Belgium has fairly extensive protective labour laws. Moreover, collective bargaining between the so-called `social partners', i.e. the employer and the trade unions, plays a very important role in shaping labour law rules. As a rule, the termination of an employment contract is not subject to any prior administrative or court approval in Belgium. Since 2014, the rules on the calculation of notice periods have changed significantly. Moreover, employees now have the right in principle to ask for the concrete reasons which led to their dismissal. The Belgian federal government is making efforts to lower the costs of employing people in the framework of the "tax shift" from labour to other forms of income. The federal government is also enacting legislation to simplify and modernise labour legislation in relation to working hours. In addition, the legal retirement age for workers retiring from 1 February 2030 has been raised from 65 to 67.

Issues arising on hiring individuals

Foreign nationals

European treaties provide for the free movement of persons within the European Economic Area (EEA) and Switzerland. This means that employees who are citizens of one EEA Member State or Switzerland are, in principle, free to work in another Member State without a work permit.

A foreign worker, non-EEA national or Swiss national who wants to work in Belgium under an employment contract must have a work permit. There are three types of work permits (A, B and C), but in most cases, foreign nationals are eligible for a work permit B only (valid for one specific position with one specific employer and for a maximum of 12 months, but renewable).

For the "B" work permit, an employer that wishes to employ the foreign worker must also obtain prior authorisation from the competent regional Minister. Both documents must be obtained before starting work in Belgium. In practice, both applications are filed at the same time by the employer or his agent.

Some categories of workers are exempt from these requirements and others benefit from relaxed rules. Depending on the foreign national's country of origin, they may need a visa to enter Belgium. On arrival, the foreign worker must also apply for a Belgian residence permit (foreign identity card A).

Employment structuring and documentation

In principle, an employment contract may be written or verbal. However, the following employment contracts and/or clauses (without limitation) must be in writing: (1) training clause; (2) non-competition clause; (3) employment contracts concluded for a fixed term or for a specific project; (4) replacement contracts; (5) employment contracts for students; (6) part-time contracts; (7) temporary work or interim work; (8) working from home; (9) arbitration clauses for highly paid employees with high management responsibilities; and (10) in certain cases, employment contracts concluded with a foreign worker.

For some of these exceptions, the contract must be signed before workers actually start their job. A number of specific employment contracts such as replacement contracts, student contracts or contracts for homeworkers also need to include a number of predetermined elements. Sanctions for failure to comply with the written contract requirement include: the nullification of the clause or contract; allowing the employee to terminate the contract without notice;

and the creation of a legal presumption that the contract was concluded for an indefinite term (an open-ended employment contract).

In principle, the parties are free to agree the terms of their employment contract; however both parties are subject to mandatory legal and regulatory conditions, and in some cases, collective bargaining agreement requirements which tend to make up an integral body of the employment contract. Neither party can contract out of these requirements and conditions.

A unique characteristic of the Belgian system is that employment contracts and all other employment related documents between the employer and the employee must be worded in French, Dutch or German, depending on the location of the employer's operating unit. If the operating unit where the employee works is in the Flemish region; the employment contract must be drafted in Dutch, if it is in the Walloon region, it must be drafted in French, and if it is in the German-speaking region, the contract must be in German. For the Brussels region, the employment contract must either be in French or Dutch, depending on which language is used by the employee.

However, in the context of a cross-border employment contract, the European Court of Justice rendered a landmark decision in April 2013 stipulating that the principle of freedom of movement of employees allows the parties to draft the contract in a language other than the official language of the state where the workplace is located. Consequently, the Flemish Decree on the use of languages in social relations has, to a certain extent, been amended accordingly.

The standard type of employment contract used in Belgium is the full-time indefinite term contract. With the exception of the mandatory requirements referred to above, a written contract is not required.

Fixed term contracts are permitted, but a written contract must be produced by the commencement of employment at the latest. Failing this, contracts for a fixed term are deemed to be open-ended contracts. There is a limit to the number of times that parties can enter into consecutive fixed-term contracts.

Trial periods no longer exist; except in relation to student contracts and interim and temporary employment contracts where the first three days of effective employment are the trial period during which both parties can end the contract without notice or payment in lieu.

