I Introduction

Employment law in Belgium is mainly based on international and domestic sources. International sources include international treaties; European law, including case law of the European Court of Justice; and International Labour Organization (ILO) conventions. Domestic sources of law include the Constitution; legislation, in particular the Act on Employment Contracts (AEC) of 3 July 1978; decrees of the regions and communities; royal and ministerial decrees; collective labour agreements (CLAs); employment contracts; work rules; and custom.

Furthermore, case law, in particular that of the Supreme Court and the Constitutional Court, can have considerable influence on the state of the law.

When rules deriving from different sources appear to be inconsistent with one another, different sets of rules apply to determine the rule that will prevail. For example, international law prevails over national law whenever it is directly applicable, and inconsistency between national sources is resolved by Article 51 of the Collective Labour Agreements and Joint Committees Act of 5 December 1968, establishing a hierarchical classification for most of these sources. For example, a custom or a verbal individual agreement deviating from a written individual agreement serves no purpose legally.

In Belgium, labour courts deal with disputes in relation to employment relationships. Labour courts are independent judicial bodies whose jurisdiction covers all matters relating to labour and social security law. The bench comprises one professional judge and two lay judges, one representing the employers and the other the employees. The procedure is accessible to litigants in person. Litigants may be represented by a member of the Bar. Furthermore, workers may be represented by a member of the trade union to which they belong. Enforcement of labour law provisions may also be initiated by other authorities, including the labour inspectorate or tax and social security authorities.

The decisions of the labour courts may be reviewed by a labour court of appeal, which has a composition similar to that of the labour courts. Appeals against decisions by a labour court of appeal that would constitute a violation of the law may be lodged with the Supreme Court.

The General Directorate for Supervision of Social Legislation (also called the Social Legislation Inspectorate), which is a department of the Federal Public Service for Employment, Labour and Social Dialogue, provides information to employers and workers, gives advice, arbitrates and verifies whether labour law and the various collective labour agreements are complied with. It plays an important role with regard to disputes in individual labour law. Its actions span from preparing drafts of bills and overseeing the operation of existing employment legislation, to registering collective labour agreements, and publishing practical comments on the legislation. Belgian labour law is related to criminal law, with the exception of the Act on Employment Contracts of 3 July 1978 (see Section II, infra). The Social Legislation Inspectorate can draw up a police report, which could lead to criminal prosecution of the employer.2

II YEAR IN REVIEW

The Act of 26 December 2015 containing measures regarding the reinforcement of job creation and purchasing power extends social security contribution reductions for first hirings up to the sixth hiring. It also decreases social security contributions supported by the employer from around 33 per cent of the gross salary in 2015 to 25 per cent in 2018.

The Act of 29 February 2016 introduces new criminal and administrative offences in the Penal Social Code, in various fields and mainly for undeclared work and psychosocial risks at work.

The Royal Decree of 13 March 2016 allows night work for all activities related to e-commerce in the undertakings that belong to Joint Committee No. 201 for independent retailers, Joint Committee No. 202 for retailers in the food sector, Joint Committee No. 311 for big retail undertakings and Joint Committee No. 312 for supermarkets.

On 8 June 2016, Belgium ratified Convention No. 167 of the ILO on health and safety in the construction sector and Convention No. 175 on part-time work.

The Royal Decree of 28 October 2016 amends the Royal Decree of 28 May 2003 pertaining to the surveillance of employees’ health so that a tailor-made reintegration path is set in place for long-term sick employees. Consequently, it is expected that they will more easily progress towards an adapted job or another temporary or permanent job.

Social elections for the works councils, as well as for the committees for prevention and protection at work, were held between 9 May 2016 and 22 May 2016.

III SIGNIFICANT CASES

In a judgment of 15 February 2016, the Supreme Court ruled that an employer who leases out his or her employees to a user in violation of the prohibition to lease out employees, imposed by the Act of 14 July 1987 on the leasing out of employees, might be unable to rely on the contract that formalises such a leasing out in order to claim the payment of his or her bill by the user.

In a judgment of 6 June 2016, the Supreme Court considered that when assessing the validity of a cause for dismissal without notice or indemnity, the judge could not take into consideration the possible disproportion between the cause for dismissal and the sanction imposed by law (no notice or indemnity) so long as the cause is such that it renders immediately impossible the pursuit of the work relationship.

