Belgium

Working as a Student after Completion of Studies?

An employee is considered a student when he/she is no longer subject to an obligation of full-time compulsory attendance at school but continues to follow a full-time education or part-time education (under certain conditions).

The question arose whether a student who graduated in June who made clear he/she did not want to pursue his/her studies, e.g., by registering as a jobseeker, could still be employed under an agreement for student employment, with a solidarity contribution, until 30 September of the year in which he/she graduated.

The NSSO concluded that, under this scenario, employment cannot, under any circumstances, be used as a disguised probation period under an ordinary employment agreement

Nothing changes for graduates pursuing further study: they continue to be considered as students.

For more information on student employment, we refer to our Newsletter of 23 January 2012.

Action points

  • There is no need to worry about plans to engage a recently graduated student under a student employment agreement during the summer.
  • Remain cautious if the objective is to engage the student under an ordinary employment agreement as of October.

The Unemployment with Company Allowance Regime: The Most Recent Adjustments

One of the action points of the Di Rupo I government was to tighten access to the unemployment with company allowance regime. At the end of December 2011, the age and career conditions specified in the Royal Decree of 3 May 2007 were adjusted (cfr. our newsletter of 13 January 2012).

As a consequence, the regime of unemployment with company allowance as of 58 years for employees with professions involving heavy work was ended with effect as from 1 January 2015. This led to strong protests from the social partners, after which the competent Minister De Coninck announced he would take their comments into account. With the Royal Decree of 20 September 2012, the "old" regime has been restored. Therefore, it remains possible for employees with such professions, aged 58 years or older and a career of at least 35 years to benefit from the unemployment with company allowance regime, as was previously the case.

In addition, the Royal Decree of 20 September 2012 fixes the right of access to unemployment with company allowance as of 60 years or within the scope of a long career, enabling an employee who meets the age and career conditions to keep his/her right to unemployment with company allowance. In the event the age and career conditions have meanwhile become stricter, he/she will still be able to benefit from the unemployment with company allowance regime under the previously applicable, more favourable age and career conditions.

An employee who wishes to benefit from his/her acquired rights can ask the Director of the unemployment office to determine whether he/she meets the age and career conditions.

Action points

  • Examine the age and career conditions for unemployment with company allowance, even if there is no longer a collective bargaining agreement applicable at the end of the employment contract of the employee.
  • When dismissing employees with professions involving heavy work, keep in mind the fact that unemployment with company allowance remains possible.

Liability of Directors of Belgian Companies to the Social Security in a European Context

The fourth subparagraph of Article 3(1) of Royal Decree No 38, such as interpreted by the Constitutional Court, provides that any person designated as director of a company liable to Belgian tax, which does not manage the company from Belgium, is irrebutably presumed to pursue in Belgium a professional activity.

Questioned by the Labour Court of Brussels, the European Court of Justice decided on 27 September that, for the company director who manages a Belgian company from another Member State, the non-rebuttable nature of the presumption that they pursue their activity in Belgium is contrary to European Law.

Indeed, the Court considers that the "location of exercise" of the professional activity must receive a uniform definition and be understood as referring to "the place where, in practical terms, the person concerned carries out the actions connected with that activity".

Therefore, persons designated as directors of a Belgian company can now prove that they pursue their activity from another Member State, and be exempt from liability under the Belgian social security regime for self-employed persons because of such activity.

In addition, this decision might have an impact on the qualification of the director's activity, and even on the determination of the State of liability, since it is for the State within which the activity is in practical terms pursued to determine whether it constitutes an employed or self-employed activity.

Action point

Determine the State within which the company director's activity is in practical terms pursued, as well as the qualification given by such State's legislation to the activity of the director (employed or self-employed activity), and its eventual impact on the determination of the State of liability.

Constitutional Court Retains the Current Level of Protection Offered to Employee Representatives

The Belgian Constitutional Court considers that the protection against dismissal afforded to (candidate) employee representatives in the Works Council and/or the Committee for Prevention and Protection at Work does not violate the principle of equality.

The Labour Tribunal of Huy had asked the Constitution Court whether the restriction of grounds for dismissal (principally serious cause and economic or technical reasons) and the draconian compensation for dismissal (up to eight years of salary) did not violate the principle of equality compared to those of other protected workers such as union representatives or prevention advisors.

In its judgement of 10 October 2012, the Constitutional Court ruled that the specific protection regime laid down in the Act of 19 March 1991 is justifiable.

The Constitutional Court ruled that this regime rests upon a legitimate distinction with respect to a union representative, since the regime for union representatives is not set down by law but by a collective bargaining agreement closed at national level no. 5 and since union representatives are appointed in a fundamentally different way than are (candidate) employee representatives.

With regard to a prevention advisor, the Constitutional Court ruled that, unlike an employee representative, such individual is not elected by all the employees and does not represent the entire staff taking into account his/her independence.

Action point

Ensure that no decision to dismiss a protected employee can be considered without full regard being systematically paid to the requisite legal/sectorial protection enjoyed by such individual.

Fight Against the Gender Wage Gap: Measures to Be Taken Within the Company

The Act of 22 April 2012 aimed at fighting against the gender wage gap, published in the Belgian Official Gazette on 28 August, introduces several new requirements with practical implications for companies.