Issues arising during the employment relationship

The minimum wage, annual leave and working time are fixed, according to the industry sector, by collective bargaining agreements. However, the minimum wage may not be lower than the guaranteed average minimum monthly pay, fixed by national collective bargaining agreement CBA, which currently amounts to EUR 1,590.64 gross (for employees aged at least 20 and with at least one year's service). In many sectors of industry, the sectorial minimum wage is a lot higher than the guaranteed average minimum monthly pay that must be respected when, on industry level, no CBAs are entered into.

In addition to their monthly gross salary, workers are entitled to single (i.e. normal salary) and double holiday pay and in most sectors, the payment of an end of year bonus is mandatory.

In principle, the maximum average working time is 38 hours per week and eight hours per day. Yet the maximum working week may be lower in some industry sectors, depending on the relevant CBA. There are several statutory exceptions to this rule. For instance, in the case of shift work, it is possible to work up to 11 hours per day and in the case of continuous work, even up to 12 hours.

Under certain conditions, flexible working time schedules with a weekly working time exceeding 38 hours may be introduced provided the quarterly or yearly average remains at 38 hours per week.

Daily minimum working time is three hours but statutory exceptions exist.

Overtime is in principle prohibited, although there are several exceptions to this rule. Where overtime is authorised, overtime pay is at least 1.5 times the worker's regular rate of pay and twice his/her regular rate if the overtime is performed on a Sunday or a Public Holiday.

Workers also benefit from paid compensatory rest periods.

Rules relating to working hours and overtime do not apply to sales representatives, homeworkers, domestic servants and employees in a managerial role or a position of trust within the company. Working at night, on Sundays and during Public Holidays is only allowed in a few strictly regulated cases.

Workers are entitled to remuneration for ten official Public Holidays. If a Public Holiday falls on a Sunday or on a day on which the worker does not work, the employer must grant a day in lieu.

The number of days' annual leave entitlement is determined according to the number of days worked (and deemed to have been worked, e.g. where the worker was on maternity leave or sick leave) during the preceding calendar year, referred to as the `holiday reference year'. Generally, for a full holiday reference year, workers have the right to 20 or 24 days' annual leave, depending on whether their working regime includes a five or six day working week.

Workers who are starting their careers or who are restarting work after a long time off are entitled to additional holiday after an introductory period of three months, so that they have the opportunity to benefit from four weeks' leave over a period of one year. The worker will receive holiday pay that is equal to their regular salary and this will be financed through a deduction from the double holiday pay for the following year.

Trade unions

By application of the constitutional freedom of association, there are no restrictions on the creation of a trade union. However, only a select few unions are granted a specific role and specific rights by law.

Traditionally, unions choose not to organise themselves under a form that would give them a separate and complete legal personality As a result, they only exist as legal entities to perform specific acts that are assigned to them by law. Unions, but not their members, essentially enjoy immunity from responsibility.

Representative unions have a place on the National Labour Council and the Joint Committees (committees at industry level where collective bargaining agreements are negotiated). In addition, they have the power to: (1) conclude collective bargaining agreements with one or more employers or representative employers' organisations; (2) put forward candidates for elections to the Works Council and the Committee for Prevention and Protection at Work; (3) ensure that the correct procedure is observed for the election of representatives; (4) depending on the circumstances, form a Union Delegation within the company; (5) propose lay judges to sit on the Labour tribunals and Labour Courts of Appeal; (6) represent their members before Labour Courts; and (7) in some circumstances, engage in legal action on their own behalf to defend the interests of their members.

Workers have the right to choose whether or not to join a trade union.

Social insurance

Unless otherwise stated by an international agreement, salaried workers working in Belgium for an employer established in Belgium or at an operational office in Belgium, will in principle be subject to the Belgian social security scheme for salaried persons.

It is impossible to deviate from the Belgian social security scheme by special agreement as this would be null and void by law.

In the scheme for salaried persons, both workers and employers have to pay contributions to the National Social Security Office. The employer's contributions amount to approximately 30% for white collar workers and approximately 35% for blue collar workers.

Workers' contributions are fixed at 13.07% and are deducted from their gross salary.

The social security system covers old-age and survivor's pensions, unemployment benefits, sickness and disability benefits, insurance for accidents at work and for occupational diseases, family allowances and annual leave.

Well-being

Following a number of modifications to the law on the well being of workers, psychosocial risks are now defined more broadly in the sense that a connection with acts of violence, bullying or sexual harassment does not have to be proven in order to demand action from the employer. The employer also has to take measures to diminish the possibilities of stress caused by poor work organisation, labour conditions or interpersonal relations on the work floor. In addition, the law provides for specific procedures for psychological interventions and an obligation on employers to conduct a risk assessment for work-related stress in the company.

