), ie if the employer instructs a third party he is also liable for the minimum wage entitlement of the
contractor's and any subcontractor's employees. This liability may only be excluded or limited in the internal relationship between the principal and
his contractor but not with external effect for the employees.
Are there any reporting or documentation requirements?
The Minimum Wage Act contains in sec. 17 documentation obligations for employers who employ people in a so-called "mini-job" (except minijobs in private households) or in a sector defined in Sec. 2a of the German Control of Unreported Employment Act
(Schwarzarbeitsbekampfungsgesetz, SchwarzArbG). These employers are obliged the record the beginning, the end and the duration of the daily
working time and keep the documentation for a period of at least two years. Furthermore, foreign employers who employ people in these sectors are
obliged to have the employees registered at the competent custom authority (sec. 16 of the Minimum Wage Act).
How are violations of the Minimum Wage Act punished?
Violating the obligation to pay the minimum wage may incur a fine up to an amount of EUR 500,000.00 (sec. 21 of the Minimum Wage Act). In
addition, anyone who has incurred a fine of at least EUR 2500.00 for a violation of the Minimum Wage Act shall be excluded from public
procurement for a reasonable time until the party has proved the restoration of reliability (sec. 19 of the Minimum Wage Act).
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« 'tis the season — holiday parties and workplace accidents
Employee petition no ground for dismissal »
Legislative reforms regarding family and medical leave imminent
Categories:
Legislation Sickness
December 12, 2014
by Saskia MacLauahlin
On 1 January 2015, changes to the German Care Act (Pflegezeitgesetz, PflegeZG) and the German Family Care Act (Familienpflegezeitgesetz
FamPfIG) will come into force. The new regulations aim to reconcile family care duties and work.
Under the revised law, employees are entitled to work part-time in order to be able to care for sick relatives. On request, weekly working time may
be reduced to up to 15 hours. Employees are also entitled to take 10 days off from work in the case of an immediate need for care. During this time,
they will be reimbursed by a state fund. Employees will also enjoy special dismissal protection during this short-term care leave.
Under an option called "care time" (Pflegezeit), employees may also request up to six months of full or partial leave from work to take care of a sick
relative who lives in the same household or, in the case of a minor, may also live away from home. During this time, they will be entitled to an
interest-free loan from the state to support themselves. Employees are required to notify the employer at least 8 weeks prior to the intended start of
their leave, and must also indicate the duration of their planned absence. From the notification until the end of their leave, employees will be granted
special dismissal protection.
Under the so-called "family cam time" (Familienpflegezeit), employees are entitled to reduce their working time for a maximum duration of 24
months to care for a sick relative at home or, in the case of a minor, also away from home. The working time may be reduced to 15 hours. As in the
case of care time, employees may apply for a state-funded loan and enjoy special dismissal protection. The law applies to employers with more than
25 employees.
While it is welcomed as providing better options for employees with sick relatives, it has also been criticized as being an undue burden for
employers.
• A similar problem will occur, for example, if targets for commission payments are agreed quarterly and the commission is paid quarterly. One
solution to this problem may be that the employee receives monthly advance payments on a pro-rata basis to comply with the minimum wage
and these are set off against a later commission payment if the employee earns more than the minimum wage.
• Piecework pay remains possible, but the amount of the minimum wage for each hour needs to be guaranteed.
Whatever the answer to these questions, employers will have to adjust existing agreements in order to comply with the minimum wage, or, at least, to
avoid the possibility that remuneration which would otherwise count towards the minimum wage does not do so because it is paid after the due date.
International Labor & Employment Law Committr---,
r
Issue: October 2014
Editor: Ute Krudewagen, Associate Editors: Arnie Aldana and Ankoor Bagchi I Asia and Oceania
Editor: Jason Noakes I Canada Editor: Pascal Rochefort I European Editor: Paul Callaghan I Latin
America Editor: Juan Carlos Varela I USA Edito: Trent Sutton
The Netherlands
Changes to Fixed-Term Employment Rules and Dismissal Legislation in 2015
Helene Bogaard, Partner, and Thessa van der Windt, DLA Piper, Netherlands
New laws concerning notification, probationary periods, non-compete agreements, fixed-term to
indefinite contract conversions, and dismissal are due to come into force in two stages on January 1,
2015 and July 1, 2015.
New Rules Effective as of January 1, 2015
New rules on fixed term contracts relating to a requirement to notify of renewals and the use of noncompete restrictions and probationary periods will apply from January 1, 2015.
1. Duty to notify--Employers will be obliged to inform fixed-term employees with contracts of six
months or more of any decision whether or not to extend and under what conditions one month before
the end date. If the employer does not, they will have to pay up to one month's salary as compensation
(reduced pro-rata if the required notice is given late).
2. Probationary periods--It will not be lawful to include a probationary period in a fixed-term
employment contract which is entered into for six months or less. It will be prohibited to deviate from
this by a Collective Labour Agreement (CLA). The old legislation regarding probationary clauses will still
apply to employment contracts which have been entered into prior to January 1, 2015. Probationary
periods which are not in line with the new legislation, but were included in a CLA valid on January 1,
2015, will be respected for a transitional period until July 1, 2016 (or the end date of the CLA if earlier).
3. Non-competes--Non-competes will be prohibited in fixed term contracts entered into after January
1, 2015 unless they are necessary to protect a substantial business interest. A non-compete clause can
only be included if the employer expressly states that it is required due to compelling business or service
interests and this is disclosed to the employee. If the rationale is not convincing (i.e. the clause is not
required due to compelling business or service interests), the court will be able to test the justification.
If the court finds no legitimate interest, it may declare the restraint void.
New Rules Effective July 1, 2015
New rules on the conversion of fixed-term contracts into indefinite term contracts and reforms to
dismissal procedures and severance payments come into force on July 1, 2015.
4. Succession of fixed-term employment contracts--The provisions on the conversion of fixed-term
employment contracts into indefinite term contracts will be amended. From July, the last fixed-term
contract in a chain will be considered permanent if: (i) that contract is the fourth contract in the chain;
or (ii) the total duration of the chain of fixed term contracts exceeds a period of two years (unless the
chain of consecutive contracts is broken by a six month break).
5. Dismissal law--Currently there is a "dual dismissal system". If it is not possible to terminate with
mutual consent, an employer can terminate by giving notice after receiving permission from the Dutch
Employee Insurance Agency (UWV) or Cantonal Court. The amendments to this system will be:
• New compulsory proceedings (Court or UWV) will apply depending on the reason for termination.
A dismissal on business economic grounds or based on long-term illness will be handled via the
UWV, a dismissal for personal circumstances via the Court.
• The Cantonal severance formula will be replaced by a "transition payment". The amount of the
transition payment is based on the employee's length of service and is capped at EUR 75,000 (or
one year's salary if higher). In exceptional cases, judges can allow compensation over the
transition payment cap, for example where the employer is to blame for an unworkable situation
and it is "unreasonable" to only pay the transition allowance. Case law following July will dictate
what circumstances will qualify as "unreasonable".
Return to Home Page Continue to the following pages
Australia I China I Germany I Japan
American Bar Association Section of Labor and Employment Law
321 N Clark I Chicago, IL 60654 I (312) 988-5813V
BE GLOBAL SPECIAL REPORT
BELGIAN EMPLOYMENT LAW REFORMS 2014
DLA Piper LLP (US)
www.dlapiper.com
On 1 January 2014, legislation implementing a harmonized statute for blue-collar and white collar
workers came into force. These new rules have fundamentally change Belgian employment law as a
whole, particularly the rules on termination of employment.
Background
Under Belgian labour law, there has always been an essential difference between blue and white collar
workers, based on the nature of their work.
A blue-collar worker essentially performs "manual labour", whereas a white-collar worker performs
"intellectual labour".
However, the social and economic context has changed drastically since this distinction was
introduced, making the distinction between the two categories theoretical and obsolete.
In a judgment in July 2011, the Belgian Constitutional Court held that the difference in treatment
between blue and white collar workers in relation to notice periods and the so-called "carensday"
(which is the unpaid first day of sick leave), solely based on the nature of their work, was neither
objective nor well-founded and so non-compliant with the constitutional principles of equality and
non-discrimination. The Constitutional Court gave the Belgian legislator until 8 July 2013 to come up
with new rules, harmonizing the status of blue and white collar workers.
Reaching agreement about such drastic measures was never going to be easy, given that the difference
between the two categories of worker formed a cornerstone of existing Belgian employment law.
