Be Aware Belgium March 2017

Be Aware Belgium Series

This edition discusses employer's ability to dismiss an employee for urgent cause if he refuses to be transferred to another city. It also includes an article on whether a sales manager can be considered as a sales representative in the sense of the law.

Contents

Can an employer dismiss an employee for urgent cause because he refuses to be transferred from Brussels to Liège?

A company was led to relocate part of its business from Brussels to Liège for economic and financial reasons. On this occasion, various collective bargaining agreements were signed at the company level with the unions, one of which being a collective bargaining agreement regarding the relocation of the company's business. Accompanying measures were also provided, along with the creation of an employment support cell in order to determine, depending on the situation, to what extent the employee's personal situation prevented him from continuing the professional relationship.

One employee refused to be transferred. He had been employed in Brussels for over 10 years. Even though this employee's employment contract stated that he would be employed in Brussels, it also stated that the employee may be employed in the various departments of the employer's headquarters and offices at a later stage.

After the employee was heard by the employment support cell which had been created, the latter was of the opinion that, given the employee's situation, the employee was bound to perform the job that was offered to him. As such, the employer informed the employee of his new posting. Since the employee kept refusing, the employer told him that if he did not come to work, he would be considered to have quit work. After several formal notices had been delivered to the employee and after the latter once again had refused to be transferred, in a board meeting which he had been invited to, the employer decided to dismiss this employee for urgent cause, justifying his decision by the employee's characterised insubordination, the noncompliance with the collective bargaining agreements at the company level and the non-compliance with his employment contract.

The employee brought legal action before the Court in order to challenge this decision. As the first judge dismissed the case, he appealed to the Brussels Labour Court.

The employee stated in particular that he was not bound by the collective bargaining agreements signed at the company level with the unions which provided the transfer of the business from Brussels to Liège. The Court dismissed that argument. Based on the mandate theory, employees who are affiliated with a union that signed a collective bargaining agreement, are bound by the collective bargaining agreement signed by their union. As a matter of fact, the employee was affiliated with one of the signing unions. According to the Court, the employer's decision to dismiss the employee for urgent cause, following his persistent refusal to be transferred, is justified given the circumstances (the relocation of the business from Brussels to Liège complied with "a legitimate company goal in the best interest of the company and all its employees", the accompanying measures taken by the employer provided "not only accompanying measures, but also the option to go through a trial period after which the employee would be dismissed with a reasonable notice period if the trial period is unsuccessful").

The Court also considered that, even if those collective bargaining agreements at the company level were not binding for the employee, the employee's refusal to go work in Liège constitutes an act of insubordination, taking into account the clause provided in his employment contract, as the employee had accepted in his employment contract that he may be employed in the various departments of the employer's headquarters and offices.

According to the employee, this clause is void based on article 25 of the Act of 3 July 1978 on employment contracts. This article 25 stipulates that "Any clause through which the employer reserves the right to unilaterally change the contract conditions is void".

According to the Court, "article 25 is not intended to have the company blow over by laying down all contractual elements between each employee and the employer". The Court also invoked the relevant case-law of the Supreme Court, according to which article 25 only applies to essential amendments to the employment contract and not to amendments to the ancillary terms which the parties agreed upon.

As a matter of fact, according to the Court, the employee's place of work, in the case at hand, is not an essential term of the employee's employment contract, since the parties to the employment contract wanted to make the place of work a secondary element, if we look at the actual wording of their employment contract. By refusing to be transferred to Liège, the employee committed a breach of contract and according to the Court, this qualifies as an urgent cause.

In the case that had been submitted, the Brussels Labour Court considered that the employee's refusal to go work in Liège definitely qualified as an urgent cause.

Frédérique Gillet


Is a "sales manager" a sales representative?

Recently, the Ghent Labour Court (section of Bruges) was asked to determine whether a sales manager can be considered as a sales representative in the sense of the law, thus being entitled to a clientele indemnity upon his dismissal.

A clientele indemnity is a specific, legally defined additional indemnity for dismissed sales representatives with at least 1 year of seniority, intended to compensate the loss of clients following the dismissal.

When legally due, a clientele indemnity will at least amount to 3 months' remuneration, to be increased gradually according to the sales representative's seniority level.

The underlying facts of the aforementioned judgment can be summarized as follows.

In 2011, an employee entered into the service of a company, in the position of "sales manager". The sales manager formed part of the sales team and was responsible for the commercial relationships with the employer's existing clients and for prospecting new clients. His job description included, among others, maintaining contacts with clients, visiting trade fairs, setting up price offers, contributing to the development of new products, etc.

In 2013, the employer terminated the employment contract with immediate effect by payment of an indemnity in lieu of notice equal to 3 months' remuneration.

Afterwards, discussions arose between the employer and the sales manager regarding the payment of a clientele indemnity. Eventually, the sales manager brought the case before the Courtrai Labour Tribunal.

The Labour Tribunal determined in the first instance that the sales manager did not demonstrate that his main activity would be taking on the position of a sales representative. Hence, his claim for payment of a clientele indemnity was denied.

The sales manager appealed against this decision before the Ghent Labour Court, arguing, among others, that he was paid as a sales representative (in fixed and variable remuneration, the latter in the form of a revenue-based target bonus), that there were no other salespersons active in his designated area of activity, that he was mainly on the road prospecting new clients, that he participated in trade fairs and sales meetings, that he was able to negotiate sales prices and sale and purchasing terms.

To the contrary, the employer stated that the employee's main activities did not consist of prospecting and visiting clients, in view of negotiating and concluding business. Hence, according to the employer he could not be considered as a sales representative as defined by law.

The Ghent Labour Court determined that maintaining regular contacts with existing and potential clients is one aspect of sales representation, but there needs to be more than that to be able to consider an employee as a sales representative as defined by law.

Indeed, these contacts should primarily occur on-site at existing or potential clients, not via e-mail or telephone. Further, these contacts must be aimed at negotiating and concluding business deals. Moreover, visiting clients onsite must be one of the employee's primary tasks.

The Labour Court reckoned the employee's main activity did not consist of visiting clients. Further, the employee's client visits were not aimed at negotiating or concluding business deals, but were instead more focused on marketing activities. The Labour Court corroborated its decision by stating that the employee did not submit any sales orders from clients, nor did he prove that clients placed orders due to his intervention. Further, the employee did not receive any commission payments, which the Labour Court considered to be an important salary component for sales representatives.

Hence, the Labour Court confirmed the judgment of the Courtrai Labour Tribunal.

An employee can only be considered as a sales representative if he can demonstrate that visiting clients is one of his main activities, and that these client visits are aimed at negotiating and concluding business deals.

Toon Gabriëls


DLA Piper EPB Publications of recent months

  • "Vers un travail sur mesure?", Revue de l'UWE (Dynamisme) by Laurent De Surgelose and Frédérique Gillet