In this issue:
- In case of dismissal, should public sector employers assume that the standard preliminary hearing only applies to their statutory staff but not to their contract workers?
- Successive employment contracts: what are the rules that apply to student contracts?
- Is an employer allowed to monitor private communication from an employee on his professional account and if so, under what conditions?
- The Wage Norm Act: wage increases allowed for 2017-2018 gradually becoming clear
- Save the date!
Whenever a statutory staff member is dismissed, public sector employers shall honour both the principle of a preliminary hearing and the principle of the motivation of those decisions. The question is: do these principles apply to contract workers? According to the Court of Cassation the principle of the motivation only applies in case of dismissal of statutory staff members, but not in case of dismissal of contract workers (Cass. 12 October 2015, S.13.0026.N/1).
The Brussels Labour Court referred a question to the Constitutional Court concerning the constitutional nature of articles 32,3° and 37 §1 of the Act of 3 July 1978 on employment contracts.
As a reminder, article 32, 3° stipulates that "Without prejudice to the general ways of extinguishing obligations, the commitments arising out of contracts governed by this Act shall end (…) 3°) if either party so wishes, provided that the contract has been concluded for an indefinite duration or for serious cause".
Article 37 §1 outlines the rules that apply to indefinite-term employment contracts in case of dismissal with a notice period.
These legal stipulations do not include any specific stipulation regarding public sector employers. Just like private employers, public sector employers shall honour these stipulations in case of dismissal of a contract worker.
These are the questions asked by the Labour Court to the Constitutional Court:
Since articles 32,3° and 37 §1 of the Act of 3 July 1978 on employment contracts do not include any specific stipulation concerning the dismissal of a contract worker by public sector employers, how should we interpret those stipulations?
Should we assume that these stipulations authorize public sector employers to proceed with the dismissal of a contract worker without a mandatory preliminary hearing, whereas the statutory staff members of those same employers do have the right to be heard?
- Or should we assume that the wording of those articles does not prevent public sector employers from honouring the principle of a preliminary hearing, both for their statutory staff members and their contract workers?
The Constitutional Court has recently ruled in its judgment of 6 July 2017 (case number 6409, judgment N° 86/2017).
According to the Constitutional Court, interpreting articles 32,3° and 37 §1 of the Act of 3 July 1978 as allowing public sector employers not to schedule a preliminary hearing for their contract workers, before any dismissal decision is taken (unlike for the statutory staff members), would not be compatible with articles 10 and 11 of the Constitution. Such an interpretation would be contrary to the principle of equality.
However, according to the Court, taking into account the wording of those articles considering that they do not include any specific stipulation regarding public sector employers, nothing prevents public sector employers from honouring the principle of a preliminary hearing both for their statutory staff members and their contract workers. Sticking to that interpretation would not be incompatible with the constitutional principle of equality.
Hence, public sector employers applying the standard preliminary hearing only to their statutory staff members but not to their contract workers in case of dismissal, would be violating the constitutional principle of equality
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On 17 January 2017, the Brussels Labour Court delivered a judgment concerning the conclusion of successive employment contracts. It particularly concerned fixed-term student contracts that tacitly followed one after another.
Even if the rules in this area are not new, it must be noted that they are forgotten from time to time. As such, this decision reminds us of the options if an employer wants to hire an individual by using successive fixed-term contracts. It also enables the application of the general rules in the particular case of student employment contracts.
In the case at hand, Ms. X had been hired in June 2006 as a cashier by means of a student employment contract which had been concluded for a six-month term. That same day, a similar contract covering another six-month term had been concluded as well. That one would start when the first contract would end. The following clause had been added in handwriting: “Annex: contract tacitly renewed every six months. The contract can be terminated by either Party by registered letter at the end of each six-month term.”.
Ms. X worked on a regular basis and a few years later, in 2010, she submitted several medical certificates to her employer. The latter sent her a registered letter saying that her student employment contract would not be renewed this time. Ms. X then asked her employer to pay the indemnity in lieu of notice she thought she was entitled to.
In its decision the Court starts out by pointing out the rules regarding successive contracts: one principle with two exceptions.