In a judgment of 30 June 2016, the Constitutional Court ruled that Article 63 AEC combined with Article 38 of the Act of 26 December 2013, harmonising the status of blue-collar and white-collar workers, runs contrary to the principle of equality and non-discrimination, on the grounds that it provides for a specific regime of abusive dismissal for blue-collar workers of the public sector, whereas the rules for abusive dismissal should be the same for both blue-collar and white-collar workers of the public sector. The practical impact of this ruling is that public authorities should take their inspiration from the rules for abusive dismissal of CLA No. 109 on the motivation of dismissal, which is applicable in the private sector, awaiting a similar legislative intervention in the public sector.

IV BASICS OF ENTERING AN EMPLOYMENT RELATIONSHIP

i Employment relationship

In principle, an employment contract may be written or oral. Nevertheless, many provisions must be provided in writing, including:

  • a training clause (Article 22 bis AEC);
  • b non-compete clause (Articles 65, 86 and 104 AEC);
  • c employment contracts concluded for a definite period of time, or for a specific project (Article 9 AEC);
  • d part-time work (Article 11 bis AEC);
  • e temporary work or interim work (Act of 24 July 1987);
  • f work from home (Article 119.1 to 119.12 AEC);
  • g employment contracts concluded with a foreign worker in certain cases (Article 12 and 13 Royal Decree of 9 June 1999);
  • h employment contracts concluded to replace an employee temporarily absent (e.g., on maternity or sick leave (Article 11 ter AEC)); and
  • i employment contracts concluded with a student (Article 123 AEC).

For some of these exceptions, the contract must be signed before workers actually commence work. Sanctions range from nullity (e.g. for a non-compete clause) to the legal presumption that the contract has been concluded for an indefinite period (fixed-term employment contracts or those for a specific project).

Parties can amend the employment contract orally. The law does not impose the presence of a written agreement. The agreed conditions or stipulations of the labour contract cannot be changed unilaterally. However, parties can specify that the employer has the right to change the job function or the working location unilaterally. Without prejudice to the above-mentioned stipulations, the law does not in principle impose the presence of particular clauses in the employment contract. The imperative legal and regulatory conditions, as well as the collective labour agreements in general, are, however, deemed to form an integral part of the employment contract and no clause may validly depart from this.

With regard to the work rules, these must contain certain clauses, particularly with respect to the duration and hours of employment, reprehensible behaviour and associated disciplinary sanctions, the method and period for payment of remuneration, and terms and conditions for the allocation of annual leave. These clauses are also deemed to form an integral part of the employment contract, except in cases of individual written exceptions.

Employment contracts concluded for a definite period of time, or for a specific project, must give precise indications of the definite period, the specified work (i.e., the job performed) or mention that the contract is for the replacement of an employee (who is identified in the contract).

Part-time contracts must state the system and hours of part-time work agreed upon. In the absence of a written document containing these specifications, the employee may choose the system and hours of part-time work most favourable to him or her, among those provided for in the work rules or in any other company document. According to CLA No. 35 of 27 February 1981, the written contract of employment may either make explicit mention of the system and hours of work, or refer to the systems of part-time work entered in the work rules or those laid down by joint committees at the level of the undertaking.

When it is in written form, a contract of employment must be worded either in French, Dutch or German. The rule about which language is applicable depends on the location of the employer’s operational headquarters (see Section IX, infra).

ii Establishing a presence

Every company that employs workers in Belgium must be registered with the Belgian National Office for Social Security (NOSS). This registration is automatically done by the immediate declaration of employment via the Dimona system. This declaration must be made through the NOSS website.3 For certain specific activities, such as temporary work, an agreement must be obtained. Social security contributions of employees are withheld at source and paid by the employer to the mutual insurance organisations responsible for administering the social security system. The employer is also required to deduct taxes monthly.

Non-Belgian employers who wish to employ someone in Belgium must declare these activities in advance, using the mandatory International Migration Information System (Limosa) declaration.4 In certain cases the foreign employer must apply for an employment authorisation for its activities in Belgium and its employees must have a Belgian work permit. This obligation is applicable to service provision in the form of temporary-employment business work, provision of labour, exchange between related companies, and the execution of (sub)contracting agreements.