However, the social partners finally reached a political agreement on 5 July 2013. A first bill was
submitted to the Federal Parliament on 26 November 2013, setting out new rules which came into
force on 1 January 2014. The bill was passed on 26 December 2013 and published in the Belgian law
gazette on 31 December 2013.
WHAT'S NEW UNDER THE ACT OF 26 DECEMBER 2013?
Harmonized notice periods
The notice periods applicable as of 1 January 2014 are set by law. Neither blue nor white-collar
workers now have notice periods calculated in accordance with case-law formulas (e.g. the Claeysformula which set notice based on age, annual base salary, and period of continuous service). Instead,
notice periods are determined according to years of continuous service with the employer.
As a consequence, all notice periods stipulated in employment contracts, Work Regulations or other
internal company policies should be reviewed and amended in order to bring them in line with the new
rules applicable as of 1 January 2014.
As of 1 January 2014, notice periods are calculated in weeks and commence on the Monday of the
week following the week during which notice was given.
Be Global Special Report | April 2014
DLA Piper
Harmonized notice periods on the basis of service acquired after 1 January 2014
The notice to be given by the employer terminating employment on the basis of seniority acquired as
of 1 January 2014, is determined in accordance with the following basic principles:
•
During the first year of service, short notice periods apply to enable both parties to swiftly
terminate the employment contract in the event their professional relationship does not work out
as planned;
•
Between the fifth and the nineteenth years of service, notice periods increase progressively at the
rate of 3 weeks for each year of service commenced;
•
During the twentieth year of service, the notice period increases by 2 weeks;
•
From the twenty-first year of service, the increase in notice period is limited to one week for each
year of service commenced, in order to avoid notice periods of inflated duration for older workers.
The harmonized notice periods to be observed by the employer are as follows:
seniority
0 - 3 months
3 - 6 months
6 - 9 months
9 - 12 months
12 - 15 months
15 - 18 months
18 - 21 months
21 - 24 months
2 - 3 years
3 - 4 years
4 - 5 years
5 - 6 years
6 - 7 years
7 - 8 years
8 - 9 years
notice period (weeks)
2
4
6
7
8
9
10
11
12
13
15
18
21
24
27
seniority
9 - 10 years
10 - 11 years
11 - 12 years
12 - 13 years
13 - 14 years
14 - 15 years
15 - 16 years
16 - 17 years
17 - 18 years
18 - 19 years
19 - 20 years
20 - 21 years
21- 22 years
22 - 23 years
+ 1 year
30
33
36
39
42
45
48
51
54
57
60
62
63
64
+1
If notice is given by the employer to terminate the employment contract on the first day of the month
after the month in which the worker reaches age 65 (retirement age), the notice period is limited to
maximum of 26 weeks.
The notice period to be observed by the worker are half of the employer's notice period, capped at a
maximum of 13 weeks:
seniority
0 - 3 months
3 - 6 months
6 - 12 months
12 - 18 months
18 months - 2 years
2 - 4 years
4 - 5 years
1
2
3
4
5
6
7
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seniority
5 - 6 years
6 - 7 years
7 - 8 years
8 years +
9
10
12
13
In the event of "counter-notice" ("tegenopzegging", "contre-préavis") given by a worker who finds a
new job while under notice period given by the employer, the notice period is limited to a maximum
of 4 weeks.
Finally, under the new rules, a sector level collective bargaining agreement cannot provide notice
periods (either in case of dismissal or resignation) which are more advantageous to the workers than
those which apply under the new rules.
The Act only refers to sector level collective bargaining agreements in this respect. As such, it is
possible that more advantageous notice periods provided for in a collective bargaining agreement
concluded at company level will still remain possible.
In addition, the Act is unclear as to whether more advantageous notice periods can be agreed by
individual agreement between the worker and the employer prior to termination of the employment
contract.
The Federal Public Service for Employment, Labour and Social Dialogue considers that such
agreements are possible but the employment courts may take a different view.
Termination of fixed term or specific task contracts
Unlike the old rules, the new rules provide that it is possible to terminate fixed term or specific task
contracts of before their expiry date. From January 2014, these contracts can be terminated during the
first half of the contract's term, but no later than six months after the contract's start date.
Due to this new rule, fixed term employment will become much more attractive, as employer can now
terminate these contracts before their end date without facing considerable financial liabilities.
Transitional provisions applicable to employment contracts commenced before 1 January 2014
The new rules drastically differ from the rules which applied until 31 December 2013. As such, to
safeguard the legitimate expectations of the parties to employment contracts which commenced before
1 January 2014 regarding termination, the new rules provide for transitional provisions.
The basic rule of the transitional provisions is, for those under an existing employment contract at 1
January 2014, to provide for a mix between the old and new rules. The old rules will in principle
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apply to the service up to 31 December 2013, whereas the notice period for service after 1 January
2014 will be calculated under the new rules.
Transitional provisions applicable to white-collar workers
In the event of dismissal by the employer of an individual who was a white-collar worker as at 31
December 2013 with an annual base salary of € 32.254 or more, the new rules set out a specific
method for calculating the notice period in respect of service up to 31 December 2013.
This calculation method is primarily intended to prevent the application of Article 82, §3 of the Law of
3 July 1978 on employment contracts, which states that the worker and the employer must in principle
reach an agreement about the length of the notice period after termination of the employment contract.
The new rules provide that the notice period for service up to 31 December 2013 is equal to 1 month
for each year of service commenced, with a minimum of 3 months.
In the event of termination of a white-collar worker with annual base salary between € 32.254 and €
64.508, it will no longer be necessary to agree the length of the applicable notice period after
termination of the employment contract.
However, it is not clear how the "1-month-per-commenced-year-of-service-rule" will impact on
clauses validly agreed before 1 January 2014 under the law which provided that the notice period
applicable to white-collar workers on annual base salary of more than € 64.508 could be limited to
three months for each period of 5 years' service commenced.
According to the Federal Public Service for Employment, Labour and Social Dialogue any such
clauses will remain effective for the purposes of determining the notice period for service up to 31
December 2013.
In brief, under the new rules the notice period to be observed by an employer in respect of service of a
white-collar worker accrued as at 31 December 2013 will be calculated as follows:
•
For white-collar workers with annual base salary of less than € 32.254 - 3 months for each period
of 5 years' service commenced;
•
For white-collar workers with annual base salary of at least € 32.254 - 1 month for each year of
service commenced, with a minimum of 3 months.
DLA Piper
The Federal Public Service for Employment, Labour and Social Dialogue is of the opinion that valid
clauses setting the notice periods for white-collar workers on annual base salary of more than €
64.508, which were concluded before 31 December 2013, will continue to apply to the calculation of
notice period for service up to 31 December 2013.
In other words, if such a provision was validly agreed before 1 January 2014, the notice period for
service acquired up to 31 December 2013 will be calculated according to that agreement.
The total period of notice to be given by the employer will be equal to the sum of the notice period for
service up to 31 December 2013 and the notice period for service after 1 January 2014.
Also, the transitional provisions of the new rules provide a specific calculation method for the notice
period which applies where a white-collar worker resigns. There, the notice period for service up to
31 December 2013 will be equal to at least 1.5 months for each period of 5 years of service
commenced, but limited to:
•
A maximum of 4.5 months if the worker's annual base salary is less than or equal to € 64.508;
•
A maximum of 6 months if the worker's annual base salary exceeds € 64.508.
The notice period for service acquired after 1 January 2014 is calculated as described above.
The total notice to be given by a white-collar worker will be the sum of the notice period for service as
at 31 December 2013 and the notice period for service after 1 January 2014, unless the following
maximum thresholds were already reached as at 31 December 2013:
•
A maximum of 3 months if the worker's annual base salary is less than or equal to € 32.254;
•
A maximum of 4.5 months if the worker's annual base salary is between € 32.254 and € 64.508;
•
A maximum of 6 months if the worker's annual base salary exceeds € 64.508.
In such cases, the notice period for service after 1 January 2014 will not be taken into account.
Otherwise, if these thresholds were not reached as at 31 December 2013, the total notice period is, in
any event, limited to a maximum of 13 weeks.
Transitional provisions applicable to blue-collar workers
In principle, the harmonized notice periods outlined above apply to all workers as of 1 January 2014,
but in certain circumstances they will not apply to certain blue-collar workers who meet the following
requirements:
•
Have at least 1 year of service;
•
For whom the notice periods to be observed by the employer were set by Royal Decree on 31
December 2013 (in accordance with Article 61 or 65/3, §2 of the Law of 3 July 1978); and
•
The applicable notice period to be given by the employer is lower than the notice periods set out
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below.
