Grounds for Termination

From 1 April 2014, all employees with more than six months of seniority have the right to be informed of the reason for their dismissal. If the employer fails to inform the employee of the reason for dismissal, the employee 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 of salary. The employee is entitled to dispute the reason for dismissal before the labour court.

Employees engaged under an open-ended employment contract may claim damages, ranging between 3 and 17 weeks of salary, in the labour court if their dismissal is ‘unjustified’. An ‘unjustified dismissal’ would be considered as a dismissal (i) for reasons unrelated to the employee’s capability or conduct, or to the operational requirements of the undertaking, and (2) which would never have been decided upon by a normal and reasonable employer. This is also called a ‘manifestly unreasonable’ dismissal.

If a party has committed a serious fault, the employment contract can be terminated for serious cause without the serving of a notice period or the payment of an indemnity. Examples of a serious fault are theft, violence, …

Some employees enjoy special protection against dismissal, meaning that they may not be dismissed on some grounds (e.g. pregnant women may not be dismissed because of their pregnancy) or cannot be dismissed unless for specific reasons provided by law (e.g. employee representatives in the Works Council and Committee for Prevention and Protection at Work (CPPW). Also, 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.

Collective Dismissals

Where multiple redundancies qualify as a collective dismissal, the legislation on collective dismissals applies, and possibly the legislation regarding the closure of undertakings. There is a collective dismissal where, during a continued period of 60 days, a minimum number of employees are terminated for reasons, which do not relate to the person of the employees. This minimum number is:

• 10 in undertakings (or a division thereof) employing more than 20 but less than 100 employees;
• 10% of the total number of employees in undertakings employing at least 100 but less than 300 employees;
• 30 in undertakings employing at least 300 employees.

There is a closure of an undertaking if:

• there is a definite stoppage of the principal activity of the undertaking (or a division thereof); and
• the number of employees is reduced beneath one fourth of the average number of employees who were employed in the undertaking during the four quarters preceding the definite stoppage of the activity.

A collective dismissal or a closure triggers the prior information and consultation obligations towards the employees (either through the Works Council or, if there is none, the Trade Union Delegation, or, failing this, the employees in person). The intention to proceed with a collective dismissal or closure must also be communicated to the competent administration (the director of the sub-regional unemployment office).

In principle, a collective dismissal gives rise to the payment of a special monthly compensation during a period of 4 months, in addition to any indemnity in lieu of notice. Only employees entitled to a notice period of less than 7 months are entitled to this compensation for collective dismissal. For the purpose of the payment of a special monthly compensation, a slightly different definition of collective dismissal has been adopted. Collective dismissal in this context means any dismissal for economic or technical reasons affecting, over an uninterrupted period of 60 days, at least 6 employees if the undertaking employs at least 20 and less than 60 employees, and 10% of the average number of employees employed during the previous calendar year if the undertaking employs at least 60 employees.

In case of a closure of an undertaking and if the conditions are met, the employees will be entitled to a closure indemnity equal to a fixed amount per year of seniority within the undertaking and per year exceeding the age of 45, with a maximum total of 6.492,7 € (figure in 2020). In the majority of cases, employers and trade union organisations establish a social plan granting additional compensation to the employees’ concerned and other measures with a view towards reducing the consequences of the collective dismissal (e.g. early retirement schemes). If the employer employs more than 20 employees, a re-employment unit (‘cellule pour l’emploi’ / ‘tewerkstellingscel’) aimed at the activation of the dismissed employees has to be installed in case of a collective dismissal (in this context, yet another definition of collective dismissal is applied). An employer employing 20 employees or less is only obliged to install such re-employment unit if he wishes to dismiss employees within the framework of an early retirement (system of unemployment benefits with employer top-up) at an age lower than the age that is normally applicable for early retirement within the company. The re-employment unit has to make an outplacement offer to the employees who are dismissed and who participate in the re-employment unit.

Lastly, it is important to note that sectors can have additional procedures (laid down in CBA’s) that could provide for certain information and consultation rules, etc., which, even in the case of multiple dismissals, do not fall under the European and national collective dismissal rules.

Individual Dismissals

Termination of an open-ended employment contract through serving a period of notice or payment of an indemnity

Employment contracts are generally terminated through serving a notice period or the payment of an indemnity in lieu of notice. A combination of both, where the serving of a notice period is followed by the payment of an indemnity for the remainder of the notice period is also possible. An employer does not require any authorisation to dismiss an employee (except for the dismissal of an employee representative or a prevention advisor, see below).  As part of the recent Belgian labour law reform, notice periods for blue- and white-collar employees are now aligned for employment contracts taking effect from 1 January 2014. These notice periods are fixed by law and only depend on the employee’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 employee’s seniority acquired before 1 January 2014 and will be calculated according to transitory rules; the second part is based on the employee’s seniority as of 1 January 2014 and is calculated on the basis of the new regime. A legislative modification took place in 2018 and changed (mostly reduced) the notice period for the termination of the employment contract in the first 6 months, applying to all terminations occurring after 1 May 2018.