If a foreign employer employs Belgian residents in Belgium, this foreign employer will be deemed as having a Belgian establishment. In this respect the foreign employer must comply with various tax formalities. It must make the professional income tax deductions, file special individual forms5 as well as a summary form6 to report the salaries paid to its Belgian employees. As long as Belgian employees carry out operations subject to Belgian VAT, the foreign employer will have to register with the Belgian VAT authorities. In this respect, monthly or quarterly VAT returns should be filed.

V RESTRICTIVE COVENANTS

Non-compete clauses can be executed during or after employment. Non-compete clauses must be in writing and are valid if the employee’s annual gross remuneration exceeds €33,221. There are also restrictions on their applicability if the annual gross remuneration does not exceed €66,441 (these amounts, applicable for 2016, are updated annually).

In general, a non-compete clause is valid if it is limited to activities similar to those presently performed by the employee and to a well-defined geographical area limited to the national territory, if the new employer is a competitor, and provided the clause does not exceed 12 months. Except for sales representatives, the clause must provide for the payment of an indemnity to the employee equal to at least 50 per cent of the salary corresponding to the duration of the non-compete provision. The clause is not applicable if the employer terminates the contract with a notice period or an indemnity in lieu of notice or if the employee puts an end to the agreement on the basis of a serious breach committed by the employer. Specific rules apply to international companies.

Provided that some specific requirements are met, various departures from the conditions of the general non-compete clause may be made (i.e., the ‘special non-compete clause’). This clause may only be used for certain categories of enterprises and for white-collar employees (except sales representatives) with specific functions.

The enterprises concerned have to comply with one of the following conditions:

  • a they must have an international activity or considerable economic, technical or financial interests on the international markets; or
  • b they must have their own research departments.

In such enterprises, the special non-compete clause may be applied only to those employees whose work allows them to directly or indirectly acquire a practice or knowledge peculiar to the enterprise, the use of which outside the enterprise could be prejudicial to it.

If these conditions are met, it is possible to deviate from the general non-competition clause on the points of limitation to the national territory and the maximum period of 12 months. The special non-compete clause may also be applicable when the employment contract is terminated by the employer without just cause after six months from the beginning of the contract and if the contract is terminated during the same six-month period.

VI WAGES

i Working time

Working time means the time during which a worker is available to the employer (in other words, the time during which he or she is under an employer’s authority) and that the employee cannot use freely as he or she sees fit. Accordingly, working time may be more extensive than the periods during which work is actually performed (e.g., on-call period during on-call duty). Working time may not exceed eight hours a day. Moreover, daily work must in principle be performed between 6am and 8pm because of the ban on night work.

In some cases, however, daily working time may be increased as follows:

  • a nine hours if the worker does not work more than five-and-a-half days a week (work schedule in which the worker, in addition to his or her weekly day of rest, has at least half a day’s rest); and
  • b 10 hours if the worker is absent from home for more than 14 hours a day because of the distance between the workplace and his place of residence or temporary accommodation.

Except for derogations (laid down by royal decree or collective agreement), the length of each work session may not exceed three hours.

In Belgium, working time may not exceed 40 hours a week. On 1 January 2003 a rule was introduced under which working time was generally reduced to 38 hours a week. Under this general reduction to 38 hours, the weekly work schedule that can be applied in undertakings is either 38 effective hours a week, or 38 hours on average over a specified reference period that allows employers to maintain a 40-hour-a-week work schedule by granting compensatory days off.