In the event of termination of the employment contracts of this category of worker between 1 January
2014 and 31 December 2017 (or during a shorter timeframe determined by a sector level collective
bargaining agreement), the following "transitional notice periods" will apply:
Dismissal by the employer
Resignation by the worker
Service
Notice period
Service
Notice period
- 3 months
2 weeks
- 3 months
1 week
3 - 6 months
4 weeks
3 months - 5 years
2 weeks
6 months - 5 years
5 weeks
5 -10 years
3 weeks
5 - 10 years
6 weeks
10 - 15 years
4 weeks
10 - 15 years
8 weeks
15 -20 years
6 weeks
15 - 20 years
12 weeks
+ 20 years
8 weeks
+ 20 years
16 weeks
These "transitional notice periods" will continue to apply (even after 31 December 2017) to any
worker who meets all of the following requirements:
•
the notice to be given by the worker and the employer was determined by Royal Decree on 31
December 2013 (in accordance with Article 61 or 65/3, §2 of the Law of 3 July 1978);
•
the worker has no fixed work place; and
•
the worker is usually involved in one of the following professional activities in a temporary or
mobile work place: earth/excavation works, trench works, foundation works, reinforcement works,
hydraulic works, road works, agricultural works, installation of sanitation facilities, construction
works, assembly and core dismantling works, alteration works, conversion works, renovation
works, demolition works, conservation works, maintenance, painting and cleansing works,
sanitation works, and finishing works in the context of one or more of the aforementioned works.
These transitional provisions do not apply to notice periods determined by Royal Decree in the
context of restructuring, bridge pension or retirement.
Termination on restructuring or collective dismissal
To the extent that the employer is officially recognized by the federal authorities as being a company
in restructuring or in difficulties in the sense of the Royal Decree of 3 May 2007, the notice period to
be given by the employer can be reduced to maximum 26 weeks.
Insofar as ongoing collective dismissal procedures are concerned, the rules as applicable as at 31
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December 2013 remain applicable to the workers affected by a collective dismissal procedure which
was confirmed at the latest on 31 December 2013.
New leave to apply for a new job ("sollicitatieverlof", "congé de solicitation")
Under the new rules, all workers are entitled to time off work to apply for a new job during their
notice period.
During the last 26 weeks of the notice period, a worker will be entitled to be absent for 1 full day per
week. Before then, during the course of the notice period, a worker will be entitled to be absent for a
½ day per week.
However, when the worker is undertaking outplacement training during the notice period, the worker
will be entitled to have time away from work on one or two days per week, provided the total absence
does not exceed one working day per week.
Additional indemnities due to and after dismissal
Under existing Belgian labour law, several collective bargaining agreements concluded at sector level
provide for additional indemnities which are paid to workers due to and after a dismissal. These
additional indemnities are paid on top of the notice period or compensation in lieu of notice.
The new rules intend to restrict this by prohibiting payment of these additional indemnities as of 1 July
2015, to the extent that the amount of any additional indemnity would be less than the difference
between the total notice liability under the new (post 1 January 2014) rules and the total notice liability
under the old (pre 31 December 2014) rules.
If the amount of the additional indemnity would be higher than the difference between both methods
of calculating the notice periods, then payment of an additional indemnity equal to the difference
between both amounts will remain possible.
This rule is not applicable to collective bargaining agreements concluded by a Joint Committee or a
National Works Council which include terms and conditions on unemployment company allowance.
TRIAL PERIOD
Rules applicable until 31 December 2013
The inclusion of a trial period clause in an individual employment contract is a mechanism which
allows the parties to establish their qualifications, rights and duties over a short period before the
engagement becomes definite. During this period, short notice periods apply.
A trial period clause must be in writing and agreed, at the latest, before the start of the employment.
Unless it is in writing, a trial period clause is void, and the employment contract will be of a definitive
nature from the start.
There are limits on the duration of the trial period. The minimum duration is 7 days for blue-collar
employees and one month for white-collar employees, while the maximum duration is 14 days for
blue-collar employees and six months for white-collar employees whose annual salary does not exceed
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€38.665 (in 2013). For white-collar employees earning more than this, the maximum duration is
12 months.
An employer can only trial a worker once, although another trial is possible for a different job.
The trial period can be brought to an end by payment of an indemnity in lieu of notice, by termination
with notice or for serious cause or by mutual consent. If the trial period expires but the trial is not
terminated by either party, the contractual relationship between the employee and employer becomes a
definite one which can only be terminated under the normal rules on termination of employment
contracts.
What's new according to the Act?
Abolition and transitional period
As of 1 January 2014, the use of trial periods is abolished. Under the new rules, and notwithstanding
the abolition of the trial period, the parties can still "consider" the initial stages of the employment
relationship as a period where the quality of their professional collaboration can be assessed. Where
the assessment is not satisfactory, one of the parties can bring the contract to an end by giving the
shortened notice periods detailed above.
The new rules provide more flexibility as the employer does not have to wait one month (as was
previously the case for white-collar employees) before having the right to terminate the employment
contract. That said, the new notice periods are longer than the 7 days' notice period which applied
previously. In addition, as from 1 January 2014, the employer must provide a reason for the decision
to terminate the employment contract.
Transitional rules apply to contractual trial period clauses which started running before 1 January
2014 under which the pre January 2014 rules continue to apply.
Consequences of the abolition for non-compete and training clauses
A non-compete clause prohibits an employee, upon leaving the company and during a certain period
of time, from engaging in a business similar to that of his employer, either by running a personal
business or by taking employment with a competing employer.
Under a training clause, the employer agrees to provide, either himself or through a third party,
training for the employee, at the employer's expense. In exchange, the employee agrees not only to
follow the training course but also to remain in the employer's service for a certain period of time.
Under pre-January 2014 rules, non-compete or training clauses did not apply when the contract was
terminated during the trial period. As the trial period has now been abolished, this system needed to be
reviewed. According to the new rules, as of 1 January 2014, non-compete and training clauses will
not apply where an employment contract is terminated during the first six months.
These new rules only apply to employment contracts which commenced after 1 January 2014.
Employment contracts which commenced before 1 January 2014 can still include a trial period clause
which will continue to have effect until the end of its term.
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Exceptions for temporary work, interim work and student work
As an exception, under the new rules, trial periods are preserved for employment contracts for
temporary work and interim work under the law of 24 July 1987.
According to this law, the first three working days of an employment contract for temporary work or
interim work, are considered to be a trial period. During this period, either party may to terminate the
contract without a notice period or indemnity in lieu of notice being due.
As student contracts are also characterized by their relative short duration, the new rules also preserve
trial period although the rules on this have been changed. Under the new rules, a student contract need
not contain a trial period clause. Like the employment contracts for temporary work or interim work,
the first three working days of a student contract are automatically considered a trial period. During
this period, both parties may terminate the contract without a notice period or indemnity in lieu of
notice being due.
TERMINATION OF CONTRACTS OF FIXED TERM OR SPECIFIC TASK CONTRACTS
Rules applicable until 31 December 2013
In the event of serious misconduct on the part of the worker, however, an employment contract of a
definite duration or for the performance of a specific task may be terminated by the employer, prior to
the expiration of the term or the performance of the specific task.
Otherwise, such a contract may be terminated by the employer prior to the expiration (and subsequent
to the trial period, if any), only through payment of a termination indemnity equal to the lower of:
•
the worker's salary for the remainder of the term, or
•
twice the worker's salary for the notice period to which the worker would have been entitled if the
worker had been employed for an indefinite duration.
What's new according to the Act of 26 December 2013?
Contrary to the rules which applied until 31 December 2013, the new rules make it possible to
terminate fixed term/specific task contracts before their expiry date. From 1 January 2014, such
contracts can be terminated by serving notice during a specific period of time, provided that the
following conditions are met:
•
the contract can only be terminated by notice during the first half of its term (for a fixed term
contract) or during the first half of its expected term (for a specific task contract); and
•
the first half of the employment contract is limited to a maximum of 6 months from the start date.
This rule applies even if this option has not been specifically provided for in the contract. The period
during which contracts of this type can be terminated by notice is fixed and cannot be extended or disapplied.
