Annualization, floating work schedules and innovative overtime

Employment Alert

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Below, we will discuss how the recently adopted "Flexible and Workable Work" act (FWW-act) aims at providing a more flexible work environment by introducing a general "annualization" of working time and a legal framework for floating work schedules, and by innovating the legal framework for overtime.

Contents

The general annualization of working time

The rules applicable before the FWW-act

Before the FWW-act, the Labour Act of 16 March 1971 provided for the following conditions to apply the so-called "small flexibility" of working time, whereby the hours of work can vary on a daily or weekly basis:

(i) Respect of the applicable weekly working time limit over a reference period of maximum one year, to be determined in a collective bargaining agreement (CBA), or in the work regulations in companies without employee representative bodies

(ii) During the reference period, the employees can only work 2 less or more hours per day (other limits can be defined at sectoral level) than the usually applicable work schedule, without ever exceeding a daily working time of maximum 9 hours (excluding overtime)

(iii) During the reference period, the employees can only work 5 less or more hours per week (other limits can be defined at sectoral level) than the usually applicable work schedule, without ever exceeding a weekly working time of maximum 45 hours (excluding overtime)

(iv) The aforementioned conditions must, along with other provisions, be mentioned in the work regulations in companies without employee representative bodies. In companies with employee representative bodies, these conditions must be determined in a company CBA

Further, the employees can only perform work schedules mentioned in the work regulations, and which were notified to them by at the latest 7 calendar days in advance (some sectors may provide for different notification timeframes).

What changes would the bill bring?

The FWW-act applies the following changes to conditions (i) and (iv) above:

  • The reference period is fixed at one calendar year (1 January - 31 December), or at any other consecutive period of twelve months as determined in the work regulations or CBA. Since the entry into force of the FWW-act, it is no longer possible to determine shorter notice periods. In practice, though, a reference period of one year already applied to many employers in Belgium before the FWW-act, hence the impact of this modification is likely to be limited in practice
  • It becomes possible for employers with employee representative bodies to introduce a small flexibility regime via its work regulations, so without concluding a CBA

The FWW-act however does not alleviate the burdensome obligations linked to this small flexibility regime, i.e. the obligation to only apply work schedules mentioned in the work regulations, to notify the applicable work schedules 7 calendar days in advance.

The FWW-act also foresees transitional measures, whereby the current small flexibility regimes, defined in a CBA, could continue to apply. The transitional measures would apply if the relevant CBA would be registered with the labor authorities before 31 January 2017.

Action points

(i) Verify at sector level if any sectoral CBA would have been concluded during the (to be determined) transitional period, providing for derogating terms of small flexibility

(ii) Where appropriate, introduce small flexibility regimes via the work regulations according to the legally defined procedure to modify work regulations

Introducing a legal framework for floating work schedules

What are floating work schedules?

These are schedules whereby employees are allowed some flexibility regarding the specific start and end times of their working day.

A floating work schedule implies a fixed part, during which the employees must in any event be at the disposal of their employer, and a variable part, a determined period of time during which the employees can chose the specific start and end time of their working day.

Contrary to the work schedules under the small flexibility regime, floating work schedules are not specifically determined in advance.

Before the FWW-act, there was no legal framework for such floating work schedules. They were nevertheless already used in practice and mostly tolerated by the social inspection authorities if certain conditions were met (such as determining working time limits in the work regulations, providing for a time registration system).

The legal framework under the FWW-act

The FWW-act essentially confirms the current practice of floating work schedules in a legal framework.

A floating work schedule must include a variable and a fixed part, as explained above. During the variable parts, the employee is to a certain extent free to determine his start and end time of work. He should nevertheless respond to call-ups from his employer, which would be necessary for ensuring the good conduct of business.

The following conditions must be met:

  • The applicable weekly working time limit must be respected on average over a reference period of 3 calendar months. A longer reference period of maximum one year can however be agreed by CBA or in the work regulations. On the one hand, this means that hours performed in excess to the average weekly working time should in principle be compensated by paid time-off during the ongoing reference period. On the other hand, the employees should make sure they perform the average working time considered over the entire reference period. At the end of each reference period, a surplus or deficit of maximum 12 hours would be permissible (maximum amount of hours can be increased by CBA)
  • At any time during the reference period, the effectively performed weekly working time cannot exceed 45 hours (excluding overtime). In addition, employees can never work more than 9 hours per day during the entire reference period (excluding overtime)
  • A specific system of time monitoring must be implemented, registering the effectively performed time of work, and which at any time can be consulted by each employee and by the social inspection authorities. It appears that this time monitoring system would be different than the one already used in practice by some employers working with variable working schedules, meaning that it cannot be excluded that two separate systems would apply. Employers will be able to implement floating work schedules via a CBA or via their work regulations. If implemented via work regulations, an addendum thereto must be added in which the terms and conditions of the floating work schedules are re-iterated in detail. The work regulations or the supporting CBA must mention several mandatory provisions (maximum amount of working hours per day and per week, the fixed and variable parts, how to recuperate excessive working time performed.)