In principle, night work is prohibited. ‘Night work’ means any work performed between 8pm and 6am. This rule applies without distinction between male and female employees. There are a number of derogations from this principle relating to industrial sectors, particular activities or particular workers. A number of derogations are provided for by law concerning cases in which night work is regarded as normal or inherent in the activity pursued (e.g., the transport sector, energy distribution companies, hospitals, the catering sector (hotels, restaurants, off-licences), surveillance activities and particular cases of force majeure). Night work may also be permitted by royal decree in particular industrial sectors, undertakings, occupations, or for the execution of particular types of work.

ii Overtime

Particular types of overtime require:

  • a either prior authorisation by royal decree for the following:

• transport operations, loading and unloading (maximum 11 hours a day and 50 hours a week);

• sectors where the substances processed can degenerate very quickly (maximum 11 hours a day and 50 hours a week); and

• work, the execution time of which cannot be clearly defined, because of the nature of that work (maximum 11 hours a day and 50 hours a week); or

  • b prior authorisation by the trade union representative and the district inspector or head of the General Directorate for Supervision of Social Legislation (in the absence of a trade union representative, authorisation by the inspector or head of district suffices) in case of exceptional increase of work (maximum 11 hours a day and 50 hours a week).

Overtime may also be performed in case of force majeure:

  • a without any particular formality:

• to carry out work for third parties to deal either with the threat of an accident or with an accident that has occurred;

• to carry out urgent work on machinery or equipment for third parties;

• to carry out work within the undertaking to deal with the threat of an accident or an accident that has occurred; or

• to carry out urgent work within the undertaking on machinery or equipment; or

  • b with the prior agreement of the trade union representative (or a posteriori information to the representative) and notification of the inspector or head of district for work necessary because of unforeseen circumstances (maximum 11 hours per day and 50 hours per week).

The normal working time limits may also be exceeded for stock-taking (maximum 11 hours per day and 50 hours per week). This derogation may be used only in respect of work effectively carried out for a period of seven days per worker and per calendar year.

In most cases in which the normal limits on working time may be exceeded, compensatory rest periods must be granted to ensure that the normal weekly working time (38 hours or that determined by collective agreement) is complied with over a reference period. In principle, this reference period is three months (one-quarter). It may, however, be increased to one year by royal decree, a collective agreement or, in the absence of a royal decree or collective agreement applicable to the undertaking, by the undertaking’s terms and conditions of employment.

Derogations giving rise to compensatory rest periods are:

  • a working in successive shifts;
  • b continuous work for technical reasons;
  • c work to which the normal working time limits cannot be applied;
  • d preparatory and follow-up work;
  • e transport operations, loading and unloading;
  • f work whose execution time cannot be determined;
  • g working with substances that degrade quickly;
  • h exceptional increase of work;
  • i work necessary because of unforeseen circumstances; and
  • j work to deal with the threat of an accident or an accident that has occurred or urgent repairs to machinery or equipment by workers of a third party.

Apart from the rules concerning the granting of compensatory rest periods, particular instances in which the normal working time limits are exceeded also give rise to overtime payment as a supplement to the normal wage or salary.

All work done in excess of the limits of nine hours a day and 40 hours a week (or lower limits determined by a collective agreement involving an effective reduction of daily or weekly length of working time) give rise to entitlement to overtime payment. The rate of overtime payment is 50 per cent extra for hours worked during the week, including on Saturdays, and 100 per cent extra for hours worked on Sundays or public holidays. Overtime payments must be calculated on the basis of ordinary remuneration (i.e., the average hourly wage that should be paid for the day or week when the worker did overtime).

Derogations giving rise to overtime payment are:

  • a preparatory or follow-up work;
  • b transport operations, loading and unloading;
  • c work for which the execution time cannot be determined;
  • d working with substances that may degenerate very quickly;
  • e exceptional increase in workload;
  • f work justified by unforeseen circumstances;
  • g work carried out to deal with either an accident that has occurred, or with a new accident, or urgent repair work to machinery or equipment; and
  • h work on stocktaking and preparing balance sheets.

VII FOREIGN WORKERS

There is a general obligation to notify the Belgian authorities of foreign employed or self-employed persons.

Some categories of persons are, however, exempt from this notification because of the nature or short duration of the activities carried out in Belgium (artists, international transport sector employees, diplomats, participants in scientific conferences, etc.). Belgian law requires, with a number of exceptions, every employer to draw up terms and conditions of employment and to maintain a staff register.

If posting a worker to Belgium, an employer who has served a Limosa notification or who enjoys dispensation in this regard, is exempt from the obligation to draw up and maintain social documents, such as a staff register, for six months.

