Be aware Belgium October 2016

Be Aware Belgium Series

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Employment contract: how can an employee validly waive his rights to claims arising from the employment contract?

In principle, this is only possible after termination of the employment contract, provided a settlement agreement has been concluded with his employer.

In order to be valid, a settlement agreement must meet various conditions, among others the lack of absence of consensus ad idem amongst the parties, mutual concessions by the parties (granting "something extra" on top of the parties' legal rights), etc.

For the employer it is crucial that the settlement agreement includes a clear waiver clause, by which the parties mutually undertake not to make any claims arising from the execution and the termination of the employment contract.

The validity of waiver clauses in settlement agreements is rigorously evaluated by Belgian tribunals and in practice often leads to discussions between employers and their (former) employees.

This became clear, once again, in a recent judgment dated 1 March 2016 by the Brussels Labour Court (Brussels Labour Court 1 March 2016, G.R. 2015/AB/13, www.cass.be).

The case involved an employee whose employment contract was terminated by mutual consent with the employer through the signing of a settlement agreement. In this settlement agreement the parties agreed neither to honour a notice period, nor to pay an indemnity in lieu of notice. Additionally, the employer committed to paying a fixed compensation of €1000 to the employee. The settlement agreement between the parties contained a fairly vague waiver clause, waiving "all contractual and other claims under any legislation".

After signing this settlement agreement, the employee claimed additional payments resulting from the execution of the employment contract, among other things, payment of arrears of salary and holiday pay. The employer denied owing any compensations by referring to the waiver clause mentioned above.

The employee brought the case before court to contest the validity of the waiver clause, among other things. At the first instance the settlement agreement was declared void by the Brussels labour tribunal because of absence of consensus ad idem ono the part of the employee. As a consequence, the labour tribunal did not take into account the aforementioned waiver clause.

The employer appealed this decision before the Brussels labour court.

First, the court ruled that the settlement agreement was not void and subsequently it evaluated the validity of the waiver clause.

In doing so, the court stressed that the waiver of a right is not presumed and that this can only be derived from facts or acts that cannot be interpreted otherwise. According to the court, this entails that a waiver of a right should be sufficiently precise and that it should be formulated in explicit and clear terms.

Moreover, the court stated that a waiver by the employee is only possible upon termination of the employment contract, since as of then "any risk of pressure onto the employee disappears". In this matter it was not the case, since the settlement agreement had been concluded before the agreed termination date.

The court found that the waiver clause was very vague and open to different interpretations, and that there is no clarification whatsoever as to what rights they wanted to waive.

As a consequence, the waiver clause was declared void by the court. As a result, the employer lost its contractual protection against the employee's claims, enabling the latter to still claim the aforementioned arrears from the employer.

An employee can only waive his rights arising from his employment contract after its termination, by concluding a valid settlement agreement with his employer. Special attention should be paid to the wording of the waiver clause: it should be sufficiently clear, accurate and not open to interpretation.

Pierre Dion


Social security: are directors of non-profit organizations subject to the social security scheme for employees or for self-employed persons?

For directors of a corporation, article 3 § 1 of the Royal Decree no. 38 organising the social security scheme for self-employed persons presumes that they are subject to the social security scheme for the self-employed. However, the question that needs answering is: which social security scheme applies to directors of a non-profit organization?

The text of the Royal Decree dated 28 November 1969 for the implementation of the act of 27 June 1969 provides for the extension of the social security scheme for employees if the following cumulative conditions are met:

  • The person concerned is in charge of daily management 
  • It concerns a mandate in an association that does not engage in any industrial or trade activities and that has a non-profit making objective 
  • Carrying out this mandate is the main activity of the person concerned 
  • It concerns a paid mandate (a mandate which only provides room and board is equated with an unpaid mandate)

However, in a judgment dated 25 March 2016, the Ghent Employment Appeal Tribunal, Bruges section, 5 March 2016 found that this article 3 is considered to be an implementation of the Act on the National Social Security Office dated 27 June 1969, yet stretches beyond what the King (in reality, the government) is allowed to do based on this Act on the National Social Security Office. Article 2 of this Act only allows the King to extend the scope of the social security scheme for employees to “people carrying out work in exchange of a salary, without being bound by an employment contract, under the authority of another person or carrying out labour in similar conditions (as those applicable to employees)”. As the Employment Appeal Tribunal correctly observes, with this article the legislator wanted to provide the government with a legal basis in the fight against false self-employment, by enabling people that are self-employed from a labour law point of view, to still be subject to the social security scheme for employees.

People that are directors of a non-profit organization do not fall under the scope of people that are not employees, yet still are under the authority of another person (for example, the interns). As the Employment Appeal Tribunal rightly observes, the mere fact that a person is a director of a non-profit organization does not allow for a clear view on the circumstances under which this mandate was carried out; As such, the Employment Appeal Tribunal concludes that article 3 § 1 of the Royal Decree dated 28 November 1969 is void, since the act of 27 June 1969 only allows the King to extend the scope of the social security scheme for employees to people carrying out work under similar circumstances as employees. An example of this would be article 3 § 5, namely people providing transport for a company, where this company is either the owner of the vehicle, or finances its purchase or rental. Even if these people are self-employed from a labour law point of view, their situation in the field of social security is fairly similar to the situation of employees, as their professional income is fully dependent on 1 person.

On a subsidiary basis, the National Social Security Office argued that, even when disregarding the extension of the social security scheme for employees provided in article 3 § 1, the persons concerned should be considered to be employees, based on the general criteria. However, also based on these criteria, namely (1) the will of the parties, (2) the freedom to organize the working time, (3) the freedom to organize the work and (4) the absence of the possibility to exercise hierarchical supervision, the Employment Appeal Tribunal concluded that the persons concerned were subject to the social security scheme for self-employed persons.

The extension of the social security scheme for employees to certain directors of non-profit organizations, should be considered illegal according to the case-law.

Frederic Brasseur