The table below summarises the rules with regard to the notice periods to be respected for open-ended contracts that took effect on or after 1 January 2014 (only step 2), on the one hand, and contracts that took effect before 1 January 2014 (step 1 + step 2 = step 3), on the other hand.

The Unified Employment Status Act also provides for transitory measures for blue-collar employees of certain labour-intensive and competitive industries (e.g. construction, clothing, diamonds industry, etc. …) and temporary and mobile workplaces. To be valid, notice must be given in writing and specify the starting date and the length of the notice period. If the contract is terminated by the employer, notice must be served by registered mail or by bailiff. Moreover, notice must be given in the correct language. If the employment contract is terminated with the payment of an indemnity in lieu of notice, no specific formalities need to be complied with.

Termination for serious cause

Either of the parties may terminate the employment contract for serious cause, irrespective of whether this employment contract had been entered into for a fixed term or for an indefinite term. ‘Serious cause’ is defined as a fault so serious that it renders any continuation of the working relationship immediately and definitively impossible. Where an employment contract is terminated for serious cause, no notice period needs to be observed nor does any compensation in lieu of notice have to be paid. In case of a termination for serious cause, the employer needs to strictly observe the following formalities: he must dismiss the employee within three working days as of the day he became sufficiently aware of the serious facts and he must inform the employee, by registered mail, of the grounds of his/her dismissal at the same time or within another 3-working-day-period.

Protected Persons Status

Some employees enjoy special protection against dismissal based on a specific circumstance, which they find themselves in. Therefore, it is explicitly forbidden for employers to dismiss someone because of this specific circumstance (e.g. pregnant employee, employees who have filed a complaint for harassment, employees on maternity leave, …) during the protection period. In case of violation, special protection indemnities (equal to 3 or 6 months of salary) will be due in addition to the notice period or indemnity in lieu of notice.

Employee representatives in the Works Council and the CPPW and also non-elected candidates may only be dismissed for serious cause with the prior approval of a labour court, or for economic or technical reasons that have been recognised beforehand by the competent joint committee. In each of the aforementioned cases, the law prescribes a specific and complex procedure. Violation of these rules of protection will oblige the employer to pay compensation to the dismissed employee, in a fixed and variable amount depending on the employee’s seniority within the company (from 2 up to 8 years of wages).

Also, for the dismissal of a member of the Trade Union Delegation or the dismissal of the prevention advisor, a specific procedure needs to be complied with. In case of violation, additional compensation will be due on top of the indemnity in lieu of notice (1 year of salary for the trade union delegate and 2 or 3 years of salary for the prevention advisor). Moreover, CBA’s entered into on industry level may include specific procedures to be complied with in case of dismissal and additional compensation in case of violation (e.g. banking sector).

Is Severance Pay Required?

Severance payment (indemnity in lieu of notice): an employer can choose to either terminate an employment contract with the granting of a notice period or to terminate the employment contract immediately with the payment of an indemnity in lieu of notice. A combination of both, where the serving of a notice period is followed by the payment of an indemnity for the remainder of the notice period is also possible. The indemnity in lieu of notice is calculated on the basis of the annual salary of the employee at the time of termination, including statutory and contractual fringe benefits. If the employment contract is terminated with the payment of an indemnity in lieu of notice, no formalities need to be complied with; this is contrary to a termination through serving a notice period.

Separation Agreements

Is a Separation Agreement required or considered best practice?

It is common practice (especially for higher-up employees) that the parties to an employment contract would conclude a separation agreement stipulating, i.e. the amount of the indemnity in lieu and that the employee waives any other claim he may have.

What are the standard provisions of a Separation Agreement?

It is customary to include: the indemnities that will be paid by the employer to the employee, upon signing the agreement; a confidentiality clause; a clause in which the employee waives the right to make any claim he may have; and a non-compete clause, among others.

Does the age of the employee make a difference?

No.

Are there additional provisions to consider?

No.