As the terms and conditions of employment contain particular information (schedules of working hours, the method of wage and salary payment, etc.), it constitutes a basic document against which it is verified whether certain fundamental rules of labour law are being applied correctly (working time, rest time, etc.). It is also an important instrument for the employer to detail a number of special obligations for their employees.

Through the staff register, an employee can be lawfully listed.

In principle, nationals from an EEA country may be hired without specific restrictions, while other foreigners need to obtain a work permit. Exceptions do exist, however. For example, Belgium-based headquarters of Belgian or foreign companies are not required to obtain work permits for non-EEA citizens employed in a managerial position (e.g., project managers, leaders of research and development teams, planning engineers, CEOs, CFOs) provided well-defined conditions are met.

In general, foreign employees are subject to the majority of the rules that apply to Belgian employees. Moreover, the majority of social law stipulations subject to penal sanctions are also applicable to employees temporarily posted to Belgium.

VIII GLOBAL POLICIES

Rules of work must be established in every enterprise, even if there is only one employee present. The works council is competent to draft and amend the work rules and to take all steps required for informing the employees thereof. If there is no works council, the trade union representatives or the employees must approve the rules. The Act of 8 April 1965 lays down the procedure to be followed. If there is no works council, proposals for the establishment of rules of work must be made by the employer, who must bring such proposals to the attention of the employees by posting notices.

The work rules must contain the offences and their related sanctions and the possibilities of redress open to employees who wish to object to the sanctions. All sanctions (fines, suspension, etc.) applied must be specified in the work rules. The first working day after becoming aware of the infringement, the employer or its representative must communicate the sanctions to the employee. The employee’s name, the date, justification and sanction have to be registered. Although work rules are binding on employer and employees, they can be derogated from in an individual contract of employment. Work rules are only binding on individual employees when they have received a copy from their employer, even if they were informed through different channels.

Belgian law generally prohibits direct and indirect discrimination. Equal treatment is the subject of an Act of 10 May 2007, combating discrimination based on gender. Discrimination on the basis of gender is forbidden, as well as on the basis of pregnancy, birth, maternity or change of gender. Two other Acts of 10 May 2007 concern the prohibition of certain forms of discrimination, racism and xenophobia. The first Act aims at creating a general framework for prevention of discrimination on the grounds of age, sexual orientation, civil status, birth, finances, religion or belief, political opinions, language, present or future health, handicaps, physical or genetic characteristics or social origin. This Act applies to all individuals in both the public and private sectors, including in relation to employment issues. Chapter V bis of the Act of 4 August 1996 contains measures aimed at preventing harassment and violence at work as well as a procedure for handling harassment and violence claims and punishing harassment or violent misconduct in the workplace.

IX TRANSLATION

Belgium is a multilingual federal state made up of regions (Brussels, Flanders and Wallonia) and communities (French, Flemish and German-speaking).

The language for ‘social relations’ between employers and employees, as well as for company documents prescribed by law, varies from one linguistic region to another.

The rules that apply depend on the location of the employer’s operational headquarters. If this is in Flanders, the language used must be Dutch.7 If it is in Wallonia, it must be French.8 If it is in the German-speaking community, it must be German.9 If it is in the bilingual Brussels region, either French or Dutch may be used, depending on the language of the employee.10 The employer may add a translation into one or more languages.

In Flanders and Wallonia, these language requirements also apply to any other official written documents and oral communications. If they are not observed, the documents and communications concerned are deemed null and void.

In the Brussels region and in the German-speaking community, the above-mentioned language rule applies to any official written documents, but not to oral communications. Failure to use the correct language does not have any direct consequences as long as the employer issues a new document to replace the incorrect one: the replacement applies ab initio.

Given the broad interpretation of ‘social relations’ by Belgian courts, all documents containing instructions, communications and specific information for the employees should be drafted in the correct language.

In a judgment of 16 April 2013 (case C-202/11), the European Court of Justice has ruled that EU law must be interpreted as precluding legislation of a federated entity of a Member State, such as that applicable in Flanders, which requires all employers whose established place of business is located in that entity’s territory to draft cross-border employment contracts exclusively in the official language of that federated entity, failing which the contracts are to be declared null and void by the national courts of their own motion.

