Cookies on our website

We use cookies on our website. To learn more about cookies, how we use them on our site and how to change your cookie settings please view our cookie policy.

Read more Close
Skip Ribbon Commands
Skip to main content
Sign In

Publications

Constitutional court brings clarity on pre-2014 contractual termination clauses

 

19 October 2018

Yesterday, the Constitutional Court rendered its judgment on a controversial issue under the 2013 Law on the Unified Status for white-collar and blue-collar employees (the LUS).

This decision settles a debate that had existed since the enactment of the LUS and confirms our long-held legal position in this regard. The Court has ruled that contractual termination clauses in pre-2014 employment contracts with high earning white-collar employees remain enforceable and must be taken into account when calculating the part of notice relative to pre-2014 service.

Background: harmonisation of notice periods 

Following a judgment of the Belgian Constitutional Court in 2011, the distinction between the notice periods of blue-collar and white-collar employees had to be abolished.  This resulted in the harmonisation of notice periods for white-collar and blue-collar employees under the Law of 26 December 2013 concerning the introduction of a unified status for blue-collar and white-collar employees with regard to notice periods and the first day of sick leave and accompanying measures (the LUS).

The LUS also contains important transitional measures.  For dismissals carried out on or after 1 January 2014 that concern employees with pre-2014 employment agreements of indefinite duration (ie employment contracts that commenced before 1 January 2014), a transitory regime has to be applied to accommodate the legitimate expectations of both employers and employees.  Accordingly, the calculation of the notice period requires 2 steps: the first step concerns the calculation of service already accrued as at 31 December 2013, and the second step concerns the calculation of service accrued as from 1 January 2014.

In the first step, the notice period is calculated in accordance with the statutory, regulatory and contractual rules that were in force on 31 December 2013.  However, for higher-earning white-collar employees (ie employees whose annual salary was higher than EUR 32,254.00 on 31 December 2013) an exception applies.  For these employees, the notice period for this first step was fixed by the LUS setting a notice period of 1 month per commenced year of service, subject to a minimum of 3 months.

Controversy over contractual termination clauses

One of the main areas of ambiguity in the LUS was what notice period must be taken into account in this first step if there was a valid but contradictory termination clause in the employment agreement.

Based on a literal reading of the LUS, the fixed rule of 1 month per commenced year of service subject to a minimum of 3 months also applies to those higher earning white-collar employees whose employment agreements contained a valid termination clause.  However, it appears from the preparatory works that it was always the legislator’s intention that contractual notice provisions would overrule the fixed rule of 1 month per commenced year of service.  The text of the LUS was never properly amended in this respect.  Therefore, it remained unclear what position the courts would adopt.

Constitutional Court settles debate

In its decision of 18 October 2018, the Constitutional Court has now ruled that article 68, third paragraph of the LUS breaches article 10 and 11 of the Constitution, insofar as it does not allow valid termination clauses to be enforced for higher earning employees in the calculation of the first step of their notice period.

The Constitutional Court concluded that it is up to the labour court, pending action by the legislator, to end this discrimination, ie by upholding termination clauses validly agreed before 1 January 2014 with a higher earning employee, when calculating the first step of the notice period.

This decision settles a debate that has existed since the enactment of the LUS, and which we are pleased to see has now been resolved, as it confirms our long-held legal position in this regard. This decision will also be welcomed by employers who will be satisfied to learn that their legitimate expectations are being respected, in particular considering that these termination clauses were typically concluded, at least for the highest earning employees, to limit the respective notice periods.

For more information on the initial analysis: C. Bayart, « Het eenheidsstatuut: werking in de tijd, overgangsrecht, tweestappenberekening en conventionele regelingen inzake ontslagrechten en opzeggingstermijn. », R.D.S.-T.S.R., 2015/3, p. 379-465.

 

Publications search




Related people

Client alerts

Already signed up for Client alerts? Click here to access your portal



  • Add comment (optional)