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Termination and Severance Policies

Learn about the legal processes for employee termination and severance in Belgium

Notice period

In Belgian labor law, specific notice periods are required during employment termination. These periods are determined by the employee's seniority and the party initiating the termination, as outlined in the Employment Contracts Act of 1978.

Notice Period Length

The length of the notice period is influenced by two factors:

  • Employee Seniority: This refers to the total uninterrupted length of service the employee has with the employer (or a company within the same group).
  • Party Initiating Termination: The notice period varies depending on whether the employer is dismissing the employee or the employee is resigning.

Transitional rules apply to employees whose employment began before January 1, 2014, and are terminated after that date. These rules account for the previous distinction between blue-collar and white-collar workers.

Notice Periods for Employer-Initiated Termination

For employers terminating an employee's contract, the minimum notice period is:

  • 1 week for employees with less than 3 months of seniority.
  • The notice period progressively increases with seniority, reaching a maximum of 62 weeks for an employee with 20 years of service, with an additional week added for each year thereafter.

Notice Periods for Employee-Initiated Termination (Resignation)

When an employee resigns, the notice period is generally shorter than for employer-initiated termination.

  • 1 week for employees with less than 3 months of seniority.
  • Notice period capped at 13 weeks for employees with 8 years of seniority or more.

Notice Period Formalities

To be legally valid, the notice of termination must be provided in writing and specify the start date and length of the notice period.

For employer-initiated termination, the notice must be served by registered mail or bailiff. The notice period typically starts on the Monday following the week during which notice was given.

Severance pay

In Belgium, employees may be entitled to severance pay when their employment is terminated under specific circumstances. The conditions and amounts of severance pay are primarily governed by the Employment Contracts Act of 1978, and various Collective Bargaining Agreements (CBA) may also contain additional stipulations on severance.

Circumstances for Severance Pay

Severance pay is generally due in the following scenarios:

  • Dismissal by the employer without just cause or without notice (or insufficient notice): The employer must pay severance equal to the remuneration corresponding to the notice period that should have been observed.
  • Dismissal due to serious misconduct on the part of the worker: The employee is not entitled to severance pay.
  • Specific circumstances: Severance pay may also be mandated in cases of closure of the enterprise, medical force majeure, or collective dismissals.

Calculation of Severance Pay

The calculation of severance pay is influenced by several factors:

Base Calculation

  • Employee's Remuneration: This encompasses the employee's gross salary, including benefits in kind (e.g., company car, meal vouchers).
  • Length of Service: The severance pay increases proportionally with the employee's length of service.

Calculation Formulas

Specific formulas are used to calculate severance pay based on circumstances:

  • Dismissal without notice or just cause: Severance pay is equivalent to the remuneration corresponding to the notice period that should have been observed.
  • Collective dismissals: Here, the severance pay formula involves the employee's remuneration, length of service, and age.

Limitations and Exceptions

  • Trial Period: No severance pay is due during the trial period.
  • Fixed-Term Contracts: Severance may be due if the termination occurs before the contract's end date without just cause.

Additional Considerations

  • Collective Bargaining Agreements (CBAs): Sector-specific or company-level CBAs might stipulate more favorable severance pay provisions for employees.
  • Taxation: Severance pay may be subject to taxation in Belgium.

Termination process

In Belgium, the termination of an employment contract must adhere to specific legal procedures mandated by the Employment Contracts Act of 1978 to ensure fairness and legal compliance.

Initiating Termination

Both employers and employees can initiate the termination of an employment contract:

  • Employer-Initiated Termination: The employer must have a valid reason for dismissal, such as economic reasons, restructuring, or the employee's conduct (underperformance, misconduct, etc.).
  • Employee-Initiated Termination (Resignation): The employee is not required to justify their resignation.

Notice of Termination

  • Form: Notice of termination must be provided in writing and specify the start date.
  • Delivery (Employer Termination): The employer must deliver the notice by registered mail or bailiff.
  • Timing: The notice period typically begins on the Monday following the week during which notice was given.

Termination for Serious Cause

Both parties have the right to terminate the employment contract immediately for serious cause. This includes:

  • Serious misconduct by the employee: Actions that render the continuation of the working relationship impossible.
  • Serious misconduct by the employer: Actions violating the employer's obligations rendering ongoing collaboration impossible.

The employer and employee may mutually agree to terminate the employment contract at any time. The terms of the termination should be formalized in a written agreement.

Other Considerations

  • Protected Employees: Specific protections extend to certain employee categories, such as pregnant employees, trade union representatives, and employees on sick leave.
  • Disputes: Termination-related disputes may be submitted to labor tribunals.
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