First and foremost, according to the law, whenever the parties establish several successive fixed-term contracts, they are deemed to have concluded an indefinite-term contract. As a consequence, any contract that is incorrectly terminated will give rise to the payment of an indemnity in lieu of notice in accordance with the rules that apply to indefinite-term contracts. This rule always applies, unless (i) the succession of contracts is due to the employee (upon expiry of the contract, the employee does not resume work but concludes a new fixed-term contract with the same employer later on) or (ii) it is justified by the nature of the work or by other legitimate reasons.
Then there are also a few exceptions. The Court stresses that it is possible to conclude successive employment contracts that are not considered to be an indefinite-term contract if: (i) the parties conclude four fixed-term contracts at the most (of at least three months each) and the amount of these contracts does not exceed two years or (ii) subject to the prior authorization of the Board of the Social Legislation Inspection Services, the parties conclude successive fixed-term contracts of at least a six-month term and the amount of these contracts does not exceed three years.
In this particular case, the employment contract that had been concluded contained a clause on tacit renewal, without limiting the number of successive contracts. Hence, the Court considers it equivalent to an indefinite term contract since no certain end date is mentioned for the contractual relations.
Moreover, on the day the contract was terminated, Ms. X had been with her employer for more than four years, exceeding any limitations.
Finally, the Court stresses that, contrary to what is stated by the Employer, the fact that it concerns a student employment contract is not a legitimate reason to depart from the above rules.
In conclusion, it is important to be cautious when concluding successive fixed-term employment contracts. As a matter of fact, whenever the legal rules are not abided by, the employee can ask for the successive fixed-term employment contracts to be reclassified as indefinite-term contracts (and all it entails, in particular concerning the end of the employment contract). Moreover, the fact that it concerned (successive fixed-term) student employment contracts does not allow for derogation from the principles that apply in this area. Therefore, the rules that apply concerning successive fixed-term contracts also apply to student employment contracts.
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On 5 September 2017, the Grand Chamber of the European Court for Human Rights issued a ruling concerning the compatibility of the employer's right to monitor an employee's private communication and the latter's fundamental right to privacy guaranteed under article 8 of the European Convention on Human Rights (ECHR).
The ruling was prompted by the dismissal of a Romanian employee, Mr. Barbulescu, by his employer. Upon entering into service in 2004, Mr. Barbulescu was requested to set up a Yahoo account for professional purposes. According to internal company regulations, using company resources for private purposes was prohibited. The employer, however, monitored and recorded the communication from Mr. Barbulescu's account for a certain period of time, which showed that Mr. Barbulescu had used his professional account for private communication with his brother and wife. After being summoned to explain his private communication, the employer presented him with transcripts of his personal communication. Eventually, Mr. Barbulescu was dismissed on 1 August 2007.
After Romanian courts had dismissed Mr. Barbulescu's claim that the employer violated Romanian law and article 8 of the ECHR, the case was brought before the European Court. In the first instance the European Court also dismissed his claim, which Mr. Barbulescu appealed against, before the Grand Chamber of the European Court.
The Grand Chamber believes that national authorities must have a wide margin of appreciation when assessing the need to establish a legal framework determining the conditions in which an employer can regulate private communication by an employee in the workplace. However, they must ensure that measures introduced by the employer to monitor communications are subject to adequate and sufficient safeguards against abuse. In this regard, it attaches importance to:
- The clear and prior notification of the employee of the possibility to monitor correspondence and the implementation of such measures
- The scope of monitoring (eg flow of communications or individual content)
- The fact that the employer has provided legitimate reasons and carried out a proportionality assessment (can the purpose of the monitoring also be reached without direct access to the employee's communications?)
- The consequences for the employee and the use the employer makes of the results
- Employee access to a remedy before turning to a judicial body
Given the fact that Mr. Barbulescu was not informed of the fact that his communication could be monitored and the scope thereof, and domestic courts failed to determine if there were legitimate reasons or any other less intrusive measures, the Grand Chamber considered that the Romanian authorities did not adequately protect Mr. Barbulescu's private life and article 8 of the ECHR was violated.
What does this ruling mean for Belgian employers?