Notice periods
The harmonized period of notice to be given by an employer or employee to terminate a fixed or
specific task contract is the same as for a contract of indefinite duration. Given the 6 month
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termination window, the applicable notice periods are:
Service
0 - 3 months
3 - 6 months
Notice by employer (weeks)
2
4
Notice by employee (weeks)
1
2
Payment of an indemnity in lieu of notice
If a fixed term or specific task contract is terminated without serious cause or notice during the first
half of its term (limited to maximum of 6 months from the start date), an indemnity in lieu of notice
will need to be paid. This indemnity is equal to salary for the duration of the notice period which was
not complied with.
Note that the end of the notice period must fall within the period when notice can be served. So the
last day of the notice period must fall within the first half contract term and within 6 months from the
contract start date. If the notice period ends outside this period, the terminating party must pay a
termination indemnity equal to the lower of:
•
the worker's salary for the remainder of the term, or
•
twice the worker's salary for the notice period to which the worker would have been entitled if the
worker had been employed for an indefinite duration.
Consecutive employment contracts of definite duration
Under the new rules, when parties have concluded consecutive fixed term contracts, the option to
terminate the contract on notice will only apply to the first contract in the series.
THE CARENSDAY ("CARENSDAG", "JOUR DE CARENCE")
In its judgment of 7 July 2011, the Belgian Constitutional Court judged as unconstitutional the
difference of treatment between the white-collar and the blue-collar workers in relation to the "carens
day" (the unpaid first day of sick leave). Under the relevant rules, guaranteed salary was due to whitecollar workers from the first day of their incapacity for work but blue-collar workers had to wait for
the second day of incapacity to be entitled to guaranteed salary. This difference in treatment resulted
from an age where, according to the legislator, the employer could not be expected to suffer as a result
of the "dissolute" lifestyle of blue-collar workers!
In most undertakings, this difference of treatment had already been changed with guaranteed salary
paid to blue-collar workers as of the first day of their incapacity.
Under the Act, payment of guaranteed salary as of the first day of the incapacity is now required for
both white and blue-collar workers.
Guaranteed salary must be paid to white-collar & blue-collar workers from the first day of their
incapacity for work.
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CONTROLLING ABSENTEEISM
One aim of the Act is to increase an employer's ability to control absenteeism.
Previously, workers were not entitled to guaranteed salary if they did not comply with the obligation
to notify/submit a medical certificate within the period applicable in the undertaking. The Act extends
the circumstances cases in which no guaranteed salary is due and workers will also lose the right to
guaranteed salary if:
•
they fail to immediately notify the employer of their sickness; or
•
they refuse to undergo a medical examination by a supervisory doctor.
In addition, a collective bargaining agreement or work regulations may set time period of 4 hours
between 7 am and 8 pm during which a worker must be available to see a supervisory doctor at their
home or at any other address communicated to the employer.
Provisions on sick leave and work incapacity, notice and medical certificates in employment contracts
and work regulations should be reviewed and amended to bring them into line with the new rules
applicable as of 1 January 2014.
SICK LEAVE/INCAPACITY AND THE TERMINATION OF THE EMPLOYMENT
CONTRACT
The Act also changes the provisions relevant to termination of the employment contract during a
period of work incapacity or sick leave.
Is an employer allowed to recover the already paid guaranteed salary on the amount of the
indemnity in lieu of notice?
According to the legislation applicable before 31 December 2013, an employer who terminated the
indefinite employment contract of a white-collar employee could deduct from the amount of the
indemnity in lieu of notice any guaranteed salary which had already been paid. This right of deduction
only applied to the white-collar employees who had been on sick leave for six months or more.
The Act of 26 December 2013 abolishes this right. However, as of 1 January 2013, an employer who
terminates an employment contract with immediate effect during sick leave/incapacity for work by
paying a compensatory indemnity in lieu of notice, is entitled to recover the guaranteed salary which
has been paid regardless of the duration of the period of sick leave/work incapacity. This applies:
•
to indefinite term employment contracts;
•
if the employment contract has been terminated with a period of notice during which the worker
should continue to work; and
•
if the sick leave/incapacity occurs after notice is given by the employer.
In the event of multiple periods of sick leave and/or incapacity for work, only the guaranteed salary
which has been paid during the period of leave in effect at termination date can be deducted from the
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amount of the indemnity in lieu of notice.
What about incapacity for work of more than 7 days during a trial period?
Under the legislation applicable before 31 December 2013, in cases of incapacity for work of more
than 7 consecutive calendar days during a trial period, the employer was entitled to terminate the
employment contract of a white-collar employee, without notice or payment of any indemnity in lieu .
The Act of 26 December 2013 abolishes this option.
What about the termination of a fixed term/specific task employment contract?
A distinction is to be made between fixed term/specific tasks contracts of less than 3 months duration
and those concluded for more than 3 months.
For contracts of less than 3 months, the employer may terminate without payment of an indemnity in
the event of a period of incapacity to work of longer than 7 consecutive days. This rule applies to all
workers. However according to the Act of 26 December 2013, this rule only applies at the end of the
period during which notice may be given (i.e. after the first half of the contract term).
For contracts of more than 3 months, the employer may terminate with the payment of an indemnity in
the event of a period of incapacity for work of longer than 6 months. This indemnity is equal to the
salary which should be paid up to the end of the employment contract, but capped at 3 months' salary.
Any guaranteed salary already paid can be deducted from this indemnity in lieu of notice. This rule
applies to all workers.
EXTENSION OF THE RIGHT TO OUTPLACEMENT
Under the new legislation, the right to outplacement is extended to all workers who are entitled to a
notice period or an indemnity in lieu of notice of at least 30 weeks, irrespective of their age.
The regime under Collective Bargaining Agreement n° 82 for employees aged at least 45 years,
nonetheless remains applicable to employees who do not benefit from the provisions of the new
legislation.
The new regime, which applies to both private and public companies, excludes dismissals which take
place as part of a collective dismissal exercise (in the sense of the Act of 23 December 2005 - i.e.
when an employment action group has to be set up or the employer has to involve an existing
employment action group).
The outplacement package comprises 60 hours of outplacement assistance and will vary depending on
whether the employee is dismissed by means of payment of an indemnity in lieu of notice or by means
of a notice period.
•
Where dismissal is by means of the payment of an indemnity in lieu of notice, the employee will
be entitled to the following severance package:
•
Outplacement assistance of 60 hours duration and costing at least 1/12 of the employee's
annual salary during the calendar year preceding the dismissal (with a minimum of € 1.800
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and a maximum of € 5.500). These amounts are calculated pro rata in case of part-time
employment.
•
•
An indemnity in lieu of notice of at least 30 weeks, of which four weeks will be deducted for
the outplacement assistance.
Where dismissal is on notice, the employee will be entitled to the following severance package:
•
Outplacement assistance of 60 hours duration. The time which is spent on outplacement is
deducted from the employee's leave to apply for a new job (see above);
•
A notice period of at least 30 weeks.
The time frame for offering outplacement assistance is also modified. Where termination is with an
indemnity in lieu of notice, an offer of outplacement must be communicated to the employee within
15 days after the termination of the employment contract. Where termination is on notice, the
outplacement offer must be communicated to the employee within 4 weeks after the start of the notice
period, even where the notice period is long and so the actual termination will not take effect for
months, or even years.
Until 31 December 2015, an employee who is dismissed by means of an indemnity in lieu of notice,
may refuse outplacement assistance. In such cases, the employee will receive the full indemnity in lieu
of notice of at least 30 weeks, without any deduction. If a worker refuses the outplacement assistance
he or she is entitled to, they may be temporarily suspended from entitlement to unemployment benefits
paid by the Belgian state.
From 1 January 2016, the deduction of 4 weeks will apply in every case, irrespective of whether
outplacement assistance is refused or accepted.
No similar regime is proposed for termination on notice.
The offer of outplacement must meet the following quality criteria, which are similar to the criteria
under the old regime:
•
If the employer has recourse to a public or private agency for the outplacement services, the
agency must be recognized. However, for the Flemish region, the requirement that outplacement
firms must obtain authorisation no longer applies (unlike the position under the legislation
applicable in Wallonia and the Brussels' region). The employer can also opt for a scheme
organized at joint committee level or at company level.
•
The service provider must subscribe to insurance covering accidents occurring during the
outplacement services and on the way to the outplacement services.
•
The service provider must respect the employee's privacy: information in relation to outplacement
services must be treated as confidential and not be communicated to third parties.
