1. Which rules must be taken into account to determine the applicable notice period or corresponding indemnity in lieu of notice?
The legislator has introduced new rules to determine the notice period for employees whose annual gross salary exceeds EUR 31,467 in 2012 (See, VBB on Belgian Business Law, Volume 2011, No. 4, available at www.vbb.com). These new rules apply to employment contracts of which the performance commences on 1 January 2012 or later.
For white-collar employees with an annual gross salary of up to EUR 31,467 in 2012 nothing has changed. They must still be granted a notice period of three months per commenced period of five years’ seniority upon termination of their employment contract. In contrast, the notice period for white-collar employees whose annual gross salary exceeds EUR 31,467 in 2012 will amount to 30 days per year of commenced seniority, with a minimum of 91 days. So only the seniority will be taken into account to determine the notice period.
For employment contracts of which the performance commenced before 1 January 2012 (or the first employment contract in the case of consecutive employment contracts without an interruption of more than seven days) the notice period must be determined under the old rules (agreement between the parties or court decision). As a result, the so-called “Claeys formula” (based on age, seniority and gross annual remuneration) can be used to determine a reasonable notice period.
However, as the “Claeys formula” is only a guideline (not embedded in law), the courts are not obliged to apply this formula to determine the reasonable notice period. Therefore, since 2012 it has often been argued before the labour courts that, by means of the new rules, the legislator has determined what a reasonable notice period should be and that the new rules should also be considered as a guideline for determining the reasonable notice periods for the termination of employment contracts of which the performance commenced before 1 January 2012 as well.
The Labour Court of Kortrijk, section Roeselare, decided in a judgment of 14 March 2012 to grant a notice period in line with the new rules even though the performance of the terminated employment contract had commenced before 1 January 2012. This judgment is likely the first of many judgments to hold that the new rules can be used as a guideline for determining a reasonable notice period for employment contracts of which the performance commenced before 1 January 2012. It is therefore advisable for the employer, for employment contracts of which the performance commenced before 1 January 2012, to calculate the reasonable notice period based on the old and new rules and apply the most beneficial rules for the employer. Of course, the employee can always challenge this decision before the labour court and request the application of the rules that are most beneficial rules to him/her.
2. The new legislation provides that the seniority of temporary workers for the same employer must be taken into account in determining the seniority for the purpose of calculating the notice period.
As from 1 January 2012, the seniority of temporary workers for the same employer will be taken into account for the purpose of calculating the notice period if the following conditions are met:
- termination by the employer;
- the new legislation applies;
- the employee was hired by the employer immediately after the temporary work (without an interruption of more than seven days);
- in the same function which he/she performed as a temporary worker.
The maximum period of seniority that will be taken into account is one year.
3. Settlement agreement: RSZ/ONSS implications
As soon as an employee is entitled to remuneration (e.g. salary, benefits, indemnity in lieu of notice, etc.) social security contributions will in principle be due on these amounts. Whether or not the employee actually received payment of such remuneration is irrelevant in the eyes of the Social Security Administration for employees (RSZ/ONSS).
Consequently, the fact that the employee may have waived remuneration to which he/she was entitled will not prevent the RSZ/ONSS from claiming social security contributions on the remuneration, as the waiver will not bind the RSZ/ONSS. A concrete example will illustrate this: an employee is dismissed and signs a settlement agreement pursuant to which the employer will pay specific amounts (e.g. indemnity in lieu of notice, end-of-employment holiday pay etc.) but with the provision that, if the employee is offered and accepts a new job at the employer’s company within a certain period of time, the employee will waive these amounts. Even if the employee then accepts a new job with the employer and waives the amounts under the settlement agreement, the RSZ/ONSS can claim employer’s and employee’s social security contributions on these amounts.
The same goes for a settlement agreement concluded between the parties after the judgment of a labour court and in which the parties agree on, for example, a lower indemnity in lieu of notice than that granted by the court. The RSZ/ONSS can still claim the social security contributions on the amount which was determined by the court rather than the lower amount which was agreed upon between the parties. This is again based on the fact that a waiver of rights in the settlement agreement does not bind the RSZ/ONSS. This was confirmed by the Labour Court of Ghent (11 May 2009, A.R. 144/07 – 145/07).
