CBA n° 109 is applicable on all dismissals served or notice periods starting as from 1 April 2014 and attempts to abolish the legal uncertainty associated with the distinct treatment of blue collar workers (arbitrary dismissal as provided in article 63 of the Law of 3 July 1978 on employment contracts) and white collar workers (general notice of the abuse of law) regarding the possibilities of the contestation of their dismissal.
The European Court of Justice decided in her judgment of 10 July 2012 (K.M.C. vs. Hungary, nr. 19-554/11) that the justification of the grounds for dismissal is based on the right to a fair trial and in particular the possibility of the dismissed employee to execute his right of defense before court. It is within this context that CBA n° 109 grants the dismissed employee the right to be informed of the concrete reasons that have led to his dismissal.
CBA n° 109 seeks to reduce tensions between the dismissed employees and their former employer and to decrease any conflicts that may arise between the parties due to the dismissal. Dialogue between the parties, even after the end of the employment agreement of after notice has been served, fits in a good HR strategy.
However, the social partners have also paid attention to the discretionary competence of the employer. The judge may impose the payment of an indemnification if he judges that the dismissal is deemed to be manifestly unfair, without however assessing the opportunity of the discretionary competence of the employer.
Moreover, not all forms of dismissal were included into CBA n° 109. Indeed, employers are often imposed to follow certain strict procedures and justification requirements and often the legislation already foresees in a more adequate protection of the employee.
As such, CBA n° 109 does not apply to dismissals which were given in the context of the permanent cessation of activities, a closure of undertaking or within the framework of collective dismissals or multiple dismissals due to restructuring. The CBA is also not applicable in case of dismissal for serious cause or in case of a dismissal which is regulated by a particular dismissal procedure as laid down in legal provisions or in collective bargaining agreements (for example, trade union and personnel representatives or candidates).
Also employees who are dismissed during the first 6 months of employment cannot rely on the mechanisms as set out in CBA n° 109. Previous and consecutive employment contracts of definite duration or interim employment with the same employer while occupying an equal function are hereby taken into account.
Finally, CBA n° 109 does not apply to employees who are dismissed during the execution of an interim contract or student contract, employees dismissed in application of the regime of unemployment benefits with additional company allowances or dismissals on the first day of the month following the month in which the employee reaches the statutory retirement age.
The dismissed employee can ask his employer to provide him with the concrete reasons that have led to his dismissal. The employee’s request must always be sent by registered letter within a certain period.
If the employee should perform a notice period, the employee must send his request within a period of 6 months following the notification of the notice period and ultimately within 2 months following the end of the employment agreement (the date of posting of the registered letter is taken into account).
In case the employment agreement is terminated with immediate effect, the employee must send his request within two months following the termination of the employment agreement.
When the employer receives such request, the employer should provide the specific reasons that have led to the dismissal by registered letter to the employee within two months following the date of receipt of the request of the employee.
The employer who does not answer on the request of the employee or who does not answer in time or by respecting the prescribed mandatory forms, must pay a lump sum fine amounting to 2 weeks remuneration to the employee. This penalty can be cumulated with the indemnification that might be due if a court rules that the dismissal is manifestly unfair.
Alternatively, the employer can also notify the dismissed employee at his own initiative and in writing (but not necessarily by registered letter) regarding the reasons that have led to the dismissal, in so far that this notification is sufficient to inform the employee of the specific reasons for dismissal. In such event, the fine mentioned above does not apply.
A dismissed employee who has been notified by his employer about the reasons for dismissal, and who is of the opinion that the dismissal is manifestly unfair, can claim an indemnification before the competent court and should provide the court with the necessary proof. This is a fundamental change in comparison with the burden of proof under the regime of arbitrary dismissal that previously applied to blue collar workers.
If the employer did not provide the employee with the reasons that have led to the dismissal, the burden of proof lies with the employer.
According to CBA n° 109, a manifestly unfair dismissal is a dismissal based on reasons which do not relate to the aptitude or conduct of the employee or on reasons which do not relate to the necessities regarding the functioning of the company, the institution or the service.
Moreover, it is required that a normal and reasonable employer should never have dismissed the employee based on those specific reason(s).
The indemnification that the court can adjudge to the dismissed employee amounts to minimum 3 weeks remuneration up to a maximum of 17 weeks remuneration, depending on the extent to which the dismissal is manifestly unfair. It is questionable whether this vague description and corresponding marginal assessment of the court contributes to legal certainty, to be one of the objectives of this CBA.
The dismissed employee may request to be compensated for the damage actually incurred (in accordance with the provisions of the Civil Code) instead of being compensated according to the provisions of CBA n° 109.
It is important to note that the indemnification provided by CBA n° 109 cannot be cumulated with any other compensation due by the employer and following to the termination of the employment agreement, except for the indemnity in lieu of notice, a non-compete indemnity, the client indemnity or a complementary allowance paid on top of social security benefits (for example a complementary allowance granted in the regime of the unemployment benefit with company allowance).
The National Office for Social Security informed us that it is not yet clear whether the indemnification will be subject to social security contributions. The Royal Decree of 21 December 2013 provides that the amounts which were granted to a dismissed employee when his former employer does not comply with his legal, contractual or statutory obligations, does not fall into the scope of the salary notion. The National Office for Social Security accepts in its administrative instructions that the indemnification granted in the context of an arbitrary dismissal (article 63 of the Law of 3 July 1978 on employment contracts), does not fall within the scope of the notion of salary.
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For the future, employers will have to decide whether or not they will proactively inform employees about the reasons for the dismissal. If so, the employer does not only avoid some formal requirements, but also inverts the burden of proof as the dismissed employee will have to prove that the dismissal was manifestly unfair and that he or she is thus entitled to an indemnification in this respect.
KPMG can of course assist you with this process.