•
The service provider must not use a failure by the employer to fulfil its obligations to suspend or
stop the outplacement services.
•
An employee must be invited to start the outplacement assistance as soon as possible.
•
The distance between the location where outplacement assistance takes place and the home of the
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person involved, should not exceed what is reasonable.
SPECIFIC RULES IN CASE OF RESTRUCTURINGS
The new Act includes two provisions specifically dealing with restructuring.
•
Article 73 of the new Act, includes a transitional provision applicable where there is a collective
dismissal in the sense of the Act of 13 February 1998 (the so-called "Renault Act"). Where the
second notification (which is the communication of the actual decision) given under a collective
dismissal procedure was given at the latest on 31 December 2013, and a collective bargaining
agreement setting the method for collective dismissals was registered at the Federal Public Service
of Employment by 31 December 2013 at the latest, then the legislation applicable as at 31 March
2013 continues to apply, even if the actual dismissal place in 2014 or even later.
•
Under the legislation as applicable up to 31 December 2013, the notice period applicable to white
collar workers can be reduced to 3 or 6 months if the employer is granted the status of "company
in restructuring" or "company in difficulties" and the employment contract is terminated in order
to allow the dismissed worker to access the regime known as "unemployment with company
allowance" (the former "bridge pension").
The new Act now includes a provision permitting a reduction in the notice period to a maximum of 26
weeks if the employer is registered as "company in restructuring" or "company in difficulties". The
article in question does, however, simply state that the details will be determined in a Royal Decree,
which has not yet been adopted.
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HEADLINE Q1
NEW OBLIGATION TO MOTIVATE DISMISSAL
REASONS
On 12 February 2014, the expected Collective
Bargaining Agreement n°109 regarding the motivation
of dismissal reasons ("CBA n°109") has been
concluded within the National Labour Council.
The CBA n°109 will enter into force as from 1 April
2014.
Prior to the conclusion of the CBA n°109, the
obligation for the employer (of the private sector, as
opposed to the employer of the public sector) to
motivate the dismissal reasons only applied in case of
dismissal for gross misconduct, in case of dismissal of
protected employees (maternity, parental leave, etc.),
or if a collective bargaining agreement concluded at
sectorial level would provide for such motivation
obligation.
BASIC PRINCIPLES
General motivation obligation, but with many
exceptions
Due to the introduction of the said CBA n° 109, the
employers in Belgium will upon request of the
employee be required to motivate the specific
dismissal reasons when dismissing an employee,
except in the following circumstances:
■ during the first six months of employment of the
employee. The time performed under the terms of
previously concluded consecutive employment
contracts for definite duration, or under the terms
of previously concluded consecutive employment
contracts for interim work, providing for work
under an identical function on behalf of the same
employer, will also be taken into account when
calculating the abovementioned six-month period;
■ during the execution of an employment contract
for interim work;
■ during the execution of a student employment
contract;
■ in the context of pre-pension ("chômage avec
complement d'entreprise", "werkloosheid met
bedrijfstoeslag");
■ termination of employment contracts for indefinite
duration for ending the employment relationship as
from the first day of the month subsequent to the
month during which the employee has reached the
legal pensionable age of 65 years;
■ dismissals in the context of definitive cessation of
business activities of the employer;
■ dismissals in the context of closure of companies
in accordance with Article 3 of the Law of 26 June
2002 regarding closure of companies;
■ dismissals in the framework of collective dismissals,
and other multiple lay-offs for economic reasons for
which a sectorial collective bargaining agreement
provides for specific information and consultation
procedures.
Furthermore, the new motivation obligation as
determined in the CBA n°109 will not be applicable to
circumstances in which there was already a legally
determined motivation obligation. In those cases, the
previously applicable motivation terms and conditions
will remain applicable. This concerns amongst others the
following circumstances:
■ dismissal for gross misconduct in the sense of Article
35 of the Law of 3 July 1978 regarding employment
contracts;
■ dismissals of representatives of the works council or
of the committee for prevention and protection at
work;
■ dismissals of prevention advisors;
■ other already applicable motivation obligations as
determined by a collective bargaining agreement
concluded at sectorial level.
Motivation obligation at request of the employee
The employer will be legally required to motivate the
dismissal reasons if the employee would submit a request
thereto by registered letter within two months after the
date of termination of his employment contract.
held to pay an additional indemnity equal to two weeks'
remuneration.
If the employer would already have duly motivated (ie by
stating all necessary information, allowing the employee
to fully understand his dismissal reasons) the dismissal
reasons together with the announcement of his dismissal
decision to the employee, the abovementioned procedure
and sanction does not apply.
Flagrant and unreasonable dismissal
The CBA n°109 states that any given reasons for
dismissal of an employee working under the terms of an
employment contract for indefinite duration must be
linked with the employee's work ability, his behavior at
work or with any business requirements of the company
of the employer.
Otherwise, the employer faces
liabilities due to flagrant and unreasonable dismissal.
When determining any liabilities in this respect, Belgian
courts will need to assess whether a normal and
reasonable employer would also decide to proceed with
dismissal of the employee in similar circumstances.
In case of flagrant and unreasonable dismissal, the
dismissing employer faces payment of an additional
indemnity varying from 3 to maximum 17 weeks'
remuneration. This indemnity can in principle not be
combined with other indemnities due to termination of
the employment contract, with the exception of the
following indemnities:
■ the compensatory indemnity in lieu of notice;
If the employee was dismissed with respect of a notice
period to be performed, he must submit such request by
registered letter within six months after the notification
date of his dismissal, but no later than two months after
the expiration date of his notice period to be performed.
■ the 2-weeks' remuneration sanction due to noncompliance with the abovementioned motivation
obligation;
The employer will be legally presumed to have received
the employee's registered letter as from the third working
day after the sending date.
■ a clientele indemnity, due to sales representatives
only;
Within two months after receipt such formal request by
registered letter from the employee, the employer must
send to the employee by registered letter a clear
motivation of the specific reasons which have led to his
dismissal.
The motivation should include all necessary information,
allowing the employee to fully understand the reasons
which have led to his dismissal.
By default of any such motivation within two months'
time after receipt of a formal request from the employee
to motivate his dismissal reasons, the employer will be
02 | 17543119.1
■ non-compete indemnity;
■ additional indemnities paid in addition to allowances
paid by the Belgian social authorities, eg indemnities
in the context of pre-pension.
Moreover, besides a claim for flagrant and unreasonable
dismissal in accordance with the CBA n°109, the
employee can still opt to launch damages claims before
Belgian civil courts for abuse of the employer's right to
dismissal in accordance with Belgian civil law (ie by
proving proof of a fault committed by the employer and
of the damages suffered due to this fault, and by
establishing a causal link between the employer's fault
and the damages suffered).
Shared burden of proof
Lastly, the CBA n°109 provides for specific rules
regarding the division of the burden of proof between
employer and employee during judicial proceedings
involving the motivation obligation of the employer as
determined in the said CBA.
The burden of proof will be divided according to the
following basic principles:
■ if the employer has complied with his motivation
obligation within two months after having received a
formal request thereto from the employee, or if he
duly disclosed the reasons for dismissal
spontaneously to the employee, then the "claiming
party" (ie the employee) will carry the burden of
proof;
■ if the employer did not comply with his motivation
obligation within two months after having received a
formal request thereto from the employee, he will
carry the burden of proof to demonstrate that the
employee's dismissal cannot be considered as a
flagrant and unreasonable dismissal;
■ an employee who initially did not request for
motivation of his dismissal reasons, but who
afterwards claims flagrant and unreasonable
dismissal, will carry the burden of proof for
demonstrating that his dismissal can indeed be
considered as such.
Abolition of the unfair dismissal principle (ex-Article
63 of the Law of 3 July 1978 on employment
contracts)
As from the entry into force of the CBA n°109 on 1 April
2014, the principle of unfair dismissal, previously
applicable to employees considered as blue-collar
employees until 31 December 2013 will be abolished,
with the exception of the categories of blue-collar
employees described below.
31 December 2015, the CBA n°109 will become
applicable in its entirety as from 1 January 2016.
For blue-collar employees to whom the new harmonized
periods as determined in the Law of 26 are permanently
not applicable (ie essentially employees with no fixed
work place in the construction sector), the
abovementioned general rules of the CBA n°109 will
never apply.
To these categories of blue-collar employees, the "unfair
dismissal principle", as previously determined in the
abolished Article 63 of the Law of 3 July 1978 on
employment contracts, remains applicable.
