Belgium: Risk on increase of dismissal costs after 1 January 2019
According to art. 39ter of the Employment Contracts Act, by 1 January 2019 at the latest, a collective labour agreement must provide for each sector that an employee whose employment contract is terminated by the employer by means of a notice period of at least 30 weeks (or an equal severance pay) is entitled to a dismissal package consisting of a period of notice to be served (or a severance pay) corresponding to 2/3 of the dismissal package and, for the remaining 1/3, measures to increase the employability of the worker on the labour market (outplacement). Under no circumstances may the arrangement result in the notice period, or compensation becoming less than 26 weeks.
In short, for employees with a high seniority that get a notice period of 30 weeks or more, more or less 1/3 of their dismissal package would exist out of outplacement measures.
When, after 1 January 2019, there are no such sectorial for the entitled employees, a special contribution for the employee of 1% of the salary paid during the part of the notice period that represents one third of the dismissal package and 3% for the employer shall be due.
None of the sectors have concluded a relevant collective bargaining agreement and with the rapidly nearing deadline, the National Labour Council was asked to find a solution. However, although an effort is being made from all sides to find a solution. It is not certain if an intersectoral solution will be found and if this solution will come on time to prevent employees and employers to be sanctioned with the additional contributions.
It is possible that some sectors and employers are merely hoping that the sanction will not be applied, as there are also questions to be posed on its conformity with the Constitution. However, the only certainty is that no one wants a increase of dismissal costs.