A significant number of employment measures affecting employers were adopted in the final weeks of the last legislative period. The new legislation aims to implement the Jobs Deal that was agreed in the summer of 2018 as well as the draft 2019–2020 interprofessional agreement. We highlight here the most important measures, i.e. the wage margin and the arrangements regarding termination of employment.

Implementation of the Jobs Deal and the draft 2019–2020 IP

In the run-up to the elections, a raft of legislation has seen the light, implementing the Jobs Deal agreed in the summer of 2018 as well as the draft 2019–2020 interprofessional agreement. Specifically, the legislative instruments are:

  • the Act of 7 April 2019 on the social provisions of the Jobs Deal (Belgian Official Gazette 19 April 2019) ("Jobs Deal Act");
  • a draft Act implementing the draft 2019–2020 interprofessional agreement, adopted by the Chamber on 25 April 2019 ("Draft IPA Act");
  • a Royal Decree of 19 April 2019 implementing Article 7, §1 of the Act of 26 July 1996 to increase the employment level and pre-emptively safeguard competitiveness (Belgian Official Gazette 24 April 2019) ("Wage Margin Decree");
  • 14(!) collective labour agreements issued by the National Labour Council ("NLC") with respect to early retirement schemes with company surcharge; and
  • Collective Labour Agreement no. 129 issued by the NLC regarding voluntary overtime hours (see Eubelius Spotlights June 2019).

Maximum wage margin

As the social partners failed to conclude an interprofessional agreement, the maximum wage development margin was set by the Wage Margin Decree. The margin amounts to 1.1% for the period 2019–2020. It comes on top of any automatic wage indexation and wage scale increases. Consequently, employers can raise their wage cost by no more than 1.1%. This margin can be filled at the business sector level, which reduces the margin that is actually available to the individual employers. In this respect, it is advisable for employers to wait until they know whether any initiatives will be taken by the joint committee(s) governing their sector. Although the margin can be utilised in full, it is not mandatory to do so.

Measures regarding termination of employment

Under the Single Employment Status Act, the various business sectors were supposed to enter into collective labour agreements by 1 January 2019 at the latest to ensure that employees dismissed with at least 30 weeks' notice, or severance pay in lieu of 30 weeks' notice, will be granted a termination package consisting as to one-third of employability enhancing measures (see Eubelius Spotlights December 2018  and Eubelius Spotlights March 2019).

As no such collective labour agreements were entered into, the Act has remained a paper tiger. Against this background, the draft 2019–2020 IPA aimed to conclude an alternative interprofessional arrangement by 30 September 2019 at the latest. That date has now been included in the Draft IPA Act. However, the date can be further postponed to 1 January 2021 by means of a royal decree.

Training budget

The Jobs Deal Act specifies that, in future, any employee who has been dismissed with severance pay in lieu will be able to spend a maximum of one-third of such pay as a training budget for professional training programmes. The employee will have 60 months after the termination of his employment agreement to spend this budget. A royal decree will set out the details of this measure.

The part of the severance pay that is paid as a training budget will be exempt from employee's social security contributions. However, a 25% solidarity contribution will be payable by the employer.

The measure will come into force on 1 January 2022 unless a royal decree provides for an earlier date. The measure will co-exist with the measures for enhancing employability (please see above).

Outplacement after dismissal for medical force majeure

From now on, any employee whose employment agreement is terminated by the employer for medical force majeure will be entitled to an outplacement programme with a value of EUR 1,800. The employer must make the outplacement offer in writing to the employee within 15 days following the termination of the employment agreement. The outplacement offer must be tailored to the employee with health issues. The employee will have four weeks to confirm his agreement in writing; his outplacement entitlements will lapse after that deadline. This measure came into force on 29 April 2019.

Obligation to inform in the event of exemption from work during the notice period

The Jobs Deal Act provides for a new obligation for employers who dismiss an employee with a notice period and who subsequently enter into an agreement with the employee exempting the latter from actual work during the notice period. In such event, the employer will have to inform the employee of the fact that he needs to register with the regional unemployment office of his place of residence within one month after the exemption from work became effective. This measure came into force on 29 April 2019.

Specific early retirement schemes with company surcharge

Access to the general early retirement scheme (ERS) with company surcharge is set at the age of 62. Nevertheless, collective labour agreements can provide for specific regimes (with a lower age) and for exemptions to the principle of adapted availability for the labour market.

To implement the draft 2019–2020 interprofessional agreement, the NLC signed no less than 14 collective labour agreements on 23 April 2019. These CLAs aim at extending certain specific early retirement schemes with company surcharge for the 2019–2020 period. The details are summarised in the table below.