The Constitutional Court recently rendered two judgments with respect to the concept of salary – one in a copyright case (102/2018) and the other in a case concerning professional athletes (89/2018). Both cases were preliminary rulings about disputes involving the National Social Security Office, in which the salary concept was challenged from an equal treatment and non-discrimination perspective. The Constitutional Court ruled that these principles have not been violated.
The Constitutional Court rendered a judgment on articles 2 and 3 of the Professional Athlete's Employment Agreement Act of 24 February 1978 (the "Act of 24 February 1978") on 5 July 2018.
The Act of 24 February 1978 governs a specific category of employment agreements, i.e. between a "professional athlete" and his employer. The Act contains some provisions that deviate from the Employment Contracts Act of 3 July 1978.
One of the legal requirements for obtaining "professional athlete" social status is to earn more than a certain amount determined by the Government every year. The relevant threshold is currently set at EUR 10,200.
The Act expressly states that this amount should be understood as "salary" under the Salary Protection Act. The aforementioned salary concept is broader than the salary concept under the Employment Contracts Act, which only covers the counterpart for performed work, because it includes:
- any cash salary the employee can claim from his employer by virtue of his commitment;
- any tips or service charges to which the employee is entitled following his work or according to custom; and
- any benefits measurable in money which the employee can claim from his employer following his work.
This broader salary concept also applies for social security purposes.
Any professional athlete earning more than EUR 10,200 per year from his sport is deemed to be bound by an employment agreement governed by the specific provisions of the Act of 24 February 1978. The same presumption applies to football and basketball umpires, as well as to football, basketball, volleyball and cycling coaches. Indeed, the Act of 24 February 1978 partially applies to them to the extent that their salary exceeds the aforementioned threshold.
The Ghent Labour Court of Appeal referred a question to the Constitutional Court asking whether this special treatment of professional athletes, i.e. the broader salary concept and the presumption of being bound by an employment agreement, is compatible with the principle of equality.
According to the Constitutional Court, the reference in the Act of 24 February 1978 to the broader salary concept is compatible with the legislator's intention, i.e. to confer social protection on the professional athlete. Indeed, this broader salary concept implies that the threshold will be reached more quickly and that, consequently, "professional athlete" social status will also be obtained more quickly. The reference to this concept does not have any disproportionate effects, according to the Court. In this respect, the Court rules that athletes are not deprived of social protection because their salary does not reach the threshold. For example, if the constituent parts of an employment agreement are clearly present, including salary in return for the work, such athletes will benefit from "employee" social status.
Lastly, please note that the Court has not ruled on the scope of the presumption of an employment agreement and whether or not the presumption is rebuttable.
The second judgment rendered by the Constitutional Court also relates to a specific category of workers, i.e. artists.
In judgment 102/2018 of 19 July 2018, the Court assesses whether social security contributions are due on the allowance awarded to performing artists for transfer of economic rights (copyright or related rights).
The Constitutional Court's judgment has confirmed that the allowance granted for such transfer is deemed to be salary on which social security contributions are due. The Court of Cassation had already taken the same position in a judgment of 15 September 2014.
In the case at hand, involving the National Social Security Office and a production company, the latter disputed that it had to pay social security contributions on an allowance granted to an artist-employee for the transfer of his copyright. The Brussels Labour Court of Appeal decided to refer the following question to the Constitutional Court for a preliminary ruling: Does the fact that social security contributions are due on an allowance granted for the transfer of copyright paid to an artist-employee, whereas self-employed artists are exempted from contributions on such an amount, create a discrimination issue?
Several production companies and, more surprisingly, an organisation protecting artists' interests, intervened in the proceedings before the Constitutional Court and argued that it would be discriminatory to charge social security contributions on an allowance granted for the transfer of copyright of employee-artists.
Nevertheless, the Constitutional Court has ruled that there is no discrimination between employee-artists and self-employed artists, because any artist is free to decide whether or not he would like to work on a self-employed basis or under an employer's authority. Consequently, social security contributions are due on the allowance granted for the transfer of copyright paid to artist-employees.
In both of these decisions, the Constitutional Court has confirmed that the salary concept applicable to professional athletes and artist-employees is constitutional.
The Court's judgment relating to professional athletes confirms the legal scope applicable to "professional athlete" social status and, more specifically, confirms the broader salary concept that needs to be taken into account with respect to the threshold in combination with the presumption of the existence of an employment agreement.
The Court's judgment relating to copyright confirms that social security contributions are due on the allowance granted for the transfer of copyright paid to artist-employees. This ruling is likely to put an end to the occasional practice of granting copyright outside the artistic sphere (e.g. to consultants or computer scientists) with the aim of optimising the remuneration package.
These two judgments will most likely impact the social security treatment of athletes and artists.