Issues arising on termination of the employment relationship

Business transfers

Under Belgian law, the transferor and the transferee have an obligation to inform their respective employee representative bodies (i.e. the Works Council, or in the absence thereof, the Trade Union Delegation, or in the absence thereof the Committee for Prevention and Protection at Work) about a proposed transfer (which includes a merger, concentration, take-over, closure or other important structural change negotiated by the company). The workers must be informed individually about the proposed transfer where: (i) there is only a Committee for Prevention and Protection at Work; or (ii) there are no employee representative bodies within the company.

The transferor and the transferee must also consult the employee representative bodies in particular about the impact of the transfer on employment prospects for the workforce, the work organisation and employment policies in general.

The information and consultation process should take place before a decision on the planned transfer is made. Failure to comply with this obligation would render the employer liable to criminal sanctions (a fine of EUR 4004,000, multiplied by the number of workers employed in the company, up to a maximum of EUR 400,000) or to administrative sanctions (a fine of EUR 200-2,000, multiplied by the number of workers employed in the company, up to a maximum of EUR 200,000) in accordance with Article 196 of the Penal Social Code.

When there is a transfer, all workers working in the transferred business division are automatically transferred to the transferee. In principle, the workers may not oppose the transfer unless it would entail serious modifications to an essential element of their employment contract (e.g. salary, place of work, duties).

The rights and obligations of the transferor arising from the employment contracts and existing on the date of transfer are automatically transferred to the transferee. It is prohibited for both the transferor and the transferee to dismiss workers on the grounds of the transfer, apart from dismissals for just cause (serious misconduct) and dismissals based on technical, economic or organisational reasons.

The transferor and transferee are jointly and severally liable for transferred workers and the National Social Security Office is in place for the debts existing at the date of the transfer.

Terminating employment

All workers with more than six months' service now have the right to be informed of the reason for their dismissal. Previously, and except in certain circumstances, only blue collar workers and workers dismissed for serious cause enjoyed this right. If the employer fails to inform the worker of the reason for dismissal, the worker can require the employer to give an explanation. If no (timely) explanation is provided, the employer owes a lump-sum civil fine of two weeks' salary. The worker is entitled to dispute the reason for dismissal before the Labour Court.

Except on grounds of serious cause, open-ended employment contracts may only be terminated by one of the parties by serving notice or by payment of an indemnity in lieu of notice (equal to the salary, inclusive of benefits, at the time of termination corresponding to the duration of the notice period). The notice must be given in writing and in the correct language, stating when the notice period starts and its duration. If the employment contract is terminated with the payment of an indemnity in lieu of notice, no formalities need to be complied with.

As part of the recent Belgian labour law reform, notice periods for blue- and white-collar workers are now aligned for contracts taking effect from 1 January 2014. These notice periods are fixed by law and only depend on the worker's seniority. They are expressed in weeks.

For open-ended contracts that took effect before 1 January 2014, the notice period to be observed in case of dismissal comprises two parts which must be added up. The first part is based on the worker's length of service acquired before 1 January 2014 and is calculated according to transitory rules; the second part is based on the worker's length of service as of 1 January 2014 and is calculated on the basis of the new regime.

The new legislation also provides for transitory measures for blue collar workers of certain labour-intensive and competitive industries (e.g. construction, clothing, diamonds industry, etc.). All of these derogations (i.e. shorter notice periods) are temporary in nature. Therefore, from 1 January 2018, the same notice periods will apply to all sectors.

Workers engaged under an open-ended employment contract may now claim damages (ranging between 3 and 17 weeks' salary) in the Labour Court if their dismissal is "unjustified". An "unjustified dismissal" is where the dismissal: (1) is for reasons unrelated to the worker's capability or conduct, or to the operational requirements of the undertaking; and (2) would never have been decided upon by a normal and reasonable employer.

Some workers enjoy special protection against dismissal, so they may not be dismissed on certain grounds (e.g. pregnant women may not be dismissed because of their pregnancy) or cannot be dismissed except for specific reasons provided by law (e.g. employee representatives in the Works Council and Committee for Prevention and Protection at Work and non-elected candidates may only be dismissed for serious cause with prior approval of the Labour Court, or for economic or technical reasons that have been recognised by the competent Joint Committee). 

Published in collaboration with L&E Global an alliance of employers’ counsel worldwide

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