However, the unfair dismissal principle will remain
applicable until 31 December 2015 to the blue-collar
employees to whom the new harmonized notice periods
are temporarily not applicable.
"Unfair dismissal" is defined as a dismissal for reasons
other than those linked with the employee's work ability,
his behavior at work or with any business requirements of
the company of the employer.
If an employee would claim unfair dismissal by the
employer, the employer must prove that the employee's
dismissal reasons were justified.
In case of unfair dismissal, the employer faces payment
of an additional indemnity equal to six months'
remuneration, or any other indemnity determined by a
collective bargaining agreement having universal binding
force.
This indemnity is paid on top of the regular termination
indemnities, but cannot be granted in combination with
the following additional protection indemnities:
■ for dismissals of employees on maternity leave;
■ for dismissals of members of the works council/
committee of prevention and protection at work;
■ for dismissals of employees on paid education leave.
DEROGATIVE RULES APPLY TO CERTAIN
BLUE-COLLAR EMPLOYEES
The CBA n°109 provides for derogative rules applicable
to blue-collar employees, to whom the new harmonized
notice periods as determined in the Law of 26 December
2013 do not apply, and to whom the shorter notice
periods as determined in the CBA n°75 remain applicable
(please see our earlier Be Aware update for further detail
in this respect).
For the blue-collar employees to whom the new
harmonized notice periods as determined in the Law of
26 December 2013 are temporarily not applicable until
RECOMMENDATIONS
Due to the introduction of the CBA n°109, Belgian
employers will need to change their approach to
dismissals of their employees.
The new motivation obligation imposes a considerable
burden of proof on the employer.
From now on, a dismissal decision must be taken based
on a well-documented file of the employee,
www.dlapiper.com | 03
demonstrating that the dismissal decision was based on
justified grounds.
Therefore, for alleviating the employer's burden of proof,
it will be of the utmost importance to create a paper trail
of the employee's performance and/or behavior at work,
by eg organizing periodic performance evaluations,
sending out warning letters for poor behavior/ poor
performance, etc.
Furthermore, the rules regarding the shared burden of
proof could also be used in the advantage of the
employer.
As discussed above, the employee will carry the burden
of proof if the employer has complied with his
motivation obligations, either by spontaneously
disclosing the dismissal reasons to the employee, or by
duly replying to a formal request thereto by the
employee.
Consequently, we recommend to spontaneously disclose
the dismissal reasons together with the dismissal
announcement to the employee, as this will cause the
transfer of the burden of proof to the employee right from
the start, hence limiting risks of successful claims for
flagrant and unreasonable dismissal.
This publication is intended as a general overview and discussion of the subjects dealt with. It is not intended to be, and should not be used as, a substitute for taking
legal advice in any specific situation. DLA Piper UK LLP and DLA Piper SCOTLAND LLP will accept no responsibility for any actions taken or not taken on the basis of
this publication. If you would like further advice, please speak to your DLA Piper contact on 08700 111 111.
www.dlapiper.com
DLA Piper UK LLP is authorised and regulated by the Solicitors Regulation Authority. DLA Piper SCOTLAND LLP is regulated by the Law Society
of Scotland. Both are part of DLA Piper, a global law firm operating through various separate and distinct legal entities. For further information
please refer to www.dlapiper.com
UK switchboard: +44 (0) 8700 111 111
Copyright ©2012 DLA Piper. All rights reserved. | FEB 14 | Ref: UKG/DPLDS/BIR/17543119.1
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FUNDAMENTAL REFORM OF BELGIAN EMPLOYMENT
LAW AS OF 1 JANUARY 2014
HEADLINE Q1
On 26 November 2013, the Belgian Federal
Government finally submitted before the Federal
Parliament the long expected bill regarding the
harmonization of the blue-collar and white-collar
workers.
The new rules laid down in the proposed bill will
fundamentally change Belgian employment law as a
whole as of 1 January 2014, particularly the rules
applicable to termination of the employment contract.
During the month December, we will provide you
with weekly special Be Aware updates in which
different aspects of the new rules will be explained
and in which we will keep you up to speed regarding
any amendments to the initial proposed bill.
By our present first special Be Aware update, we will
provide you with an executive summary of the new
rules which will expectedly become applicable as of 1
January 2014.
However, please bear in mind that our summary below
is based on the proposed bill, which could be modified
in accordance with the amendments submitted by the
Members of Parliament.
FACTUAL BACKGROUND
Under current Belgian labour law, there is an essential
difference between a blue-collar worker and a white-
collar worker, which is based on the nature of their
work.
A blue-collar worker is considered as a worker
performing essentially "manual labour", whereas a
white-collar worker will essentially perform
"intellectual labour".
However, the social and economic context has
modified drastically since the introduction of this
difference, making the essential distinction between
the two categories very theoretical and obsolete.
In its judgment of 7 July 2011, the Belgian
Constitutional Court deemed that the difference in
treatment regarding the applicable notice periods and
the so-called "carensday" (i.e. the unpaid first day of
inactivity of a sickness leave or period of incapacity)
between white-collar and blue-collar workers, solely
based on the nature of their work, is neither objective
or well-founded, hence not non-compliant with the
constitutional principles of equality and nondiscrimination. Therefore, the Constitutional Court
gave the Belgian legislator until 8 July 2013 to come
up with new rules, harmonizing the blue-collar
workers with the white-collar workers.
However, reaching an agreement regarding such
drastic measures to be taken was never going to be an
easy task, as the difference between both worker
categories is essentially one of the cornerstones of
current Belgian employment law.
■ During the twentieth year of service, the notice period
will increase by 2 weeks;
Finally, the social partners reached a political agreement
on 5 July 2013 regarding the harmonization of bluecollar and white-collar workers. A first bill was
submitted before the Federal Parliament on 26 November
2013, determining new rules which will enter into force
as of 1 January 2014.
■ As of the twenty-first year of service, the increase of
the notice period will be reduced to one week per
commenced year of service, in order to avoid notice
periods of exaggerated duration for older workers.
WHAT'S NEW ACCORDING TO THE PROPOSED
BILL OF 21 NOVEMBER 2013?
The harmonized legal notice periods to be respected by
the employer will be the following:
seniority
Harmonized notice periods
The notice periods applicable as of 1 January 2014 will
be determined by law.
The applicable notice period will thus no longer be
calculated in accordance with case-law formulas (e.g. the
Claeys-formula, determining the reasonable notice period
based on age, annual base remuneration, and seniority
level), but will be determined in accordance with the
years of service of the worker on behalf of the employer.
As a consequence, all notice periods indicated in
employment contracts, Work Regulations or other
internal company policies should be reviewed and
amended in order to bring them in line with the new
As of 1 January 2014, notice periods will be calculated in
weeks and will commence as from the Monday of the
week after the week during which notice was notified.
Harmonized notice periods for seniority acquired as
of 1 January 2014
In the event of termination of employment contracts of
indefinite duration, the notice periods to be respected by
the employer for seniority acquired as of 1 January 2014
will be determined in accordance with the following
basic principles:
■ During the first years of service of the worker on
behalf of the employer, short notice periods will
apply in order to enable both contracting parties to
swiftly terminate the employment contract in the
event their professional relationship would not work
out as planned;
■ Between the fifth and the nineteenth year of service,
the notice periods will increase progressively with 3
weeks per commenced year of service;
02 | 17049051.1
0-3
months
3-6
months
6-9
months
9 - 12
months
12 - 15
months
15 - 18
months
18 - 21
months
21 - 24
months
2 - 3 years
notice
period
(weeks)
2
4
6
7
8
9
10
11
12
3 - 4 years
13
4 - 5 years
15
5 - 6 years
18
6 - 7 years
21
7 - 8 years
24
8 - 9 years
27
seniority
9 - 10
years
10 - 11
years
11 - 12
years
12 - 13
years
13 - 14
years
14 - 15
years
15 - 16
years
16 - 17
years
17 - 18
years
18 - 19
years
19 - 20
years
20 - 21
years
21- 22
years
22 - 23
years
+ 1 year
notice
period
(weeks)
30
33
36
39
42
45
48
51
54
57
60
62
63
64
+1
However, if notice is given by the employer for
termination of the employment contract as of the first day
of the month after the month in which the worker reached
the retirement age of 65 years, the abovementioned
notice periods will be limited to maximum 26 weeks.
