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.

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.

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.

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.

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.

On 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.

• the employment contract must be open-ended or for a minimum term of one year
• the employee must have an annual gross wage of at least 49,995 EUR (an amount that will be adjusted annually);
• the employee has to possess a diploma of higher education with such education having lasted at least three years.

The new card is advantageous as employers will only have to request a (temporary) work permit during the first two years of employment, and the employee only needs one "unique" residence permit. Additionally, if an employee has been issued a European Blue Card before in a different EU member state, the process for obtaining residence permits for family members is simplified. Under certain conditions, the years the employee has spent working in another EU member state under a European Blue Card can even be taken into consideration towards issuing a "permanent" residence permit.

Over the summer, other countries such as Poland, Italy and Germany have also implemented the European Blue Card into their legislation. The hope is that Europe will attract highly educated people from third countries by installing a fast track procedure for residency and employment while at the same time guaranteeing them some social and economic rights.

Image credit: AlvaroS

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.

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.

• the individual agreement is concluded within the framework of a CBA, work rules or pension regulations dating from before 28 November 2011, or within the framework of statutory or prescribed regulations, and
• the employee fulfils the conditions mentioned above at the very latest on 28 November 2011.

The Royal Decree imposes these additional conditions to prevent individual agreements being antedated. With respect to CBAs and work rules the registration date and the date of notification to the Federal Public Service Employment, Labour and Social Dialogue are respectively decisive. The individual agreement and the collective regulation should be attached as evidence to the application for the pension.

The Royal Decree also contains specific regulations concerning, among others, miners and seamen.

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.

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.

The exemption related to the purchase of a PC or of peripheral equipment is only granted once per three taxable periods. This restriction does not apply to the contribution to the internet connection or the internet subscription.

The exemption is per taxable period limited to 550 EUR (not indexed amount) or to 780 EUR for the 2012 tax year.

The new scheme is simplified: the employer is no longer obliged to prepare an organized plan; it is sufficient that the employees are informed that the employer is prepared to contribute to the purchase of computer material.

On 8 July 1993, the Constitutional Court ruled that the difference in treatment between blue-collar and white-collar workers which is purely based on the nature of the work, can hardly be considered as a distinction that is based on an objective and reasonable criterion. Therefore, it was up to the legislator to proceed, at least gradually, to a harmonisation of the legal position of blue- and white-collar workers.

According to the Constitutional Court, the existing legal provisions can only be maintained until the legislator adopts new provisions. This needs to be done by 8 July 2013 at the latest. Consequently, until then, nothing will change with regard to the treatment of blue- and white collar workers (apart from the recently modified rules concerning the notice periods). In the event that the legislator would fail to take the necessary harmonisation measures in time, there is a significant risk that, as from 8 July 2013, blue-collar workers would be able to obtain the same treatment as white-collar workers before a court. This judgment of the Constitutional Court will thus undoubtedly cause an upheaval within Belgian labour law.

This fixed amount can be granted to an employee who uses his own vehicle (car, motorcycle or moped) to travel for his employer. For tax purposes, travel between the place of residence and the fixed place of employment cannot be considered as a professional travel and hence cannot be regarded as "travel on behalf of the employer".

In the event the employer would grant a higher compensation, the difference will possibly be regarded as a taxable advantage.

From a social security perspective, this payment by the employer is not regarded as remuneration since it is a cost proper to the employer. Therefore, it is exempted from social security contributions. As a rule, the National Social Security Office takes the same amounts into account as those foreseen by tax legislation.

The new amount applies from 1 July 2011 until 30 June 2012.

In its judgement of 2 May 2011, the Brussels Labour Court stated that these observations cannot be used in court as the privacy of the employee was invaded and such privacy is protected by Article 22 of the Constitution and Article 8 of European Convention of Human Rights, directly applicable to parties of an employment contract.

On the other hand, the Court uses the criteria of 'reasonable expectations' developed by the Supreme Court in 2008 in a new manner. The Court notes in this regard that the employee having a closet which is locked could reasonably expect that nobody has access to it.

Unlawfully acquired evidence may however be admitted, to the extent that the unlawfulness does not affect the credibility of the evidence or the fairness of the trial. This principle is recognized in criminal matters ('Antigone' jurisprudence). Without having taken a position on its applicability in a civil litigation, which is controversial, the Court considers that in this case the invasion of privacy committed by the employer taints the credibility of the evidence brought by the testimonies of the director and the union representative, collected some years after the facts. Therefore, the Court rejected the evidence and also the admissions of the cleaner because these were obtained in an irregular manner.

This exemption, however, involves some limitations. Thus, there is no exemption when the employment contract is being terminated:

• by the employee;
• during the trial period;
• for serious cause; or
• for the purpose of accessing a pension or bridging pension regime.

Neither does the exemption apply in case of termination of an employment contract for a definite period or for a specific work assignment.

With this exemption, the distinction between a severance pay of more or less than 870 EUR, has instantly been brought to an end. Because the amount of the compensation under this cap will, from now on, almost be entirely exempt (or completely as from 1 January 2014), this distinction will be of no importance anymore.

This new regulation will enter into force on 1 January 2012 for notice periods that will be served as from that date. Consequently, there is no point in postponing the payment of the severance pay until a date later than 1 January 2012 in the event the dismissal will already be notified during 2011.

For the seniority premium to be exempted from social security contributions and tax, a number of conditions must be met.

