With its decision of 30 January 2017, the Court of Cassation puts an end to the established practice, after an employer has given notice, of signing a (settlement) agreement in order to determine definitively the actual duration of the notice period. According to the Court, clauses whereby the worker waives his right to suspension of the notice period, e.g. in case of incapacity for work or holidays, are only valid if they are concluded when the reason for suspension has actually arisen and only for the period of the suspension which has already elapsed.
Facts
The context of the Cassation decision of 30 January 2017 was a dispute between an employer and a worker who signed a settlement agreement, after notice had been given by the employer. In the agreement, the parties agreed on a notice period of 60 months, which would start on 1 January 2008 and consequently would definitively end on 31 December 2012.
During the notice period, the worker was on sick leave and on holiday several times and for long periods. He considered that he was therefore entitled to an additional severance payment for the periods of suspension of the notice period.
The proceedings before the courts
The Labour Tribunal of Liège ruled that the worker's claim was well founded.
In appeal, however, the Labour Court of Liège rejected the claim. The Labour Court ruled that the worker could validly waive his rights, which he had actually done in the settlement agreement.
The Labour Court based its decision on the following grounds: The imperative nature of article 38, §2 of the Employment Contracts Act, providing – in the case of notice of termination given by the employer before or during the suspension of the employment contract (e.g. in case of incapacity for work) – for suspension of the notice period during the suspension of the contract, prohibits the advance waiver by the employee of the claims to which this right entitles him. At the moment when all risk of exercising pressure on the worker disappears (e.g. upon serving of notice by the employer), the worker is able to sign all agreements and waive the rights he is entitled to. The Labour Court referred to case law of the Court of Cassation which states that a worker may sign any agreement regarding, among other things, the duration of the notice period.
The Cassation decision of 30 January 2017
However, in its decision of 30 January 2017, the Court of Cassation specified that the imperative nature of article 38, §2 of the Employment Contracts Act in favour of the worker only allows the worker to waive suspension of the notice period when the suspension has actually arisen and only for the period of the suspension which has already elapsed. In this case, the settlement agreement was signed before the periods of suspension started, and thus violates article 38, §2 of the Employment Contracts Act.
Impact in practice
In practice, (settlement) agreements are often concluded after notice is given by the employer, in which the arrangements for termination of the employment contract are agreed on, especially regarding the effective end date of the employment contract and the financial consequences of this. Parties have often decided that the employment contract would end on a certain date, regardless of whether one of the legal reasons for suspension would occur, and without additional severance payment.
Following the Cassation decision of 30 January 2017, is it no longer possible to validly include such clauses in a (settlement) agreement. As a consequence, it becomes impossible for the employer to determine with certainty the end date of the employment contract and its financial consequences. The risk of suspension of the notice period can no longer be validly ruled out through a (settlement) agreement.