The notice periods to be respected by the worker will be
equal to half of the abovementioned notice periods, but
capped at maximum 13 weeks:
seniority
0 - 3 months
3 - 6 months
6 - 12 months
12 - 18 months
18 months - 2 years
2 - 4 years
4 - 5 years
5 - 6 years
6 - 7 years
7 - 8 years
8 years +
1
2
3
4
5
6
7
9
10
12
13
In the event of "counter-notice" ("tegenopzegging",
"contre-préavis") by the worker having found a new
function during the course of his/her notice period
previously notified by the employer, the abovementioned
notice periods will be limited to maximum 4 weeks.
Lastly, according to the new rules, a collective
bargaining agreement concluded at sectorial level may
not foresee more advantageous notice periods (both in
case of dismissal and in case of resignation) to the
workers than those determined in accordance with the
new rules.
However, the proposed bill only refers to sectorial
collective bargaining agreements in this respect.
Therefore, we consider that providing for more
advantageous notice periods in a collective bargaining
agreement concluded at company would still remain
possible.
In addition, the proposed bill is unclear on the fact
whether more advantageous notice periods could be
agreed by individual agreement between the worker
and the employer before the actual termination of the
employment contract.
By taking into account the wording and the purpose of
the proposed bill, we are of the opinion that such
individual agreements would not be possible as of 1
January 2014.
Termination of contracts of definite duration or
contracts for performance of a specific task
Contrary to the current rules as applicable until 31
December 2013, the new rules provide for the possibility
to terminate contracts of definite duration or contracts for
performance of a specific task before their expiration
dates.
As of 1 January 2014, contracts of definite duration/ for
performance of a specific task can be terminated during
the first half of the validity period of the contract, but no
later than six months after the start date of the said
contract.
Due to this new rule, employment contracts of definite
duration will become much more attractive in the
future, as the employer can as of 1 January 2014
terminate these contracts before their expiration
without facing considerable financial liabilities.
We will elaborate further on this topic in one of our
next weekly Be Aware updates.
Transitional provisions applicable to employment
contracts commenced before 1 January 2014
The new rules as of 1 January 2014 will drastically differ
from the rules applicable until 31 December 2013.
Therefore, for safeguarding the legitimate expectations of
the parties to an employment contract commencing
before 1 January 2014 regarding the terms and conditions
of termination of the said contract, the new rules provide
for transitional provisions.
The basic rule of these transitional provisions is to
provide for a mix between the rules applicable until 31
December 2013 and the new rules as applicable as of 1
January 2014 for workers bound by an employment
contract before 1 January 2014: the former rules for
calculating the notice period applicable until 31
December 2013 will in principle apply to the seniority
acquired until the said date, whereas the notice period for
the seniority acquired as of 1 January 2014 will be
calculated in accordance with the new rules.
The new rules also provide for certain specific
transitional provisions applicable to workers considered
as white-collar workers having an annual base
remuneration of 32.254 EUR or more on 31 December
2013, and other derogative transitional provisions
applicable to some workers considered as blue-collar
workers on 31 December 2013.
Transitional provisions applicable to workers
considered as white-collar workers on 31 December
2013
In the event of dismissal by the employer of workers
considered as white-collar workers on 31 December 2013
with an annual base remuneration of 32.254 EUR or
more, the new rules provide for a specific calculation
method for the notice period for seniority acquired until
31 December 2013.
This specific calculation method is primarily intended to
prevent the application of Article 82, §3 of the Law of 3
July 1978 regarding employment contracts, stating that
the worker and the employer must in principle reach an
agreement regarding the length of the notice period after
Hence, the new rules provide that the notice period for
seniority acquired until 31 December 2013 will be equal
to 1 month per commenced year of seniority.
As a consequence, in the event of termination of a whitecollar worker having an annual base remuneration
between 32.254 EUR and 64.508 EUR, it will no longer
be required to reach an agreement with the worker
regarding the length of the applicable notice period after
However, the proposed bill is not clear on the impact
which the "1-month-per-commenced-year-of-seniorityrule"will have on clauses validly concluded in
accordance with Article 82, §5 of the Law of 3 July 1978
regarding employment contracts before 1 January 2014,
according to which the notice periods applicable to white
-collar workers having an annual base remuneration of
more than 64.508 EUR can be limited to three months
per commenced period of 5 years of service.
In our opinion, such valid clauses will remain applicable
to determine the notice period for seniority acquired
until 31 December 2013.
Extremely summarized, the notice period to be respected
by the employer for the years of service acquired by a
white-collar worker until 31 December 2013 will
according to the new rules be calculated as follows:
■ For white-collar workers with an annual base
remuneration of less than 32.254 EUR - 3 months per
started period of 5 years (same rules);
■ For white-collar workers with an annual base
remuneration of at least 32.254 EUR - 1 month per
commenced year of service, with a minimum of 3
months.
As discussed above, we are of the opinion that valid
clauses determining the applicable notice periods for
white-collar workers having an annual base
remuneration of more than 64.508 EUR, which were
concluded before 31 December 2013, will remain
applicable for calculating the notice period for
seniority until 31 December 2013.
In other words, if such clause was concluded validly
before 1 January 2014, we consider that the notice
period for seniority until 31 December 2013 will be
calculated according to the provisions of this clause.
04 | 17049051.1
The total applicable notice period to be respected by the
employer will be equal to the sum of the notice period for
seniority acquired until 31 December 2013 and the notice
period for seniority acquired as of 1 January 2014.
Furthermore, the transitional provisions of the new rules
also provide for a specific calculation method for the
notice period to be respected in the event of resignation
by the white-collar worker.
In that event, the notice period for the seniority acquired
until 31 December 2013 will be equal to at least 1,5
month per commenced period of 5 years of service, but
limited to:
■ Maximum 4,5 months if the worker's annual base
remuneration would be less than or equal to 64.508
EUR;
■ Maximum 6 months if the worker's annual base
remuneration would exceed 64.508 EUR.
The notice period for the seniority acquired as of 1
January 2014 will be calculated in accordance with the
legally determined notice periods as described above.
The total notice period to be respected by the white-collar
worker will in principle be the sum of the notice period
for seniority acquired until 31 December 2013 and of the
notice period for seniority acquired as of 1 January 2014,
unless the following maximum thresholds were already
reached on 31 December 2013:
remuneration would be less than or equal to 32.254
EUR;
■ Maximum 4,5 months if the worker's annual base
remuneration would be between 32.254 EUR and
64.508 EUR;
remuneration would exceed 64.508 EUR.
In that event, the notice period for seniority acquired as of
1 January 2014 will not be taken into account.
Otherwise, if the abovementioned thresholds were not
reached on 31 December 2013, the total applicable notice
period, i.e. in principle sum of both calculations
combined, will in any event be limited to maximum 13
weeks.
Transitional provisions applicable to workers
considered as blue-collar workers on 31 December
2013
The abovementioned harmonized notice periods, in
principle applicable to all workers as of 1 January 2014,
will under specific circumstances not apply to certain
workers considered as blue-collar workers on 31
December 2013, meeting the following requirements:
■ Having acquired at least 1 year of seniority;
■ For whom the notice periods to be respected by the
employer were determined by Royal Decree on 31
December 2013 (in accordance with Article 61 or
65/3, §2 of the Law of 3 July 1978);and
■ These notice periods to be respected by the employer
are lower than the notice periods defined hereafter
(please see below).
In the event of termination of the employment contracts
of the said workers between 1 January 2014 and 31
December 2017 or during a shorter timeframe determined
by a collective bargaining agreement concluded at
sectorial level, the following "transitional notice periods"
will apply:
Dismissal by the
employer
Seniority
- 3 months
3-6
months
6 months 5 years
5 - 10 years
10 - 15
years
15 - 20
years
+ 20 years
Notice
period
2 weeks
4 weeks
5 weeks
6 weeks
8 weeks
12 weeks
Resignation by the
worker
Seniority
- 3 months
3 months 5 years
5 -10 years
10 - 15
years
15 -20
years
+ 20 years
Notice
period
1 week
2 weeks
3 weeks
4 weeks
6 weeks
■ Who usually performing one of the following
professional activities in temporary or mobile work
places: earth/excavation works, trench works,
foundation works, reinforcement works, hydraulic
works, road works, agricultural works, installation of
sanitation facilities, construction works, assembly and
core dismantling works, alteration works, conversion
works, renovation works, demolition works,
conservation works, maintenance, painting and
cleansing works, sanitation works, and finishing
works in the context of one or more of the
aforementioned works.
