Dismissal due to business reasons in Belgium

AutorPieter Pecinovsky

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Dismissals due to business reasons are mostly connected to collective redundancies. In 2013, 132 companies started the information and consultation procedure (with an announcement) which is obliged in case of collective redundancies, 8865 employees were involved (983 in Brussels, 3759 in Flanders and 4123 in Wallonia). The metal production industry was affected the most, with collective redundancies relating to 2986 employees. 140 companies ended the information and consultation procedure in 2013, resulting in 15717 dismissed employees (942 in Brussels, 9372 in Flanders and 5665 in Wallonia), while at the start of the procedure 16316 jobs were threatened. The procedure thus might have saved 605 jobs. In the metal production sector, 8797 employees lost their employment in 2013, leaving the other sectors far behind. In 2012 "only" 8044 employees lost their jobs in a collective redundancy, in 2011 there were 5654 and in 2010 there were 12862. (Statistics of Federal Government Service of Work Labour and Social Dialogue / FOD WASO, www.werk.belgie.be/defaultTab.aspx?id=30532)

1. How does the legislation or the judicial bodies define the causes that allow for a dismissal due to business reasons?

The Belgian legal system does not differentiate specific causes for the dismissal. The main distinction is between a normal dismissal with compensation (period of notice or termination fee) and a dismissal with urgent cause (without period of notice or termination fee). A dismissal because of business reasons will fall under the normal dismissal with compensation because "urgent cause" demands that the employee himself gave urgent cause to his dismissal.

However the Belgian legal system knows the notion of "economical and technical reasons" as a valid cause to dismiss protected employees (like workers’ representatives) and is also important in case of collective redundancies and at the closure of (a branch of) an enterprise. The laws ruling these subjects do not contain any definition for "economic and technical reasons". Nonetheless, in the preparatory works of The Act of 19 March 1991 ruling the special dismissal procedure for protected (candidate-) workers’ representatives states that these reasons are restricted to the closure of an enterprise, the closure of a branch of an enterprise and the taking out of service of a

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specific group of personnel (Report of 4 March 1991 of the Commission for Social Matters, by Mr. Ansom and Mr. Santkin, 4).

Article 2 of Collective agreement nr. 24 (regarding the to be followed procedure in case of collective redundancies) is states that collective redundancies cannot be due to reasons which are related to the person of the employee(s). According to the commentary of this article this means that the reason for the collective redundancies have to relate to the company itself, i.e. economic and technical reasons, defined in a broad way.

The new Collective agreement nr. 109 about the motivation of a dismissal defines in its article 8 a manifestly unreasonable dismissal as a dismissal of a worker, who was hired for an indefinite term, which is based on reasons which are not related to his capability/suitability or the behavior of the employee or which is not related to the necessities caused by the functioning of the company, an which would never have been taken by a normal and reasonable employer. These necessities caused by the functioning of the company of course can also relate to (economic) business reasons.

2. Do the business reasons that justifying the dismissal must concur in the whole company or can they only concur in the workplace where dismissal occurs?

As long as the reason is not manifestly unreasonable, the employer can dismiss the employee (see question 11). The employer has a relative wide margin of appreciation to determine the organization of his company, since the "business reason" would have to be "manifestly" unreasonable, which is very hard to prove for the employee. Thus both options seem fine.

In the case of a dismissal of a protected employee and a collective redundancy, the Belgian law does not specify whether the reason has to relate to the whole company or the specific workplace. Yet again both options seem to be allowed.

3. What is the procedure that the company must follow to conduct a dismissal for business reasons? Are there specialties in such procedure in relation to the number of workers affected?

There are three different options.

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  1. Non protected employees

    First, in the case of an individual non-protected employee, there is no special dismissal procedure (see question 11). General periods of notice and termination fees apply.

  2. Protected employees

    1. Workers’ representatives:

      The Act of 19 March 1991 ruling the special dismissal procedure for protected (candidate-) workers’ representatives installed a special procedure. There are only two valid causes to dismiss a worker’s representative: with urgent cause (e.g. the behavior of the employee makes it impossible to continue his contract) or due to economic or technical reasons. The procedure for a dismissal due to economic or technical reasons is laid down in article 3, §1: the employer has to put the dismissal case on the agenda of the competent joint labour committee (a committee of employer and workers’ representatives which can e.g. conclude collective agreements for a specific sector) by registered letter. If the company does not fall under the competence of a joint labour committee (or if it is not functional) he has to send it to the National Work Council (Nationale Arbeidsraad). The joint labour committee (or the NAR) will then decide if the reasons of the employer indeed can be qualified as economic or technical. The deadline for this decision is maximum two months after the request of the employer. If they fail to take a decision in those two months, the employer can dismiss in case the company is closing down or in case of a dismissal of a specific group of personnel. This means he can’t dismiss in case of a closing of a closure of a branch of the company.

      Unless the economic and technical reasons are related to the closure of a company or a branch of the company, there is a second step in the procedure which has to be followed. In this case, the employer has to file his case before the president of the labour court. Before the employer can dismiss the representative, the president of the labour court has to recognize the existence of the economic and technical reasons. The court will state its decision in a judgment, against which the protected employees can appeal. The dismissal can take place starting of three days after the deadline for appeal has passed. The technical rules of the procedure before the president of the...

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