The Barbulescu ruling does not bring any new obligations for employers regarding the monitoring of employees' electronic communication at work. Belgian legislation already provides sufficient protection in view of the above to safeguard employees' right to privacy, e.g. by collective bargaining agreement n° 81 to protect employees' privacy in view of the monitoring of electronic communication data.
Monitoring the employee's private communication at work is possible, provided that the employer has duly notified the employee among others about the possibility thereof and the scope of the monitoring. Moreover, the employer must provide legitimate reasons and the monitoring must be proportionate to the aim pursued.
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The Act of 26 July 1996 on the promotion of employment and the preventive safeguarding of competitiveness provides a maximum wage increase which employers are allowed to grant per two-year period (2015-2016, 2017-2018, etc.) As its title indicates, this Act aims to keep the Belgian economy sufficiently attractive by preventing the labour costs in Belgium from increasing faster than in the neighbouring countries (Holland, France and Germany).
However, in the past there was quite some confusion as to how this Act needed to be implemented. Yet, through the interprofessional agreement for 2017 and 2018 and through the Act of 19 March 2017 amending the Act of 26 July 1996 on the promotion of employment and the preventive safeguarding of competitiveness, a lot of issues with regard to this Act have now become clear.
First of all, there is an interprofessional agreement which was obtained for the 2017-2018 time period. This agreement provides that the maximum margin for the evolution of labour costs for the 2017-2018 time period is set at 1.1 percent. This political agreement was confirmed in collective bargaining agreement No. 119 which was concluded within the National Labour Council on 21 March 2017. In view of this maximum margin, negotiations can now take place within the joint committees regarding to what extent and how this maximum margin will be used. Only when it is clear what wage increase is required based on the collective bargaining agreements at the level of the joint committee, employers can verify whether there is still some room, under the Wage Norm Act, for granting wage increases in 2017-2018 at the company level or individually. As a matter of fact, the 1.1 percent margin is a maximum number which the joint committees do not need to use entirely. In addition, the joint committees are free to determine to what extent wage increases or new benefits that would be granted at the company level or individually would be allocated to this margin.
The Act of 19 March 2017 introduced a new definition of "labour costs" by specifying that this concept contains the complete remuneration in money or in kind and refers to the European regulations regarding financial statements. Hence, it is now clear that the Norm Wage Act shall be evaluated at the company level and not at the level of the individual employee.
Because in the past, forecasts about the evolution of labour costs turned out inaccurate several times, since the Act of 19 March 2017 the historical labour cost handicap also needs to be taken into account, this is the way in which labour costs in Belgium have been increasing faster than in the neighbouring countries since 1996. Also, when setting the wage margin for the next two years, both a correction and a safety margin need to be applied in order to rectify possibly wrong forecasts from the past.
The main change, however, is the sanction in case of a violation of the Wage Norm Act. From now on, the Wage Norm Act explicitly provides that the employer is subject to an administrative fine ranging from €250 to €5.000 in case of a violation and that this fine needs to be multiplied by the number of employees concerned, with a maximum of 100, that is.
Because the evolution of labour costs is evaluated based on the average per employee, any violation will logically refer to all employees of the employer concerned. As such, any employer with at least 100 employees is subject to a fine up until € 500 000 in case of a violation.
Furthermore, the fact that the Wage Norm Act now clearly needs to be evaluated at the employer level and the broad definition of labour costs make it fairly easy to verify compliance with the Wage Norm Act. As a matter of fact, it is not needed to verify the evolution of the salary and the various benefits per individual employee. All that is required is to compare the numbers of the financial statements for the fiscal years concerned. Although verification of compliance was a low priority for the social inspection services in the past, from now on, employers are highly recommended to be careful.
The maximum wage margin for 2017-2018 was set at 1.1 percent at the national level. In addition, the Act of 19 March 2017 sorted a few practical problems when implementing the Wage Norm Act.
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In collaboration with UWE (Union Wallonne des Entreprises), DLA Piper organises on 20 October 2017 a breakfast concerning the following topic:
"Loi Peeters : vers un travail faisable et maniable"
For additional information, please contact Frédérique Gillet or Laurent De Surgeloose.
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