Last week, a bill containing several provisions on employment in times of crisis was approved by the Council of Ministers. The bill will be shortly published in the Belgian State Gazette.[1]

The employment-related measures form part of a larger array of initiatives and are intended to prevent structural dismissals, insofar as possible.

The following measures will apply from 1 July 2009 until 31 December 2009 (with the possibility of extension until 30 June 2010, depending on the state of the economy and possible harmonisation of the status of blue-collar and white-collar employees):

  • temporary collective reduction in working time;
  • temporary crisis measures with a view to adapting the volume of work:
    • temporary reduction in individual working time;
    • temporary collective suspension of employment contracts.

These measures can be summarised as follows.

Temporary collective reduction in working time

A collective reduction in working time of 1/5 or 1/4 can be applied to all or specific categories of employees within a company.

A company-level collective bargaining agreement suffices to enact this reduction.

Under certain circumstances, employees will receive monthly compensation for their reduced hours of at least:

  • EUR 150 gross for a reduction of 1/5; or
  • EUR 187.50 gross for a reduction of 1/4.

In both cases, the monthly allowance is paid by the employer. These amounts are increased by EUR 100 if a four-day work week is implemented.

In return, the employer will benefit from the following reduction in its quarterly social security contributions:

  • EUR 600 per employee for a reduction of 1/5; or
  • EUR 750 per employee for a reduction of 1/4.

These amounts are increased by EUR 400 if a four-day work week is implemented. At least 3/4 of these amounts should be used to make up for lost wages, as detailed above.

Please note that the employee’s reduced remuneration plus the allowance paid by the employer cannot exceed 100% of the employee’s last full-time wage.

Temporary crisis measures with a view to adapting the volume of work

The following measures are only available for companies facing financial difficulties.[2]

Temporary reduction in individual working time

A temporary reduction in individual working time of 1/5 or 1/2 can be applied to one or more employees within the company with the express consent of the individual employees concerned.

In this regard, an industry-level collective bargaining agreement should be concluded within one week after the entry into force of the new act (or, in the absence thereof, a collective bargaining agreement at company level should be concluded, in which case a special procedure must be followed).

Further, the reduction in working time must be effective for at least one month and no more than six months, subject to extension under certain circumstances.

Within certain limits, the employees concerned will receive monthly compensation for their reduced hours in the amount of:

  • EUR 188 or EUR 248 gross (if the employee is above 50 years of age) for a reduction of 1/5; or
  • EUR 442 gross for a reduction of 1/2.

In both cases, the monthly compensation is paid by the National Employment Office.

The employer can opt to pay additional compensation. However, the employee’s reduced remuneration plus the allowance paid by the National Employment Office and any optional amounts contributed by the employer cannot exceed 100% of the employee’s last full-time wage.

Temporary collective suspension of employment contracts

The employment contracts of a number of white-collar employees can be suspended in whole or in part without the individual consent of the employees concerned.

Suspension is only possible if the employee has used up all of his or her make-up days.

A collective bargaining agreement at industry level should be concluded within one week after the entry into force of the new act (or, in the absence thereof, a collective bargaining agreement at company level should be concluded, in which case a special procedure must be followed).

The employer can opt for either total suspension (i.e., all working days) of the employment contract or partial suspension (i.e., a reduction in working time with at least a two-day work week).

The employment contracts must be suspended for at least one week and may be suspended for up to 16 weeks (total suspension) or 26 weeks (partial suspension) per year.

Provided certain conditions are met, the employees shall receive for each day of suspension a daily allowance of 70% (for married or cohabiting employees) or 75% (for single employees) of a maximum gross wage (EUR 2,206 per month), i.e., a maximum of EUR 59.40 per day or EUR 1,544.40 per month (70%) or EUR 63.65 per day or EUR 1,654.90 per month (75%), paid by the union or Capac (the unemployment benefits fund).

In addition, the employer should pay additional compensation per employee equal to its contribution to a blue-collar employee on unemployment benefits in the event of suspension of the employee’s employment contract for economic reasons.