The Flemish Decree on the use of languages in social relations has been modified with a view to ensuring compliance with that ruling. It now provides that a version having legal force may be established for employment contracts in one of the languages of the EU understood by all the parties concerned in cases where the employee may claim free movement rights on the basis of EU law or of any other international or supranational treaty. In case of conflict with the Flemish version, the Flemish version of the contract will prevail.

X EMPLOYEE REPRESENTATION

A works council is a joint committee at enterprise level designed to foster employer and employee consultation and collaboration. It comprises the head of the enterprise, assisted by a number of senior executives and an elected workers’ delegation. The works council has competence in four areas:

  • a the right to information;
  • b advisory competence;
  • c decisive competence; and
  • d managerial competence.

In terms of content, they are competent at the technical, economic and social level.

Works councils must be set up in the private sector. Works council elections have to be held in enterprises (i.e., technical operating units) employing at least 100 workers. These elections are held every four years by the employer (head of the enterprise), who is statutorily obliged to do so. Electoral guidelines are regulated by Royal Decree, largely along established lines.

The works council meets at least once a month at the request of the head of the enterprise or at least one-third of its members. The premises and supplies required for meetings shall be made available by the employer, and the employer must also give the representatives the necessary time off – with pay – and facilities to enable them to perform their task as well as possible. Under certain conditions, the representatives are entitled to participate in labour education programmes during working time, while retaining their pay. Workers’ representatives and the non-elected candidates enjoy special protection against dismissal.

At the company level, there are three representative bodies: the works council, the committee for prevention and protection in the workplace and the staff representatives’ delegation.

The members of the works councils and the committees are elected by all staff members (even if they are not part of a trade union) from electoral lists presented by the three most important trade unions. If there are more than 15 employees with higher qualifications (e.g., a master’s degree) who are employed in managerial positions (known as cadres), a separate representation is provided for them in the works council. As far as the nominations for the candidates are concerned, the monopoly of the traditional representative trade unions is no longer in place. Nominations can now be made by the traditional representative trade unions, the representative unions of cadres, or by 10 per cent of the cadres in the enterprise, thus allowing for independent candidates.

XI DATA PROTECTION

The protection of personal data concerning workers is regulated by, among others, the Act of 8 December 1992 concerning the protection of privacy in the filing and manipulation of personal data. The law is applicable to the treatment of personal data by an employer. If the processing is done in a foreign country, Belgian law states that the transfer of personal data is subject to certain conditions. The law differentiates between the transfer within EU Member States and a transfer to other states.

Because every Member State must transpose EU legislation into national law, in each EU Member State personal data is protected by national legislation. Therefore, Belgian law follows the requirements of the EU Data Protection Directive and states that such transfers are authorised. The employer will have to comply with the national legislation if it intends to proceed with the treatment of that personal data after the transfer.

For non-EU Member States, Belgian law states that, in principle, the transfer of personal data, in view of the conditions for its processing, may only be done if the destination country has an appropriate level of personal data protection. The law states that the level of protection must be considered, taking into account all the circumstances of the transfer.

Biological tests, medical examinations or other reasons for gathering medical information (orally) regarding the state of health or that of an employee or a job candidate (or of their family) may only be performed for reasons relating to the actual state of health of an employee with regard to the specific requirements of the job. Predictive genetic examinations and AIDS/HIV tests are prohibited.11 It is forbidden to gather data that could indicate racial or ethnic origin, political opinions, religious or philosophical convictions, membership of trade unions or information concerning the sex life of citizens in general. Obviously this also applies to employees. The processing of sensitive personal data is allowed should it be necessary for purposes concerning labour law, social security or preventive medicine.

Personal information may only be stored and used if the reasons for doing so have been clearly announced and fully justified. Employees may be informed concerning:

  • a the kind of data being stored;
  • b for what purposes;
  • c how it is kept; and
  • d who is using it.12

At the same time, the possibility for the individuals concerned to control any data about themselves has been recognised. They have the right to be informed and the right to correct the collected information. A special public body – the Commission for the Protection of Privacy – has been created to exercise surveillance over the use of data.

