In the framework of two “omnibus” laws adopted at the end of March 2012, new legislation in the field of employment law has been adopted. Important developments are the obligation for companies to respect their age pyramid in case of a collective redundancy, and the increase of the employer’s social security contributions in the former early retirement scheme and similar schemes .
Age pyramid in case of collective redundancy
In case of a collective redundancy, the age pyramid of the dismissed employees must correspond to the age pyramid of all the employees within the company. To that end, the companies must spread the redundancies proportionally over three age groups: those younger than 30, those between 30 and 50 and those over 50.
Per age group, a deviation of 10 % from the proportional spread of the redundancies is allowed. The proportionality principle only applies to the company divisions that are affected by the collective redundancy. Key employees are excluded from the calculation, although this category is not defined.
Companies that do not comply with the age pyramid requirement, lose for the quarter during which the collective redundancy was announced and for the seven previous quarters and for the employees aged over 50 that are made redundant, the social security reductions that they had enjoyed previously. These companies thus will need to pay additional social security contributions.
The new system has not yet taken effect. The National Labour Council has been given the possibility to develop an alternative system before 30 June 2012. Practical rules to apply the system also still need to be adopted.
Increase of the employer’s social security contributions in the former early retirement scheme and similar schemes
The employer’s social security contributions in the former early retirement scheme (now called “unemployment with a company allowance”) will increase substantially. The same is true for the employer’s social security contributions on payments made on top of unemployment benefits (the so-called “Canada dry”-system) and on top of time credit alllowances of employees aged over 50.
The increase will apply to all allowances and not only to new ones. The sharpest rise will occur in cases where the employee was dismissed after 28 November 2011 with payment of allowances as of 1 April 2012.
