Temporary crisis measures in support of employers facing economic difficulties as a result of Brexit
As of February 1st 2020 the United Kingdom is no longer part of the European Union. This implies profound consequences for many companies doing business with the UK.
In that regard, the Belgian government has launched several aid measures, including the law of 6 March 2020 for the safeguarding of employment after the withdrawal of the United Kingdom from the European Union (the “Law of 6 March 2020”).
The objective of this law consists of limiting the loss of employment, caused by Brexit, as much as possible. To do so, three possible instruments are being offered to employers: temporary employment, time credit and collective reduction of labour hours. These will be discussed below. The instruments allow for the minimization of labour costs by downsizing the volume of labour.
Inspiration for these measures was drawn from the aid measures applicable during the crisis of 2009-2011.
In addition to the above mentioned crisis measures, aid measures are being put into place to limit the salary loss for the employee, as much as possible.
Where the parliamentary preparatory works state that the law of 6 March 2020 would only enter into force in case of a no-deal Brexit, the Royal Decree of 31 January 2021 (laying down the date of entry into force and expiry of the titles 1 and 2 of the law of 6 March 2020, B.G. February 15th 2021), provides for the crisis measures to be applicable during the period between March 22nd 2021 and March 21st 2022.
These measures will be available to all employers experiencing economic hardship as a result of Brexit, which requires an express recognition by the minister of Employment.
The law of 6 March 2020 sets out a minimum requirement of a 5% decrease of turnover, of production or of orders placed as a consequence of Brexit in order to be eligible for aid. This decrease will have to be proven by means of a comparison between the numbers of one of the two months which precede the application and the date of the corresponding month of one of the two calendar years which precede the application.
In addition to the recognition as an ‘employer in hardship’, the employer concerned also has to be bound by a collective labour agreement, put into place by the competent joint labour committee, setting out the specifically implemented crisis measures. Or, in absence of this:
- For companies with union delegation: a collective labour agreement decided at the level of the company;
- For companies without union delegation:
- A approved application for recognition as defined above, or;
- A collective labour agreement decided at the level of the company;
As mentioned above, the package of crisis measures, implemented by the law of 6 March 2020, consists of forms of temporary unemployment, time credit and collective reduction of working hours and will be at the disposal of the employers from March 22nd 2021 until March 21st 2022.
We will now discuss each of the three crisis measures in detail.
A. Temporary unemployment
Firstly, the employer in hardship can choose to apply for the temporary unemployment of its employees, during the period of recognition.
For blue-collar workers the maximum period of this measure is limited to eight weeks if the employment agreement is entirely suspended and to six months if a system of partial employment is put into place.
During the period of temporary unemployment, the blue-collar worker is entitled to a supplement of at least 5,63 EUR a day for each day he does not work, on top of his unemployment allowance. This supplement will be paid by the employer.
For white-collar workers the maximum period of the temporary unemployment is also limited to eight weeks per calendar year in case of an total suspension and to thirteen weeks per calendar year in case a system of partial employment is put into place.
Here too, the white-collar worker will be entitled to a daily supplement for each day he does not work. This supplement will at least be equal to the supplement granted to the blue-collar workers employed by the same employer.
Moreover, for white-collar workers, this supplement can be charged to the Welfare Fund, if a collective labour agreement, declared generally binding by Royal Decree, would be issued to this end.
B. Time credit
The second instrument which is offered to the employer in hardship, concerns the system of time credit.
The employer can propose to each full-time employed employee to reduce his working hours with 1/5 or down to a part-time job during a certain period, which cannot be shorter than one month and which may not exceed six months.
Moreover, in application of this law, an employee employed with working hours of at least ¾ will be considered as a full-time employee.
If the employee agrees with this time credit, the temporary reduction of working hours will need to be put in writing between the employer and the employee in accordance with article 11bis of the Law regarding Employment Agreements, which sets out the requirements for an employment agreement for temporary labour.
The aforementioned agreement can be renewed, without exceeding the legally determined maximum term of 6 months.
During the period of reduced working hours, the employee will receive a similar allowance as the employees who benefit from the general regulation on time credit in application of the collective labour agreement 103ter.
The time credit as put in place by the law of 6 March 2020 will not be deducted from the 51 months of time credit to which the employee is normally entitled.
C. Collective reduction of working hours
Finally, the employer can also opt for a system of collective reduction of working hours. Because of this, the employer can decide to reduce the working hours of all or of a specific category of employees with at least one forth or one fifth, if it concerns full-time employees. Furthermore, a four day working week can also be put into place.
This collective reduction of working hours has to be governed by a collective labour agreement at the level of the company or has to be set out in the company’s work rules, if there is no union delegation. In any case, compensation for salary must be provided for, and will be financed by ¾ of the target-group reduction which the employer will benefit from because of the reduction of working hours.
As mentioned before, these three measures will be at the disposal of the employer, recognised as an ‘employer in hardship’ by the minister of Employment, during the period of March 22nd 2021 until March 21st 2022.
At present it is not yet possible to apply for such recognition, since the application form which is to be used, has not yet been established by the minister of Employement.
Nevertheless, we will keep you informed on any further developments in this regard.
Do you have other queries regarding this subject or do you wish to be assisted in your application for recognition?
Our employment law department will gladly assist you.
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