XII DISCONTINUING EMPLOYMENT

i Dismissal

Since 1 April 2014, all workers have the right to know the concrete reasons that have led to their dismissal. Previously, except in certain situations, only blue-collar workers and workers dismissed for serious wrongdoing enjoyed that right. Workers may also seek damages if they consider that they have been dismissed on manifestly unreasonable grounds. In practice, the grounds for termination will often be stated in the document that employers submit to the National Employment Office. This document is at the same time communicated to the employee so that he or she may claim unemployment benefits.

Normally, there are no notification and consultation procedures unless there is a collective dismissal or plant closure, or if a collective bargaining agreement provides for a specific procedure. Offers of suitable alternative employment are not required.

The termination of an employment contract is always definitive. The only remedy is financial compensation. There is no possibility for obligatory reinstatement of the employee. Certain categories of employees are statutorily protected against dismissal, such as members and candidates of the works council, members of a trade union delegation, pregnant employees and employees on maternity or parental leave.

Employment contracts concluded for an indefinite period may only be terminated by one of the parties through prior notification of a notice period. Termination for serious reason constitutes, in principle, the only permissible circumstance for unilateral termination without prior notice. In practice, however, it is possible for either of the parties to terminate the contract without prior notice, provided compensation is paid.

Since 1 January 2014, notice periods are the same for all workers in all sectors subject to exceptions. It is not clear whether the employer and employee are able to agree on a notice period different from that contained in the AEC, but there is no provision in the AEC that would suggest that it is prohibited, as long the different provision is favourable to workers.

ii Redundancies

Where multiple redundancies qualify as a collective dismissal, the legislation on collective dismissals applies and possibly the legislation regarding the closure of enterprises. A collective dismissal triggers the prior information and consultation obligations towards the employees (either through the works council or, if there is none, the union delegation, or, failing this, the employees in person). The intention to proceed with collective dismissal must also be communicated to the competent administration (the director of the sub-regional employment office). In principle, a collective dismissal gives rise to the payment of a special monthly compensation in addition to any indemnity due in lieu of notice.

In the majority of cases, employers and trade union organisations establish a social plan granting additional compensation to the workers concerned and other measures with a view towards reducing the consequences of collective dismissal (e.g., early retirement schemes).

Note that the concept of collective dismissal varies according to whether consideration is given to the right of employees to prior information and consultation, or to the right of employees to receive compensation.

XIII TRANSFER OF BUSINESS

Under Belgian law, the consequences for employees of a transfer of an undertaking or a part thereof are governed by the Collective Labour Agreement No. 32 bis of
7 June 1985 (CLA 32 bis), which transposed into Belgian law EU Council Directive 77/178/EC of 14 February 1977 (replaced by the EU Council Directive 2001/23).

i Information and consultation prior to the transfer

Under Belgian law, an employer who intends to amend the structure of the company (merger, concentration, takeover, closure or other important structural amendments negotiated by the company) has an obligation to inform and consult the employees’ representatives (i.e., the representatives in the works council or the trade union delegation) or the employees directly about such a project.

Such information and consultation should take place before the decision on the planned change in structure. The employees’ representatives must be consulted, in advance, in particular with regard to the repercussions on the employment prospects for the personnel, the work organisation, and the employment policy in general.

Failure to comply with this obligation would render the employer liable to criminal sanctions (a fine of between €300 and €3,000 to be multiplied by the number of workers employed within the company, up to a maximum of €300,000), in accordance with Article 196 of the Penal Social Code.

ii Consequences of transferring the employment contract
Automatic transfer of the contracts

In the event of a transfer within the meaning of CLA 32 bis, the rights and obligations of the transferring employer arising from the employment contracts existing on the date of transfer are automatically transferred to the new employer (transferee).

The transferee automatically takes over all rights and obligations of the transferring employer, without any specific formalities having to be complied with. Only for old age, health-related or survivor’s benefits under complementary company or inter-company schemes, does CLA 32 bis not provide for an automatic transfer.

After the date when the transfer takes effect, the transferee must respect all individual and collective employment agreements under the same conditions as the transferring employer. It follows that all essential employment conditions (including remuneration, job status, acquired seniority, place of performance and working conditions) should remain unaffected; the new employer may not modify them unilaterally after the transfer date.