The NOSS had already indicated that the seniority premium can only be granted twice in an employee's career: a first time at the earliest in the calendar year in which the employee completes 25 years of service, and a second time at the earliest in the calendar year in which the employee completes 35 years of service.

For reasons of consistency, the tax exemption must also be conditional to the fact that the premium is granted at the earliest at 25 or 35 years of service, without it being required that it is granted at the moment this seniority is acquired.

A seniority premium which is awarded for the first time to celebrate 30 years of service thus meets the conditions for tax exemption.

It remains of course important that the premium is linked to the seniority of the employee. Premiums awarded for reasons other than seniority remain excluded from the beneficial tax regime.

The (new) exemption applies retroactively to seniority premiums awarded or paid as of 1 January 2006.

In the event of non-compliance with the procedures, the employee is entitled to a protection indemnity which varies from two to eight years of salary.

Can a (candidate-) employee representative waive his entitlement to the protection indemnity after his dismissal? The question has been the subject of controversy since the entry into force of the Act of 19 March 1991 twenty years ago. However, it appears from the case law following the social elections of 2008 that our five Belgian Labour Courts concur with the position that even though the protection is a matter of public order, the employee may validly waive his entitlement to the protection indemnity after his dismissal, since the legal provisions regarding this indemnity do not have a "public order" nature.

In a recently published decision of 16 May 2011, the Supreme Court has now fully confirmed this position. According to the Supreme Court, the fact that the protection against dismissal is a matter of public order the does not mean that rights resulting from this protection would also become matters of public order, making it impossible for the protected employee to waive his entitlement to these rights. As soon as it is established that the employer has not respected the dismissal procedure and that the employee has not requested his reintegration into the employer's company or this reintegration has been refused by the employer, the entitlement to the protection indemnity is finally acquired and the employee may consequently waive it. This decision is of course important in the framework of negotiated departure deals (e.g. early retirement pension). If a settlement agreement takes into account the conditions set out by the Supreme Court, it will be much more secure in the event of possible challenges.

The law requires for instance that, at all times, at least two employee representatives have to be seated in the Works Council and/or the Committee for Prevention and Protection at Work. This is also the reason why an employer can stop the election procedure in his undertaking (TOU) if only one candidate is proposed. In a recently published judgment of 4 April 2011, the Supreme Court gave its opinion about the scope of the dismissal protection of such an employee who was the sole candidate for the social elections.

In this judgment the Court clarified that, in this case, the employee concerned is not considered to be effectively chosen and therefore only enjoys a protection as a candidate employee representative (during four years). This also means that, if a similar scenario would repeat itself during the next social elections, the employee concerned would not be elected twice and would therefore be protected at the second social elections for a duration of two years (instead of four years).

In this context, we also wish to remind you that the so-called "hidden protection period" for the candidates at the 2012 social elections already starts on X-30. In function of your election calendar, this period therefore starts between 8 and 21 January 2012.

These daily allowances cover costs for meals and other small expenses for which it is not always possible for the employee or for the manager who is on a business trip abroad to obtain receipts.

The costs for staying overnight and the travel costs to and from abroad do not fall within the scope of the allowances.

Just like last year, the new list distinguishes flat rate allowances for "category" 1 and a (lower) flat rate allowance for "category" 2. In their Circular of 15 April 2011 the tax authorities confirmed that companies in the private sector can apply the flat rate daily allowances of category 1 in the event of a short business trip abroad.

The amounts themselves are almost the same as last year, except for Norway (increased from 68 EUR to 95 EUR) and for Germany (reduced from 100 EUR to 93 EUR).

The new list applies since 1 April 2011.

Finally, we also want to mention that the tax authorities have defined in their circular of 15 April 2011 that the flat rate daily allowances do not apply to employees or managers for whom the travelling is part of "their normal daily professional activity". What specific rules do apply in that event is not defined by the authority.

These two categories of individuals are exempted from the obligation to obtain a work permit since 2007, but this exemption was only applicable insofar that the stay in Belgium for attending the congress and/or the meeting remained limited to five days a month.

The Royal Decree of 13 March 2011 thus brings the duration of the work permit exemption for these two categories into line with the LIMOSA obligations. Indeed, in these situations, no LIMOSA declaration must be made within these limits. Unlike the rules governing work permits, the LIMOSA obligation also applies to EEA employees who are temporarily or partially working in Belgium.

Furthermore, a few changes to the regulations governing the award of C work permits are also contained in the Royal Decree of 13 March 2011 and the equalization of marriage with registered partnerships (which has applied already since 2008 in practice) is from now on also legally established.

The Royal Decree of 13 March 2011 entered into force on 8 April 2011.

Royal Decree of 13 March 2011 amending Articles 1, 2 and 17 of the Royal Decree of 9 June 1999 on the execution of the Act of 30 April 1999 on the employment of foreign employees

Please note that this exception does not apply to (group) insurers. The prudential surveillance on insurance companies will be transferred as of 1 April to the NBB, whereas the social surveillance on group insurances will be executed by the BFIC.

The introduction of a new surveillance model in the Belgian financial sector is also linked to a change of the name of the BFIC. The new abbreviation in Dutch and French will be as from 1 April "FSMA" (Financial Services and Markets Authority). Its full title will be "Autoriteit financiële diensten en markten" in Dutch and "Autorité des services et marchés financiers" in French.