In all companies that must file annual accounts, wage data contained in the annual social report will from now on have to be broken down by workers' gender.

Moreover, in all companies normally employing more than 50 workers, an analysis to determine if the company has a neutral remuneration policy with respect to gender will have to be undertaken every two years. An analysis report, including the wage data broken down by gender, should be provided to the members of the Works Council (WC) or Committee for Prevention and Protection at Work (CPPW) with the annual information. On this basis, the WC (or CPPW) will assess the need to establish an action plan.

Finally, within the same companies, the employer may appoint, on the proposal of the WC (or CPPW), a mediator charged with (i) assisting in the implementation of those new measures and in the drafting of the action plan, if any, and/or (ii) hearing those workers who claim to be victims of unequal treatment in order to find an informal solution with management. A Royal Decree will specify the powers of and skills required from the mediator, as well as its ethical rules.

Action points

  • Break down wage data by gender in the next annual social report.
  • Within companies with more than 50 workers, establish an analysis report concerning the structure of worker's remuneration every two years.

Highly-Skilled Employees Now Eligible for the European Blue Card in Belgium

By Sophie Maes of Claeys & Engels (the Belgium member of Ius Laboris)

BelgiumValiseII.jpgOn Monday, 10 September 2012, Belgium began issuing the "European Blue Cards" which allow certain highly-skilled non-EEA employees to work and reside in Belgium.

This new "unique" residence permit transposes the European Blue Card Directive into Belgian legislation and exempts certain highly-skilled, non-EEA employees from obtaining a Belgian work permit. However, during the first two years of employment, the Belgian employer will still need to obtain a provisional work permit from the competent regional government. Thereafter, the European Blue Card will be delivered if all residency conditions are fulfilled. The Card will initially be issued for an initial term of 13 months, but can be renewed.

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Non-compete Agreement Concluded After the Severance Notification But Before the Effective End of the Employment Contract: Indemnity Exempt from Social Security Contributions

It was generally admitted that a non-compete indemnity was exempt from social security contributions only if, among other things, the non-compete agreement was concluded after the effective end of the employment contract.

The Supreme Court nuances this principle in a judgment of 19 March 2012. In this case, two agreements were concluded on the same day between an employee and his employer: on the one hand, a transactional agreement on the termination of the employment contract (after the severance notice), and on the other hand, a non-compete agreement. Parties also agreed that the employment contract would effectively end only on the second day after the conclusion of those agreements. In addition, the employment contract did not contain a non-compete clause.

The Supreme Court decided that even if paid by virtue of an agreement concluded after the severance notification, but before the effective end of the employment contract, the non-compete indemnity is not necessarily awarded because of the termination of the employment contract: it does not therefore constitute remuneration subject to social security contributions.

This ruling reduces the importance of the exact moment of the conclusion of a non-compete agreement concluded within the framework of the termination of an employment contract. In order for a non-compete indemnity to be exempted from social security contributions, such an agreement should not necessarily be concluded after the effective end of the employment contract. Note that the exemption from social security contributions always requires that the non-compete indemnity does not constitute, in reality, a veiled indemnity in lieu of notice.

Note that this judgment does not concern the validity conditions of the non-compete clause.

Interim Measures Regarding the Statutory Early Retirement Regime

Until 30 December an employee can benefit from the statutory early retirement regime when she/he has reached the age of 60 and has had a career of at least 35 years. The Act of 28 December 2011 provides for a gradual change in these conditions as from 1 January 2013 (see also our Newsletter of 13 January 2012 (in Dutch)). Hereunder we will summarize the most important transitional measures.

Workers whose notice period started before 1 January 2012 and ends or should have ended after 31 December 2012 can go on early retirement if they have reached the age of 60 and have a career of at least 35 years. A copy of their notice letter has to be attached to their application for the early retirement pension.

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Conditions for Family Reunification Have Been Changed

Effective 22 September 2011 some new rules for family reunification apply. This will have consequences for family members who are non-EEA nationals (European Economic Area) accompanying a non-EEA employee to Belgium.

Spouses and "registered partners" of such non-EEA employees, as well as their children can obtain a residence permit by following a family reunification procedure, which could up until now take up to nine months.

The three main changes that have been made are:

  • the foreign employee (non-EEA national) must have an income (which may not originate from public social security assistance) that is at least 120% of the Belgian minimum living standard income. This percentage was introduced to avoid abuses;
  • this employee must have adequate housingthat meets basic safety- health- and living quality conditions;
  • the notion "durable and stable relationship" (referring to "registered partners") is now expressly legally defined. Such relation is only proven if (i) the partners can prove that for at least one year they have lived legally together in Belgium or elsewhere, (ii) if they prove that they have known each other and have had regular contact for at least two years (instead of one year under the old legislation), or, (iii) if they have a common child.

With regard to the duration of the procedure, the decision on the residence permit must be taken within six months after filing the request.

Tax Circular on 'Project Private PC'

The contribution an employer makes towards what an employee pays for a computer and/or related material can be exempted from tax under certain conditions and within certain limits.

Since 1 January 2009, a new exemption scheme has applied in such situations and the tax authorities have now published a circular on this subject (circular of 11 July 2011).

This scheme is aimed at employees whose annual taxable remuneration does not exceed 21.600 EUR (not indexed amount) or 30.540 EUR for the 2012 tax year.

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