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Harmonization

The long road to harmonization 

Historically, there has been a clear distinction in Belgian law between blue and white collar workers, based on whether the employee performs manual or intellectual labor. This distinction has meant that employees in Belgium were afforded different rights under Belgian labor law in accordance with their assigned category. Generally speaking, white collar workers were better off than blue collar workers. Differences included the notice period in the case of dismissal, guaranteed pay in the case of illness, salary thresholds, holiday entitlement and even social security liability.

The discriminatory nature of this distinction has been under intense scrutiny since 1993, when the Constitution Court found the difference in status discriminatory and unconstitutional. Initially, the Court favored a system of “progressive harmonization” by the legislator, gradually unifying the rights afforded to each group, rather than requiring an all-at-once approach, in the hope of avoiding a period of legal uncertainty. However, on July 7, 2011, the Constitutional Court changed its tune. While several steps had been taken toward harmonization, progress had been minimal and the Constitutional Court set an ultimate deadline of July 8, 2013 to finish harmonization.

Little progress was made over the next two years. Only days before the deadline did a marathon round of negotiations produce any tangible results. With the help of the cabinet of the Minister of Employment, the social partners finally came to an agreement on July 5, 2013 – and, even then, only on certain areas that need to be harmonized. The Minister of Employment then formed a Compromise Proposal which was validated by the Kern on July 8, 2013 and lays down the key rules of harmonization which will now be translated into legal text. The measures called for in the proposal are due to come into effect as from January 1, 2014.

State of play

Carensdag/Jour de Carence

The main issues agreed upon were the notice periods and the first day of sick leave. The new agreement provides for the elimination of the ‘waiting day’ (carensdag/jour de carence) for blue collar workers. This means that they will now get paid from their first sick day. This cost will be borne by the employer.

New Notice Periods

With regard to dismissal, from January 1, 2014, the new notice periods are indicated in the table and can be summed up as follows:

  • A progressive build-up during the first five years of employment
  • An additional three weeks per year starting from the fifth year of seniority
  • A slower increase past 20 years of seniority
Table 1: New Notice Periods from January 1, 2014
Seniority Notice (weeks) Seniority Notice (weeks) Seniority Notice (weeks)
1st Quarter 2 4 years (+3w/yr) 15 14 years 45
2nd Quarter 4 5 years 18 15 years 48
3rd Quarter 6 6 years 21 16 years 51
4th Quarter 7 7 years 24 17 years 54
5th Quarter 8 8 years 27 18 years 57
6th Quarter 9 9 years 30 19 years 60
7th Quarter 10 10 years 33 20 years 62
8th Quarter 11 11 years 36 21 years (+1/yr) 63
+ 2 years 12 12 years 39 22 years 64
3 years 13 13 years 42 23 years 65

Compensatory Regime for Blue Collar Workers

Additionally, in order to speed up the process of harmonization, a compensatory regime will be provided for blue collar workers, which will operate based on seniority as indicated in the table below. It has been stated that this compensation should not lead to any additional cost for the employer by making notice periods tax exempt. However, many employers still fear that the cost burden will inevitably fall onto their lap.

Table 2: Compensatory Regime for Blue Collar Workers
Seniority at the moment of the publication of the new regulations Date on which the notice period should be at least equal to the new regulations
30 years or more As of publication
20 years 01/01/2014
15 years 01/01/2015
10 years 01/01/2016
Less than 10 years 01/01/2017

To demonstrate, let’s take an example of a blue collar worker who has worked from January 1, 1995 to July 1, 2020. Before harmonization, this employee would have been entitled to a maximum notice period of 33 weeks. This is based on the fact that he would have been awarded a 12-week notice period, under the Collective Bargaining Agreement No. 75, for the period up until December 31, 2013. From January 1, 2014, if the counter is reset to zero, the employee would then accumulate 21 weeks in that period in addition to the previous 12. However, the employee will have worked for 20 years by January 1, 2015. Under the compensatory regime, this employee is therefore entitled to the same notice period as if his whole career were under the new regime. In July 2020, this blue collar worker is therefore entitled to a 67-week notice.

Currently, many lawyers and with them, the Chamber, fail to see how this 34-week jump can not inevitably produce significant additional costs for the employer.

Legal limbo

Although legal certainty should be one of the main benefits of the new approach, employers fear that there will be additional costs due to legal uncertainty, at least in the short term. Problems will now arise for employment tribunals for the period between July 8, 2013 and January 1, 2014, as the Employment Contracts Act no longer sets out any notice period for blue collar workers and there is therefore no clear legislation to follow. Legal provisions for blue collar workers have been made in the Compromise Proposal, but these are non-applicable as they are not officially amendments to existing legislation. This leaves employment tribunals in a predicament. They can not take a legislative role, nor can they apply law that has been found to be unconstitutional.

In addition to these initial measures, there are many more areas that remain to be harmonized, including the trial period, guaranteed salary, remuneration, temporary unemployment, holiday pay and protection against wrongful dismissal. It therefore appears inevitable that harmonization will increase the cost of labor in Belgium.

As Belgium’s labor costs are already highly uncompetitive, the Chamber has long argued for deep labor market reforms and published its own proposal with regard to the termination of employment (regardless of blue and white collar status) in 2012. The Chamber proposed an alternative way to allocate notice periods, which would increase more smoothly as seniority accumulates. In exchange for lowering the notice periods, AmCham Belgium proposes to introduce a requirement to motivate dismissals, as is required under the last European treaty. The proposal can be downloaded here

AmCham Belgium recommendations:

  • Lower the notice periods
  • Introduce a requirement to motivate dismissals
  • Implement deeper reforms to the labor market that will reduce the overall cost of labor

For more of our policy recommendations, please refer to our Priorities for a Prosperous Belgium.