The FWW-act also provides a specific remuneration system for the employees working under floating work schedules:

  • The employees are entitled to remuneration for the applicable average weekly working time. This way the employee would benefit from a consistent amount of remuneration during the reference period.
  • However, if at the end of the reference period the employee worked less hours than the average working time (for other reasons than force majeure), or in case of termination of the employment contract during the reference period, the employer will in principle be allowed to withhold the excessively paid remuneration from the remuneration still due to the employee
  • If at the end of the reference period the employee worked more hours than the average working time (for other reasons than force majeure), the employee will not be entitled to any paid compensatory leave nor to payment of these hours performed in excess, unless these hours were performed at the employer's request

The aforementioned remuneration terms would thus substantially increase the employee's responsibilities to regularly verify their performed amount of working hours during the reference period.

The FWW-act also foresees transitional measures, whereby the current floating work schedules could continue to apply. If the floating work schedules were applied before the entry into force of the FWW-act, 1 February 2017, and are formalized by CBA or via the work regulations before 30 June 2017, the existing floating work schedules would remain applicable under the same terms as currently tolerated by the labor authorities (a.o. the requirement to implement a specific time registration system, etc.). This would also require complying with notification requirements towards the labor authorities. It is however possible that the aforementioned deadline would be postponed.

Action points

(i) If floating work schedules are already in use and if their continuous application would be appropriate:

  • Verify which notification requirements must be complied with for continuous usage of the existing floating work schedules.
  • Verify if the currently applicable working time registration system (i.e. one of the conditions under which floating work schedules could currently be tolerated by the labor authorities) meets the conditions of the "time monitoring system" as defined in the FWW-act.

(ii) Where appropriate, floating work schedules can be implemented via the work regulations according to the applicable legal procedure.

(iii) Given the complexity of the proposed terms, it will be crucial to determine clear and consistent terms of use of the floating work schedules in the work regulations and in the required annex thereto.

Innovation of overtime

Before the FWW-act, the initiative to perform overtime lied solely with the employer, leaving limited room for the employee to choose times when he could work more hours (to be compensated afterwards).

The FWW-act aims at setting a more flexible legal framework for overtime, by i) generally increasing the maximum overtime limit to 143 hours per reference period; and by ii) creating a regime of "voluntary overtime", which can also be performed by employees willing to do so outside the legally defined circumstances in which overtime is currently allowed.

Before the FWW-act

Before the FWW-act, overtime was only possible in restrictive legally defined circumstances. Some types of overtime also required complying with preliminary notification requirements to the social inspection authorities or the trade union delegation.

There were also different maximum hours of overtime employees could perform during the reference period. If the maximum amount of overtime was reached at a certain point, the employee had to immediately take up paid compensatory leave.

Previously, the maximum overtime limits per reference period varied between 78, 91, 130 and 143 hours.

Per hour of overtime performed, the employee was in principle entitled to a specific overtime premium (+ 50% premium for overtime performed on regular business days, + 100% premium for overtime performed on Sundays and public holidays).

Further, the performance of overtime was in principle combined with granting paid compensatory leave.

New overtime possibilities under the FWW-act

Increasing the maximum overtime limit per reference period

The maximum amount of hours of overtime are generally increased to 143 hours per reference period. A CBA with generaly binding force (algemeen verbindend verklaard door de Koning, rendue obligatoire par le Roi) can increase this maximum limit.

This implies that the different maximum limits (78 hours, 91 hours, 130 hours or 143 hours) are thus replaced by one flat maximum limit of 143 hours.

Voluntary overtime

The FWW-act introduces a new system of "voluntary overtime". This voluntary overtime can be performed outside the legally defined circumstances in which overtime can be performed by employees who have confirmed their intention to perform such voluntary overtime to their employer. The performance of voluntary overtime must meet the following conditions:

  • The employee must take the initiative and must volunteer to perform voluntary overtime to the employer. He must also confirm his consent to perform voluntary overtime in writing. This written consent must be renewed every 6 months (unless a different time frame is determined by sectoral or national CBA, registered with the labor authorities by at the latest 31 January 2017)
  • Voluntary overtime can only be performed upon the employer's request (which can thus be refused by the employee), and for a maximum amount of 100 hours per calendar year. This maximum amount can be increased up to 360 hours by CBA with generally binding force. 25 of these 100 hours (can be increased to 60 by CBA with generally binding force) will not be considered to verify if the maximum amount of hours of overtime per reference period is reached. The remaining 75 hours will however be taken into account in this regard
  • Employees are entitled to the regular overtime premiums for the performance of voluntary overtime, but not to paid compensatory leave. However, if a career savings system (see our specific article on the career savings system on this website) is put in place, the hours of voluntary overtime can be added to the career savings account of the employee concerned

Hence, if not added to such a career savings account, each hour of voluntary overtime performed would in principle generate entitlement to remuneration at a 150% (or 200%, when overtime is performed on Sundays or on public holidays) hourly rate: their regular hourly rate - 100% - plus the applicable overtime premium - 50 % (or 100%, when overtime is performed on Sundays or on public holidays).

Expected impact of the FWW-act

The increase of the maximum overtime limit per reference period is likely to result in the performance of more overtime. As to the voluntary overtime, the fact that it could be performed outside the legally defined circumstances could indeed create a more flexible framework for the performance of overtime.

Having said that, it remains to be seen if employees would be willing to perform voluntary overtime, in particular since they would not be entitled to paid compensatory leave. The FWW-act also seems to impose a heavy administrative burden to implement voluntary overtime.

Action points

(i) Verify if a CBA (with generally binding force) provides for increased maximum limits.

(ii) Implement a practical procedure to be followed to set up a system of voluntary overtime. Such procedure could be implemented in the work regulations.

Return to "Flexible work".