News

In our previous newsletter we informed you of the Act on Balanced Labor Market (Wet arbeidsmarkt in balans, to be referred to hereinafter as: the “WAB”) which will become effective per 1 January 2020. In the meantime we have organized two well attended round tabel meetings beginning of October to discuss the WAB into more detail. For those who were unable to attend please take note of some practical tips and recommendations below.

Tips

Transitional compensation

Employees will be entitled more readily to the transitional compensation (transitievergoeding). Employees will be entitled to the transitonal compensation from the first day of service already. Further the transitional severance pay is calculated based on the actual term of the employment. To that end the current rounding off of service time into full semesters is cancelled. Furthermore, the current increased factor for service time after 10 years of employment is abolished.

• Tip: Take this into account when making a budget for dismissal or reorganization or if you enter into an employment agreement for a definite period. Please bear in mind the transitional law: dismissal proceedings which are initiated before the Cantonal Judge or the UWV within this year remain covered by current law, regardless whether the actual date of termination is after 1 January 2020.
• Tip: If notice is given before 1 January 2020 or the employee has given his/her consent to giving notice prior to that date, current law also applies. Please take note of the fact when the employee envokes his right to revoke his consent in time from 1 Januari 2020 before the end of the reflection period, the employment agreement is not terminated. The WAB then applies to a possible following termination initiative.

A cumulation ground for dismissal is introduced, i.e. that it will be allowed to combine two grounds of dismissal in order to achieve a termination of the employment agreement, even though such grounds as such may carry insufficient weight for dismissal. In that event please bear in mind a higher compensation is due which amounts to 50% maximum of the transitional compensation.

• Tip: As a result some employers may consider to hold off an intended dismissal until next year, but please do not rely fully on this: a solid file for dismissal remains a requirement under the WAB.

Chain of contracts

It will be allowed to agree to three fixed term consecutive employment agreements up to a total period of three years instead of two years.

• Tip: It is not necessary to adjust your template employment agreement for a definite period. However seize this opportunity and anticipate on upcoming law upon extending employment contracts this year. The maximum period of 3 years total has instant effect per 1 January 2020, even if the contract was concluded within this year.
• Tip: Refer in a consecutive fixed term employment agreement to preceding employment agreements for a definite period, so the right term and extent of the chain of consecutive employment contracts is taken into account.

On-call employment

Employers will have to offer on-call employes working under a min/max or zero-hour contract a fixed amount of labour hours in the thirteenth month of their employment. Such a fixed number of hours will be determined based on the average hours worked in the 12 preceding months. Furthermore, it will be mandatory to respect a period of at least four days before the start of on-call work. The on-call employee has to be notified electronic or in writing. Derogation from the four day term is possible by means of a collective labor agreement.

• Tip: To build in as much as flexibility as possible please stipulate a fixed period of only 12 months in your min/max or zero-hour contracts.
• Tip: Try to plan the on-call activities carefully and well in advance. The on-call worker has to be called in at least four calendar days before start of the work: please note the original salary remains due if any adjustments in the on-call activities are made (cancellation or change in working hours) after the required four days notice period.
• Tip: For the pervious 12 month period all contract types should be included, even if they are not on-call contracts.
• Tip: The average labour hours in the previous 12 months should be based on compensated hours (and may not drop below the statutory minimum wages).

Premium for unemployment benefits

The premium for unemployment benefits will be differentiated based on the nature of the contract.

• Tip: Make sure the correct contract type is mentioned inthe salary specification.
• Tip: Please apply the correct premium in your wage tax returns.

Please keep an eye on our news letter for more developments with respect to the WAB. Our employment law experts will be happy to keep you updated.