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.

While the general rule foresees taxation of salaries in the state where the activities are carried out, employees that enjoy this special regime remain taxable in their state of residence, namely France, even though they are employed in Belgium.

This regime was changed by an annex of 12 December 2008 to the double taxation agreement and this annex entered into force on 17 December 2009. The Belgian tax administration has published various circular letters dealing with the regime as its practical concrete application has raised many questions since its entry into force.

This circular letter underlines the importance of the year 2011, because as from 1 January 2012 only those employees who lawfully have the status of frontier worker on 31 December 2011 (and who fulfill therefore at that moment all the required conditions, principally concerning the leaving of the zone) will continue to enjoy this regime.

Finally, the circular letter gives interesting clarification concerning the documents that an employee has to deliver to his/her employer if he/she wishes that the employer does not withhold tax on wages.

The circular letter can be consulted by clicking on one of the links below:

Dutch link
French link

According to the Rome Convention, the parties are free to determine the applicable law when concluding an employment agreement. However, this choice of law may not have as a consequence that the employee would lose the protection of the mandatory rules that would apply in the absence of such choice of law. In such case, the law of the country in which the employee habitually works applies. In the event the employee does not habitually work in any one country, the law of the country where the place of business that hired the employee is situated applies.

However, in the Koelzsch judgment, the ECJ firmly rejects this opinion. Also if the employee works in more than one country, the first criterion (place of habitual employment) should in principle apply. Only if it is impossible for the judge to determine the country with which the work has a significant connection, does the second criterion apply.

The Court defines the place of habitual employment as the place in which or from which the employee performs the greater part of his obligations towards his employer. This is the place where or from where the employee actually carries out his work and, in the absence of a center of activities, the place where he executes the greater part of his professional activities. Amongst other things, the judge should check where and from where the employee mainly fulfills his transport tasks, where he receives his instructions for his tasks and where he organizes his work, where the work instruments are situated and to which place he returns after fulfilling of his tasks.

This case-law is in line with the ECJ's previous case-law in the field of judicial competence and with the Rome I Regulation, which now expressly mentions that in the absence of a choice of law, the law of the country where or from where the employee habitually works applies. The Rome I Regulation applies to employment agreements concluded on or after 17 December 2009.

ECJ, 15 March 2011 (Heiko Koelzsch/Luxemburg (C-29/10))

In the absence of such agreement and after a Government attempt to mediate, the King can, by law, fix the maximum margin for changes in remuneration costs, by a Royal Decree which has been discussed in the Cabinet. Such a Royal Decree has now been published and this time the maximum margin is binding rather than indicative. This has far-reaching legal consequences.

An employer who is confronted with an industry branch CBA which foresees a higher increase in the remuneration costs than the one permitted by inter-professional agreement or Royal Decree can even refuse to execute it. This is exactly what the Antwerp Labour Court decided in its judgment of 14 June 2000, in the framework of the previous binding margin for the period 1997 and 1998.
 
Even though the Remuneration Moderation Act of 26 July 1996 provides criminal sanctions and administrative penalties, these are not (yet) applicable.

The primary objective of the text is to ensure the alignment of personal objectives of workers whose function has a significant impact on the risk profile of the institution with the long-term collective objectives of the institution concerned, notably through an evaluation of the performance realized in a multi-annual framework.

Finally, the payment of at least 40% (or even 60% in some cases) of the variable component of the remuneration must be deferred for a period of at least three to five years, depending on the nature of the risks of the company and the activities of the worker concerned. The one period of retention imposed in connection with the financial instruments is not sufficient to fulfill this obligation of deferred payment.

The principles provided for in the regulation apply to all bonuses paid from 1 January 2011, even when they relate to services rendered before such date.

Directive 2004/113/EC aims to combat discrimination based on sex in access to and supply of goods and services. Article 5 of the Directive prohibits in principle the use of sex as a factor in calculating insurance premiums and benefits as of 21 December 2007. Yet the same article provided for an exception to this general rule. Member States could allow exceptions to the rule of unisex premiums and benefits in so far as the use of sex was a determining factor in the assessment of risk based on relevant and accurate actuarial and statistical data. By 21 December 2012, the Members States were to ascertain whether these exceptions were still justified. Belgium made use of this possibility to allow the continuous use of actuarial data based on sex in life insurance policies (third pillar).

Although the Court's decision only deals with life insurances (third pillar), and occupational pension schemes (second pillar) were left out of the debate, judgement will most likely also have significant impact in the latter area. Further research will show whether, and how quickly, the second pillar will have to bear the scrutiny of gender neutrality. Several elements come to mind: gender-based mortality tables (MR / FR) used in the conversion of capital into annuities or vice versa, the calculation of vested reserves in defined benefit plans, etc.

Measures that have been renewed for a period of two months ending on 31 March 2011, and are extended again until 31 May 2011:

• temporary and collective schemes to completely or partially suspend the employment contracts of white-collar workers (economic unemployment of white-collar workers);
• grant of a crisis-related premium to dismissed blue-collar workers: Any blue-collar worker whose contract is terminated by the employer during the period of validity of this measure (excluding dismissals during the trial period, for serious reason, with a view to retirement or early retirement, in mutual agreement, due to the expiry of a fixed-term contract, or in case of collective dismissal) are entitled to a crisis-related premium of EUR 1,666 borne by the National Employment Office and/or the employer.

The following measures ceased to have effect on 1 February 2011:

• temporary and collective reduction in working time, with or without introduction of the four-day week;
• the "restructuring card" (with respect to workers dismissed following a bankruptcy) and targeted reduction in social security contributions paid by the employer;
• the system of temporary and individual reduction in working time to cope with the crisis (crisis-related time credit).

Since 1970, the legal interest rate evolved as follows:

In fiscal matters and for the National Office for Social Security (NOSS) the rate remains 7% for now.

With regard to salaries and indemnities due to workers, the interest has to be calculated on the gross amount of the remuneration.

Besides the usual subjects (linking social payments to welfare, salary norms, extending the measures relating to early retirement, etc.), the draft I.P.A. contains an important chapter relating to harmonizing the status of blue- and white-collar employees.

As of 2012, the notice period for white-collar employees whose annual gross salary exceeds 30,535 EUR (amount for 2011), would be one month per year of commenced seniority, with a minimum of three months (the trial period is not taken into consideration). This rule would thus replace the Claeys formula as a reference for these employees. Clauses providing for a different notice period could still be agreed on, at the earliest upon entry into service, for those white-collar employees earning more than 61,071 EUR gross per year (amount for 2011). Note, however, that this new regime would in any case only apply for new employment contracts, which means that for all existing employment contracts, the current principle on the basis of which the notice period is determined, would continue to apply. The Claeys formula will thus remain relevant for the years to come.

A final regime would then be worked out by the end of 2012, based on the following principles: the protection against dismissal (after one year of seniority) will be based on three elements, namely a notice period which needs to be worked, a part notice period without working and a part borne by the National Employment Office. Article 63 of the law of 3 July 1978 (abusive dismissal of blue-collar employees) will in its turn be "updated." This "definitive regime" will not touch upon the acquired rights for the applicable employment contracts at the moment of entry into force of this regime.

Harmonizing the status of blue- and white-collar employees also concerns other matters (such as annual holiday, guaranteed wages, waiting day, temporary unemployment, merger of current joint committees, monthly salary payment, etc.).

We will provide you shortly with a more detailed report on the new measures as proposed in the draft I.P.A.