On 3 December 2024, the Labour Court of Appeal of Brussels issued a judgment in response to a claim for manifestly unreasonable dismissal under the Collective Bargaining Agreement (hereafter CBA No. 109). The employee was initially dismissed with a notice period after which the notice period was terminated early, and the remaining notice period was replaced by a severance payment. For the first time, we see a court awarding compensation under CBA No. 109 for both the initial dismissal and the early termination of the notice period.
1. Context
On 27 October 2020, the company terminated the employment contract by registered letter, with a notice period of 3 months and 21 weeks. The employee sent a registered letter requesting the company to provide reasons for his dismissal. However, the company did not respond. Furthermore, the notice period was suspended because the employee was absent for four weeks due to illness and took 13 days of vacation within the same two-month period.
The company later decided to replace the notice period with a severance payment, effective 31 March 31 2021, by registered letter. Again, the Employee requested the reasons for his dismissal. The company responded, stating that the dismissal was for economic reasons, specifically due to the impact of the COVID-19 crisis on the business. This was also noted on the C4 form: "Savings in office department – economic reasons."
2. Judgement
First, the labour court of appeal imposed the civil penalty consisting of damages equal to two weeks' salary based on Article 7 of CBA No. 109, as the employee had requested the reasons for his dismissal with notice, with no response from the company.
Second, the labour court of appeal then ordered the company to pay damages for manifestly unreasonable dismissal, equal to 4 weeks' salary. The court finds the dismissal was not related to his suitability or behaviour, nor to the necessities of the organisation of the company. Moreover, all the elements presented at least demonstrate that the company did not act as a normal and reasonable employer, even if the alleged motives had been the actual reasons for the dismissal.
More surprisingly, the labour court of appeal also awarded compensation of 12 weeks' salary for manifestly unreasonable dismissal for the later change of the notice period to an immediate dismissal. The company argued that the employee could only claim one compensation for manifestly unreasonable dismissal. The labour court of appeal nonetheless agreed with the employee's position.
The Labour Court of Appeal bases its decision on the report of the National Labour Council (NAR-CNT) regarding CBA No. 109 and the Supreme Court's judgment of 25 November 1991 concerning an urgent dismissal during the notice period, to which the former Article 63 of the Act on Employment Agreements on arbitrary dismissal applied. The Labour Court concludes that, under CBA No. 109, the employee is also entitled to be informed by his employer of the specific reasons for the dismissal action of the employer to convert a notice period into an immediate dismissal, along with the payment of a severance payment corresponding to the remaining portion of the notice period. Therefore, all other provisions of CBA No. 109 regarding the communication of reasons and manifestly unreasonable dismissal apply. While the company did respond in a timely manner to the employee's request to know the reasons for the conversion of the notice period to the immediate dismissal, once again, the company failed to demonstrate that the dismissal was based on reasons related to his suitability, conduct, or the necessities of the company's operations. Moreover, even if the reasons had been proven, it would still have been a dismissal that a normal and reasonable employer would never have decided upon.
The company argued that the dismissal was due to economic reasons, such as decreased turnover and the COVID-19 crisis. In addition, the company accuses the employee of being unsuitable for his position, of not performing it as expected, and of lacking or having an insufficient network. However, none of these reasons is substantiated by the company; the motives provided are vague, and their credibility is not demonstrated. The Labour Court of Appeal notes that no document shows the employee was addressed about his work, performance, figures, or areas of concern, even though he had been employed for 8 years. Moreover, there is no evidence of necessary cost savings, as new hires were still being made, and the employee was not given a proper explanation of the reasons for his dismissal, despite his express request.
3. Take-aways:
- This is the first case in which two separate compensations based on CBA No. 109 are awarded to an employee for the termination of one and the same employment contract.
- Until now, the reasoning was that it was a free choice of the employer to decide whether or not he converts the notice period into an immediate dismissal with payment or not. However, this case shows that, at least according to the reasoning of the Labour Court of Appeal, the employer needs to justify this decision as well.
- This new case law severely restricts the freedom of employers to make decisions regarding the correct way to end the employment contract. It also seems disproportionate to award two compensations based on the same legal ground for the same termination process, even if they relate to two distinct termination actions. Therefore, it is not certain whether the other courts will follow this case law.
- Nonetheless, employers are recommended to construct a justifiable ground for the conversion of the notice period to an immediate dismissal. In case the employer knows in advance that the notice period does not need to be performed fully, it is highly recommended to conclude an agreement with the employee to lay down the modalities after the first dismissal action.
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