However, the abovementioned transitional provisions
will not apply to notice periods determined by Royal
Decree in the context of restructuring, bridge pension or
retirement.
Termination in the context of restructuring or
collective dismissal
To the extent that the employer is officially recognized by
the federal authorities as being a company in
restructuring or in difficulties in the sense of the Royal
Decree of 3 May 2007, the notice periods notified by the
employer can be reduced to maximum 26 weeks.
As far as ongoing collective dismissal procedures are
concerned, the rules as applicable on 31 December 2013
will remain applicable to the workers affected by a
collective dismissal procedure which was confirmed at
latest on 31 December 2013.
This topic will be discussed more extensively in one of
our next weekly Be Aware updates, to be sent during the
course of December.
New leave to apply for a new job ("sollicitatieverlof",
"congé de solicitation")
Under the new rules, all workers will during the
performance of their notice periods be entitled to be
absent from work to apply for a new job.
8 weeks
16 weeks
Contrary to the above, the abovementioned "transitional
notice periods" will continuously apply (even after 31
December 2017) to the workers meeting cumulatively the
following requirements:
■ The notice periods to be respected by the worker and
the employer were determined by Royal Decree on 31
December 2013 (in accordance with Article 61 or
65/3, §2 of the Law of 3 July 1978).
During the last 26 weeks of the notice period to be
performed, the worker will be entitled to be absent for 1
full day per week. Before that period and during the
course of the notice period, the worker will be entitled to
be absent for a ½ day per week.
However, when the worker is following an outplacement
training during the course of his/her notice period, he/she
will be entitled to leave work during one or two days per
week, inasmuch as the total duration of his/her absence
would not exceed the period of time equivalent to one
working day per week.
■ Having no fixed work place; and
Additional indemnities due to and after dismissal
Abolition of the "unfair dismissal" principle
Under current Belgian labour law, several collective
bargaining agreements concluded at sectorial level
provide for additional indemnities which are paid to the
workers due to and after a dismissal. These additional
indemnities are paid on top of the notice period or
indemnity in lieu of notice.
Article 63 of the Law of 3 July 1978 regarding
employment contracts is expected to be abolished in the
future, but will nevertheless remain applicable to bluecollar workers until the entry into force of a collective
bargaining agreement or a similar regulation setting forth
the employer's obligation to motivate the dismissal
reasons (see 2.4.).
The new rules intend to restrict this by prohibiting
payment of these additional indemnities as of 1 July
2015, to the extent that the amount of said additional
indemnity would be less than the difference between the
total dismissal costs of the notice period or indemnity in
lieu of notice in accordance with the new rules and the
total dismissal costs of the notice period or indemnity in
lieu of notice in accordance with the rules as applicable
on 31 December 2013.
Instead, if the amount of the additional indemnity would
be higher than the difference between both methods for
calculation of notice periods, then payment of an
additional indemnity equal to the difference between
both amounts will remain possible.
However, the abovementioned rule is not applicable to
collective bargaining agreements providing for terms and
conditions regarding bridge pension, concluded in a Joint
Committee or in the National Works Council.
Obligation to motivate the dismissal reasons
As of 1 January 2014, employers will in principle be
required to motivate the reasons for dismissal of a
worker.
However, this obligation is still to be determined for the
employers resorting under the Law of 5 December 1968
by a collective bargaining agreement which must be
concluded in the National Works Council having
obtained universal binding force by a royal decree at
latest on 31 December 2013. For the employers not
restoring under the law of 5 December 1968 a similar
regulation is to be provided.
We expect this new rule to have a major impact on
litigation procedures in the context of individual
employment relations, as workers will presumably have
more arguments to contest the dismissal decision taken
by the employer.
We will elaborate further on this topic in one of our next
weekly Be Aware updates, to be sent during the course of
December.
06 | 17049051.1
We will elaborate further on this topic in one of our next
weekly Be Aware update..
The "compensatory dismissal indemnity" for (former)
blue-collar workers
As discussed above, the new rules will provide for
harmonized notice periods applicable to both (former)
blue-collar and white-collar workers as of 1 January 2014
and do not in principle determine the notice periods
applicable before the said date, with the exception of
certain specific transitional provisions (please see above
under 2.1.3 for further detail).
For seniority acquired until 31 December 2013, the notice
periods applicable to blue-collar workers will thus remain
lower than those applicable to white-collar workers.
According to the new rules, notice periods calculated for
seniority acquired both before and after 1 January 2014
will in principle be calculated in accordance with the
former rules for seniority acquired until 31 December
2013, and in accordance with the new rules for seniority
acquired as of 1 January 2014.
As a consequence, according to the new rules, the notice
periods applicable to the (former) blue-collar workers for
seniority acquired before and after 1 January 2014 will
thus remain lower than those applicable to the (former)
white-collar workers.
For compensating this, the new rules stipulate that bluecollar workers could be entitled to a "compensatory
dismissal indemnity" ("ontslagcompensatievergoeding",
"indemnité en compensation du licenciement") paid by
the National Employment Services ("RVA", "ONEM"),
provided:
■ The blue-collar worker concerned can demonstrate
having acquired seniority before 1 January 2014;
■ The blue-collar worker does not benefit from the
transitional notice periods as determined above under
2.1.3.2;
■ The blue-collar worker must have acquired at least
the following seniority level:
■ At least 30 years on the date of publication of
the new regulations in the Belgian National
Gazette;
■ At least 20 years on 1/1/2014;
■ Less than 10 years on 1/1/2018;
■ The blue-collar worker is dismissed after 31
December 2013; and
■ The indemnity in lieu of notice to which the bluecollar worker is entitled in accordance with the new
rules for seniority acquired both before and after 1
January 2014 (i.e. two separate calculations, please
see above for further detail), would be less than the
indemnity in lieu of notice to which he/she would be
entitled in the assumption that all seniority was
acquired as of 1 January 2014 (i.e. the notice period/
indemnity in lieu of notice entirely calculated in
accordance with the new harmonized notice periods).
allowances in accordance with the rules applicable on 31
December 2013.
**********
In our next special Be Aware newsflashes, we will
provide you with a weekly update of the status of the
draft bill and will also discuss amongst others the
following topics:
■ Additional compensatory employer contributions to
the Fund for closing of companies ("Fonds voor
sluiting van ondernemingen", "Fonds de fermeture
des entreprises")
■ New outplacement guidance conditions
■ Abolition of the probationary period
■ New rules regarding sickness leave and incapacity to
work
■ Measures to promote employability
If these conditions were cumulatively met, the National
Employment Services will pay to the blue-collar worker
a compensatory dismissal indemnity equal to the
difference between the amount of the indemnity in lieu of
notice for seniority acquired before and after 1 January
2014 and the indemnity in lieu of notice which would be
due in the assumption that seniority was entirely acquired
as of 1 January 2014.
The compensatory dismissal indemnity paid by the
National Employment Services is exempt from tax and
social security contributions.
In addition, the compensatory dismissal indemnity is
considered as a regular indemnity in lieu of notice in the
context of unemployment and can therefore not be
combined with unemployment allowances.
Further, the compensatory dismissal indemnity cannot
be combined with the integration indemnity
("inschakelingsvergoeding","indemnité de reclassement")
paid to blue-collar workers participating to an
employment action group set up in the context of a
company restructuring.
Lastly, blue-collar workers not being entitled to a
compensatory dismissal indemnity remain nevertheless
entitled to payment of the other existing dismissal
This publication is intended as a general overview and discussion of the subjects dealt with. It is not intended to be, and should not be used as, a substitute for taking
legal advice in any specific situation. DLA Piper UK LLP and DLA Piper SCOTLAND LLP will accept no responsibility for any actions taken or not taken on the basis of
this publication. If you would like further advice, please speak to your DLA Piper contact on 08700 111 111.
www.dlapiper.com
DLA Piper UK LLP is authorised and regulated by the Solicitors Regulation Authority. DLA Piper SCOTLAND LLP is regulated by the Law Society
of Scotland. Both are part of DLA Piper, a global law firm operating through various separate and distinct legal entities. For further information
please refer to www.dlapiper.com
UK switchboard: +44 (0) 8700 111 111
Copyright ©2012 DLA Piper. All rights reserved. | DEC 13 | Ref: UKG/DPLDS/BIR/17049051.1

Europe - DLA Piper

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