Remedies for Employee Seeking to Challenge Wrongful Termination

The employee can dispute:

• the length of the notice period served (although these kinds of claims have become exceptional as the new Unified Employment Status Act includes fixed notice periods now, contrary to what was the case before).
• the salary package used as a calculation base for the indemnity in lieu of notice.
• the fact that no (timely) motivation of the dismissal was given by the employer, although the employee asked for the reasons for his/her dismissal (indemnity of 2 weeks of salary).
• the reason for dismissal. If the dismissal is deemed unjustified, meaning that it was “manifestly unreasonable”, the employer owes damages for an amount ranging from 3 to 17 weeks of remuneration.
• the dismissal for serious cause. The employee can invoke that the 3 day-term to dismiss or to inform the employee on the grounds of the dismissal has been violated, or that the grounds for dismissal do not constitute a serious cause. If the claim is successful, the employee will be entitled to an indemnity in lieu of notice equal to the salary for the notice period that should have been served.
• the fact that the employer terminated the employment contract of an employee who enjoys special protection against dismissal, in violation of any rule with regard to the employee’s protected person’s status. If the court rules in favor of the employee, a special protection indemnity ranging from 3 or 6 months (in general) up to even 8 years of salary (maximum amount in case of a dismissal of a member of the Works Council or CPPW) will be due by the employer.
• that his/her dismissal was discriminatory. In that case, the employer risks to be sentenced to a supplementary indemnity of 6 months of salary.

The employee should bring any claim before the labour court within a maximum of one year as of the termination of his/her employment contract. If not, the claim will be deemed barred by the statute of limitation.

Void dismissal

Termination with a notice period: As indicated, any notice must be given in writing and in the correct language, stating when the notice period starts and its duration. Moreover, the employer must serve notice by means of a registered letter or via a bailiff. Failing this, the notice may be deemed null and void. In that case, the employment contract will have been terminated without serving notice so that the employer will be obliged to pay an indemnity in lieu of notice.

Termination for serious cause: In case of a termination for serious cause, the employment agreement should be terminated within three working days after the party who terminates the contract acquired enough knowledge with respect to the serious cause. The notification of the grounds for dismissal should also be presented to the other party no later than 3 working days after the termination and by registered letter or via a bailiff. If these strict deadlines and formalities are not complied with, the dismissal for serious cause will be null and void, and an indemnity in lieu of notice will be due to the employee.

Whistleblower Laws

The former Belgian Commission for the Protection of Privacy (‘Privacy Commission’) (now replaced by the Supervisory Authority) describes ‘whistleblowing’ as follows: ‘whistleblowing systems are mechanisms that enable individuals to report conduct of a member of their organisation, which in their opinion is contrary to a law or a regulation or to the basic rules established by their organisation’. The implementation of such a system implies to take into account the legitimate interests of all the parties involved (the organisation, its staff, the whistleblower, the person(s) incriminated, third parties, etc.).

There is no specific Belgian legislation governing whistleblowing. However, the relevant case law is a good indicator of the admitted practices. Although the number of cases is very limited in Belgium, there is a clear willingness to insert whistleblowing mechanisms in companies, in order to reach an appropriate balance between, on the one hand, the risk of late alerts and their influence on the working atmosphere and, on other hand, the need for transparency within companies.

In addition, since it can involve the processing of personal data, whistleblowing is subject to the provisions of the GDPR and the Act of 30 July 2018 on the protection of privacy in relation to the processing of personal data. In this regard, the former Privacy Commission adopted a recommendation related to the compatibility of the whistleblowing systems with the data protection legislation (Recommendation n° 1/2006 of 29 November 2006). This recommendation includes the implementation of a whistleblowing policy, in order to install an adequate mentoring programme to prevent unjustified charges, process justified reports, describe the consequences of justified and unjustified alerts, and avoid a ‘whistleblowing culture’. A report must be collected and processed by a person specifically appointed within the organisation (this person must be bound to professional confidentiality, protected from pressure, work with autonomy and discretion, etc.). Also, protection must be provided for the whistleblower (against dismissal, discrimination, and harassment) and for the person against whom allegations have been made. The latter must be informed immediately and has the right to access, rectify, or delete the personal data concerning him/her.

Further, the EU approved the Whistleblowing Protection Directive 2019/1937 on 23 October 2019. The Directive is applicable to companies with 50 or more employees and provides protection to a wide scope of persons working in the private or public sector, who have acquired information on breaches in a work-related context, irrespective of whether they are, factually, employees, self-employed, freelance or civil servants. The Directive demands the introduction of an internal reporting procedure to deal with whistleblowing in order to prevent direct leaks to the public or press. In this way, companies would be obliged to confirm the receipt of a complaint within seven days and will have to give feedback to the reporter within three months. Also, external reporting processes to the authorities have to be made clear and easily accessible (by the Member States).

Finally, reporting publicly (to, e.g., the media or online) is addressed as a possibility when the reporters have reasonable grounds to believe that there is an imminent or manifest danger to the public interest or a risk of irreversible damage. Interestingly enough, the Directive offers a protection for whistleblowers against any form of retaliation, including dismissal, negative evaluation, suspension, demotion, discrimination, etc. The main deadline for the implementation of the Directive is 17 December 2021. However, for companies of 50 to 249 employees, the implementation deadline is two years later. At the moment of publication, Belgium has not yet implemented the Directive.