Be Aware October 2022

Age discrimination and election of staff representatives

In its judgement of 2 June 2022 (C587/20), the European Court of Justice applied existing case law on age discrimination in a case with unusual factual elements.

The employer whose policy was challenged as contrary to the prohibition on age discrimination was a Danish trade union. The trade union’s internal rules stipulated that the person in charge of the sector should be elected by members of the trade union for a (renewable) four-year period. The person involved was elected for the first time in 1993 and re-elected in each election up to 2011. She was not allowed to participate in the 2011 elections, though she wanted to, as the internal rules of the trade union stipulated only people who had not yet reached retirement age could be a candidate. The employee involved had reached retirement age stipulated by Danish law.

She challenged this exclusion before the Danish Courts, which concluded that a preliminary question was necessary. The Danish Court wondered whether an elected office within a trade union fell within the scope of the Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation.

Article 3 of Directive 2000/78 stipulates a broad scope of discrimination law, which includes “conditions for access to employment, to self-employment or to occupation.” This should – according to the Court of Justice – be construed in a wide sense, and also covers access to a mandate as staff representative. The post of sector head was a full-time job, so the internal organisation of the trade union could not be seen independently of its obligations as employer.

The fact that the sector head was elected by the members of the trade union was not conclusive for the Court of Justice. While trade unions have – in principle – the freedom to organise themselves however they want, this freedom is not absolute and does not constitute an exception to the requirements of discrimination law. The conclusion by the Court of Justice was that Danish law violated the prohibition on age discrimination by excluding people who have reached retirement age from participating in elections for trade union positions.

Under Belgian law as it stands today, article 19 of the Act of 20 September 1948 holding the organisation of the private sector stipulates that to be eligible as staff representative, a candidate should not yet have reached the age of 65. Similarly, article 2 of the Act of 19 March 1991 stipulating a specific termination modalities for staff representatives in the works council and in the committee for prevention and protection at work, as well as the candidate staff representatives provides that the specific protection stipulated by this Act is no longer applicable to people who have reached the age of 65. Though this Act adds an exception “in case the company has the habit of keeping in service the category of employees they pertain to (once they became 65).”

In light of the prohibition on age discrimination, as set out in this judgement by the European Court of Justice, the validity of this exclusion of staff representatives who have turned 65 is questionable.

There are two more inconsistencies in the Belgian legislation.

Staff representatives are elected in social elections, which normally take place every four years. While the Act of 20 September 1948 stipulates that a worker aged 65 can no longer be a candidate, there can be a period of maximum four years during which a candidate was not yet 65 at the moment of the social elections, is still in service and wants to be a staff representative. Under the Act of 20 September 1948, this person can normally complete their mandate during the normal four-year period up to the next social elections. The Act of 19 March 1991 stipulates that when turning 65, this worker is no longer covered by the specific protection against dismissal applicable for staff representatives, unless the employer usually continues the employment relationship when workers in the category involved reach retirement age.

Both the Act of 20 September 1948 and the Act of 19 March 1991 refer to the moment the worker turns 65. Under the current legislation, the retirement age will increase to 66 in 2025 and to 67 in 2030. As of 2025, the age limit stipulated in these two Acts will no longer correspond with the retirement age.

When it comes to staff representatives in the works council, there’s also an age limit for the representation of “young” workers. Article 19 of the Act of 20 September 1948 stipulates that to be a candidate representing “young” workers, they should not yet have reached the age of 25. The consequences of reaching this age limit are less far-reaching, as a person aged 25 or more can still be a candidate for the workforce in general.

National Office for Social Security takes new position on costs resulting from working from home

Back in 1996, several provisions were added to the Act of 3 July 1996 on employment contracts in relation to employees who work from home. The new article 119-4 of the Act states that employment contracts of employees who work from home must include a clause on the employer’s contribution towards costs connected with working from home (eg heating, electricity). But the Act does not specify what this contribution should be.

If the employment contract does not include this mandatory clause, article 119.6 of the Act stipulates employers should contribute a lump sum expense allowance of 10% of the remuneration. This is traditionally considered to be an expense allowance, so it is exempt of taxes and social security contributions.

The provisions in the 1978 Act apply to employees who work from home.

On 9 November 2005, the National Labour Council signed collective bargaining agreement n° 85 on telework, defined as “a form of organisation of the work whereby, by using IT, work that could have been done at the company premises of the employer, is on a regular basis and not occasionally performed outside the company premises.” In the case of telework, there are several topics that must be included in the employment contract. One of these mandatory topics concerns the employer’s contribution towards costs resulting from telework. Collective bargaining agreement n° 85 does not stipulate what this contribution should be.

The tax administration clarified in a circular of 26 February 2021 which expense allowances it considers acceptable for covering the costs resulting from working at home. A lump sum allowance of maximum EUR142.95 per month (amount applicable as of 1 September), which can be increased by EUR20 per month if the employee has to use their own private internet access for professional reasons, is considered to be acceptable. The National Office for Social Security followed this circular by the tax administration in its instructions.

The circular of 26 February 2021 only refers to telework, and doesn’t mention the rules concerning employees who work from home included in the 1978 Act on Employment Contracts. The circular does not mention the 10% allowance applicable if the employment contract doesn’t include the mandatory clause.

The question arose as to whether it was still possible to pay a 10% expense allowance for an employee who works from home if the amount exceeded the EUR142.95 (or EUR162.95) per month stipulated in the circular.

The new position by the National Office for Social Security is that the 10% allowance ended on 1 June 2022. Introducing a new expense allowance on the basis of this 10% rule is – according to the National Office – no longer possible as of 1 June 2022. If a worker received an expense allowance on the basis of the 10% rule before 1 June 2022, the National Office accepts that this system is continued, provided the employee continues to work from home on a systematic basis.

The position taken by the National Office for Social Security is remarkable. The key date was 1 June 2022, but nothing happened in this field on 1 June 2022. No new legislation was promulgated, and there was also no judgement rendered that would impose a new interpretation of the existing legislation.

A similar approach with a transition period was taken concerning the mobility allowance paid to certain civil servants, where article 19 of the Royal Decree of 28 November 1969 stipulated that mobility allowances that were in force on 1 January 1980 could be continued. This condition was annulled by the Council of State in its judgement of 31 January 2022. An expense allowance should depend on the amounts of the actual incurred professional costs, so a distinction based on the date an expense allowance was introduced is difference in treatment without any objective justification, hence a violation of the principle of egality stipulated by article 10 and 11 of the Constitution.

The 1978 Act on Employment Contracts still stipulates that if the employment contract of an employee who works from home doesn’t include a clause on the employer’s contribution towards costs connected with working from home, a 10% allowance is due. The position by the National Office for Social Security means this 10% allowance applies in the absence of the required contractual clause, but an employer is not entitled to pay the same 10% allowance to cover the same costs resulting from working at home if it’s written in the employment contract.

Employers paying a lump sum expense allowance for the costs resulting from working at home exceeding EUR142.95 per month (EUR162.95 if the employee has to use a private internet access for professional purposes), should be aware that this will probably be contested by the National Office for Social Security. If the expense allowance meets the 10% rule, the outcome of litigation might very well be that the Employment Tribunal would disagree with the National Office for Social Security.