Be Aware Belgium December 2016

Be Aware Belgium Series

Employment Alert

By:
  • Julie Perret
  • Toon Gabriels

Contents

Business transfer and employee pay: what fate is reserved for the different components of remuneration?

In a ruling in cassation of 14 November 2016, the Belgian Court of Cassation decided on a case involving modification of an employee's pay following a business transfer. At present, the situation of employees who are transferred from one company to another is settled by Collective Bargaining Agreement n°32bis, which was made compulsory by royal decree (hereinafter CBA n°32bis) and which is public policy.

The facts in the case can be summarised as follows: after being transferred, a worker saw the components, the conditions of eligibility and the system of his remuneration unilaterally changed by his new employer. Various bonuses and compensations were renamed and recalculated based on a different system, while others were simply deleted and replaced by a single bonus. The variable compensation system which had prevailed for twenty years between the employee and his former employer was replaced by a fixed bonus. Following this, the worker challenged these modifications several times. Then the employee received a letter of termination for serious cause. The management was of the opinion that in spite of warnings and recurring orders to stop his behaviour the employee continued to show an "aggressive and discourteous attitude" to his new employer which had led to an immediate loss of confidence in the worker.

Beyond the legitimacy of the dismissal with urgent cause, it is especially interesting to examine the question of changes in an employment contract following a transfer of business. More precisely, it is convenient to analyse which components of remuneration can and cannot be unilaterally changed by the new employer and thereby restricting the scope of protection of CBA n°32bis related to the remuneration.

The employee’s argument has two aspects. On one hand, he emphasized that the controversial judgement is limited to (without being specific) an establishment of facts which had led the management to dismiss him with serious cause. On the other hand, he argues that it is forbidden for the transferee (new employer) to unilaterally modify the nature of a component of remuneration as well as the conditions of eligibility for benefits of another nature, even if the new system is more advantageous.

The Court of Cassation established in the first place that the judgement which rejected the employee’s action in payment of a severance pay did not have sufficient grounds.

Secondly, the Court recalls that article 7 of CBA n°32bis provides that the transferee cannot modify the prevailing conditions of remuneration without the consent of the employee. Furthermore, it specifies that it is against article 7 of CBA n°32bis to reject the worker’s request for payment of bonuses and annual increase of pay based on the fact that these elements were replaced (unilaterally) by a single bonus, even if it is more advantageous. Finally, the Court recalls that, in regard to the employers' group insurance premium, article 4 of CBA n°32bis specifies that the transfer of employees’ rights to services provided by retirement schemes and survival or incapacity protection as supplementary schemes of social security, are not protected by the above-mentioned article 7.

This judgement is a reminder that article 7 of CBA n°32bis plans a transfer juris et de jure to the transferee (new employer) of the employment contract which has been established by the assignor (former employer). Hence, this automatic transfer occurs without the need to establish a new employment contract. For these reasons, the new employer has a duty to respect the conditions of work and remuneration which were established between the assignor and the employee without, in principle, modifying them unilaterally.

However, CBA n°32bis does not settle the transfer of employees' rights for services planned by the retirement scheme and survival or incapacity protection as supplementary schemes of social security. The new employer has no duty to absorb collective insurance schemes or pension funds, except as otherwise agreed between parties or if these schemes find their source in a collective bargaining agreement.

After a business transfer, the new employer has the duty to respect the prevailing conditions of employment which were defined between the former employer and the employee. The new employer cannot decide to unilaterally change the remuneration’s components and has the obligation to assume all of them except for the supplementary schemes of social security which have been agreed before the transfer.

Julie Perret


Is a dismissal, linked to the employee's disability, manifestly unfair within the meaning of CBA n° 109?

In a judgement of 6 July 2016, the employment tribunal of Antwerp (Tongeren division) had to decide on an employee's dismissal related to disability which prevented him from working.

The facts can be summarised as follows.

An employee entered into service for an indefinite period as an internal driver. At a certain moment, he was transferred to another function due to medical reasons.

At the end of 2013, a reorganization of the employer took place. The employee could keep his job, though was being transferred back to his initial function.

Since 2014, the employee had been disabled. The periods of disability were extended every time, and attested to by medical certificates.

The employer immediately terminated the employment contract on 15 July 2014 by paying an indemnity in lieu of a notice period.

The letter of notification did not have sufficient grounds, and the ‘C4’ document lists “no longer qualifies for his job requirements” as the reason for the dismissal.

By letter of 12 August 2014, the trade union organization reported on behalf of the employee following the specific reasons leading up to his dismissal. On 11 September 2014, the same letter was sent again by the trade union organization, although this time by registered letter.

The employer answered by registered letter of 30 September 2014 that work organization and production were disrupted because of untimely absences, so arrangements had to be made in each instance to compensate for this. According to the employer, this impact on the production process was taken into account during the decision to dismiss the employee.

By letter of 21 October 2014, the employer specified that 'untimely' indicated that the absences were unexpected and not known in advance and thus, they could not be planned for, as opposed to events such as a holiday or a timely, scheduled absence.

The employee did not agree with the reasons mentioned and filed a claim for indemnity equal to 17 weeks of remuneration because of a manifestly unfair dismissal.

The employee first argued that the notice of reasons for dismissal was not provided in a timely manner.

However, the employment tribunal does not uphold the argument of the employee.

According to article 5 of CBA n° 109 regarding grounds for dismissal, the employer must notify the employee by registered letter of the specific reasons for the dismissal within 2 months after receiving the employee's registered letter.

The employment tribunal deemed that the employee wrongly took his standard letter of 12 August 2014 as the starting date. The employment tribunal also added that although the employer's reply of 30 September 2014 does not contain any exhibits, this does not mean it is not a reply within the meaning of article 5 of CBA n° 109.

Secondly, the employee stated that his dismissal would be manifestly unfair. According to CBA n° 109, the employee must prove both that:

  • His dismissal was based on grounds which are not related to the necessities of the organization
  • A normal and reasonable employer would have never have made this decision

The employment tribunal pointed out that it was not feasible to deal with the employee's (extended) absence over and over at the last moment, because he had to be replaced with another employee, whose absence also had to be dealt with in one way or another, and also because the employer did not know if the employee's absence would later be extended. The employment tribunal stated that this situation impedes a decent planning of the work organization within the company. Since the employee's absence was extended every time for a short period, the employer was not able to look for a structural and long term solution.

Taking into account this situation, the employer has decided to terminate the employment contract. It is not for the employment tribunal to decide on how opportune this decision is. However, the employment tribunal does believe that a normal and reasonable employer could opt for that decision given the specifics of the situation. The employment tribunal deems that the reason provided for the dismissal seems to be real and related to the necessities concerning the company’s organisational requirements.

The employment tribunal rejects the employee's claim as ill-founded.

A dismissal linked to an employee's disability is not manifestly unfair if the reason provided is real and related to the necessities concerning the company’s organizational requirements.

Toon Gabriels