Liability

After the date when the transfer takes effect, the transferee becomes solely liable for all debts resulting from the transferred employment contracts, including payment of indemnities in the event of dismissal of any of the transferred employees. For debts already existing at the date of transfer (e.g., salary arrears), the transferor and the transferee will both be liable (in solidum).

Prohibition against dismissal
Principles

Pursuant to CLA 32 bis, it is prohibited to dismiss employees on the grounds of the transfer of the undertaking within which they are employed. This prohibition applies to both the transferor and the transferee. Moreover, it concerns not only the dismissal concomitant to the transfer, but also any dismissal occurring a short time before or after the transfer.

Failure to comply with this obligation would render the employer liable to an administrative penalty consisting of a fine of between €60 and €600 multiplied by the number of workers affected up to a limit of €60,000.

In addition to these administrative sanctions, it should be noted that any employee illegally dismissed by the transferor will have the possibility to introduce a court procedure against both the transferor and the transferee in order to obtain the payment of a termination indemnity or damages (the illegality of the dismissal does not have as a consequence that the dismissal would be considered null and void). Case law generally sets the amount of the damages between €500 and €10,000.

Derogations

CLA 32 bis provides for some derogations to the prohibition against dismissal. They concern, on the one hand, some categories of employees (such as employees nearing the retirement age and students) and, on the other hand, some reasons to dismiss. This second kind of derogation relates to the dismissal for serious reasons and to dismissals based on technical, economic or organisational reasons implying changes in employment within the undertaking. If an employee is dismissed without any of these reasons being present before the moment of transfer, then according to the case law of the European Court of Justice, this employee must still be considered as an employee of the enterprise, meaning that his employment contract will have to be regarded as legally transferable to the transferee. If in the end, the transfer results in a significant change of the working conditions to the detriment of the employee, the employment contract will be considered to be breached by acts on part of the employer.

These protection rules apply in the event of a transfer of enterprise by virtue of an agreement. When the transfer occurred within the framework of a legal composition procedure, CLA 32 bis provided for some exceptions to these rules. As a result of the Act of 31 January 2009 concerning the continuance of undertaking, the legal composition procedure has been replaced by a new procedure. Article 61 of this Act regulates the position of the employees in the event of a transfer of enterprise under judicial authority. The regulation applied here means that the protection rules are defined less stringently so that the transferee has more flexibility. For example, it is easier for a transferee to change the collective and individual working conditions, and he or she is no longer obliged to take over all employment contracts.

XIV OUTLOOK

A centre-right federal government was formed after the general elections of 25 May 2014. In October 2014, this government put forward an action plan setting out the political initiatives it is willing to see through during its four-year term. Among the measures pertaining to employment law that were envisaged, particularly noticeable was the desire to reduce the wage gap with neighbouring countries through measures such as wage moderation and reduction of social security contributions.

While wage moderation has already been implemented over the last few years, the federal government intends to amend the Act of 26 July 1996 pertaining to the promotion of employment and the preventive safeguarding of competitiveness, particularly with a view to reinforce control on wage moderation and to take account of the past when calculating the expected evolution of wages in Belgium compared to neighbouring countries. A progressive reduction of social security contributions from 33 per cent in 2015 to 25 per cent in 2018 has already been enacted in the Act of 26 December 2015 as part of a tax shift from labour to other sources of financing (see Section II).

The government finally wants to simplify and modernise the labour legislation related, in particular, to working hours, homeworking, groupings of employers, interim work, part-time work, etc. The expression ‘feasible work’ has been put forward by the Minister for Employment, with a view to triggering a debate about the need for more flexible working arrangements that would, among other things, allow a better balance between professional and family life.

Footnotes

1 Chris Van Olmen is the founding partner of Van Olmen & Wynant.

2 Act of 6 June 2010 introducing the Penal Social Code.

3 www.socialsecurity.be.

4 www.limosa.be.

5 For example, Form 281.10.

6 For example, Form 325.10 for employees.

7 Decree of 19 July 1973.

8 Decree of 30 June 1982.

9 Laws on the use of languages coordinated by Royal Decree of 18 July 1966.

10 Id.

11 Act of 28 January 2003.

12 Act of 8 December 1992 concerning the protection of privacy in the filing and manipulation of personal data.