In this issue:
- Failure to determine bonus targets: consequences for the employer?
- Restructuring: towards centralisation of the applicable legislations?
- The National Labour Council examines legislation proposals regarding paternity and maternity leaves
Failure to determine bonus targets: consequences for the employer?
The Antwerp labour court established the consequences in case an employer fails to determine bonus targets in its judgment of 19 June 2019.
In the case at hand, article 2 of the employment contract of the employee set out that the employee was entitled to variable remuneration (commission) on the basis of the current bonus scheme with a minimum of 250 EUR per month and a maximum of 1,500 EUR per month. No bonus targets were, however, included in the employment contract, nor in any other document.
The employee was paid a variable remuneration of 250 EUR per month at the start of his employment in 2012, which was gradually increased to 283,56 EUR in March 2017. In 2016, an annex was drafted with the intention to abolish payment of the variable remuneration, but this annex has never been signed by the employee.
In 2017, following a dispute on the unilateral modification of his position, the employee claimed outstanding variable remuneration due to the failure of the employer to determine bonus targets. The employment contract was unilaterally terminated by the employer in January 2018.
The case was brought before the court in Antwerp and the employee was of the opinion that he was entitled to the maximum amount of 1,500 EUR per month, amongst other things, as his employer had not disclosed any bonus targets.
The Antwerp labour court decided the following in its judgment:
- Article 2 of the employment contract indeed sets forth that the employee is entitled to variable remuneration, the amount of which varies depending on a bonus scheme, with a maximum of 1,500 EUR per month.
- The employer has never provided the employee with the aforementioned bonus scheme and it seems that no bonus scheme had been drafted, as this was not provided during the proceedings before the labour court.
- In not providing the bonus scheme (and the targets) to the employee, the employer made a contractual error.
- Since the employer had undertaken to pay variable remuneration and made it impossible for the employee to reach the bonus scheme targets (in not providing the employee with the bonus scheme and targets), the employee will be entitled to the maximum amount of the variable remuneration.
Taking the aforementioned into account, the labour court determined that the employee is in fact entitled to the difference between the maximum amount of 1,500 EUR and the variable remuneration that was paid to him during the course of his employment.
The judgment of the labour court confirms the point of view of part of Belgian case law, which sets forth that when the bonus amount has been confirmed but the bonus targets have not been communicated transparently to the employee, the employee is entitled to the maximum bonus.
Taking into account the potential consequences, it will thus be important for employers to carefully assess whether any bonus targets are in place and whether these have been provided to the employee.
Restructuring: towards centralisation of the applicable legislations?
Further to the 2017-2018 inter-trade agreements and to the works undertaken within the Group of 10, the National Labour Council drafted an advice on the legislation applicable to restructuring (advice No. 2149 of 17 December 2019), as well as a recommendation addressed to the joint committees (Commission Paritaire, Paritair Comité) and to the undertaking regarding restructuring (recommendation No. 28 of 17 December 2019).
There is currently no such thing as an Act on Company Restructuring, but merely a myriad of specific provisions concerning, for example, collective dismissal, plant closure, the involvement of works councils or trade union delegations, or concerning the generation pact. In some joint committees or in some undertakings, there are also collective bargaining agreements on multiple dismissals or dismissals for economic or technical reasons. As a consequence, it is not always easy to navigate between these legislations.
It follows from advice No. 2149 and from recommendation No. 28 that, for the sake of legal certainty and simplicity, the National Labour Council will provide an advice on a proposal to centralise restructuring regulations. This advice will also provide a proposal to simplify and to improve the flow of information towards the administration and from the administration to the employers and to the employees via a single point and a single information platform.
More information on this topic in future Be Aware publications.
The National Labour Council examines legislation proposals regarding paternity and maternity leaves
Belgian legislation currently provides for a 10-day non-compulsory paternity leave for fathers/co-parents, and does not provide for any compensation for pregnant women forced to convert an incapacity to work occurring six to eight weeks prior to childbirth into prenatal leave.
However, according to its recent advices of 17 December 2019 (No. 1523 and 1524) the National Labour Council is now examining different legislation proposals aiming to:
- ensure that fathers/co-parents actually take their paternity leave;
- make sure that mothers are effectively able to fully enjoy their 15 weeks of maternity leave, without an incapacity to work being converted into prenatal leave and imputed on these 15 weeks.
More specifically, the proposed laws are designed to:
- regarding paternity leave: make it is compulsory for future fathers/co-parents to take their paternity/childcare leave for the birth of their child. The purpose of the proposed legislations is also to extend the paternity leave to 20 days and to be able to distribute these days over time.
- regarding maternity leave: enable pregnant employees incapable for work – due to sickness or accident in the six to eight weeks prior to childbirth, and the work incapacity of whom is converted into prenatal leave – to benefit from 5-week (single birth) or 7-week (multiple births) extension of their post-natal leave for the duration equal to the duration of the incapacity observed.
Hence, the purpose of the legislation proposals is, in some way, to protect employees' rights when expecting children.
More information on this topic in future Be Aware publications.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.