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VWEW LAW UPDATE - ISSUE 1 (2007)
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| LABOUR LAW |
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New law on training clauses  |
The law of 27 December 2006 has finally issued a legal framework for “training clauses” by introducing a new article 22 bis in the law on employment contracts of 3 July 1978.
Training clauses are agreements by which the employee engages himself to reimburse a part of a training he receives from his employer if he leaves the company prior to the end term provided in the training clause.
Training clauses have to be established in writing and are only valid:
- If they are entered into on an individual basis, prior to the start of the training and the clause does not exceed 3 years
- If the employment contract is entered into for an indefinite duration and the annual salary of the employee exceeds 28.093 EUR gross (figure 2007)
- If the training provides the employee with professional skills he will be able to use outside the company that employs him
- If the training is not governed by legislative or regulatory provisions regulating the profession the employee exercises
- If the training takes at least 80 hours or its value exceeds 2.517,82 EUR
- If they contain a description of the training as well as its duration and specify where the training will take place
- Furthermore, the law provides the maximum reimbursement the employer can claim if the employee does not respect the training clauses :
- Maximum 80% of the training cost if the employee leaves during the first 1/3 of the training period
- Maximum 50% of the training cost if the employee leaves between 1/3 and 2/3 of the training period
- Maximum 20% of the training cost if the employee leaves after 2/3 of the training period
In any case, the reimbursement can never exceed 30% of the employee’s annual salary
- The training clause will have no effect if the employment contract is terminated :
- During the trial period by either party
- After the trial period by the employer without cause
- After the trial period by the employee in case of cause committed by the employer
- By either party in the framework of a restructuring in the sense as provided by the Generation Pact of 23 December 2005
Training clauses which do not fulfill the above mentioned conditions will no longer be valid. This means that for certain categories of employees such as airline pilots, airline mechanics, as well as other professions where training is regulated either by law or other regulations, training clauses will no longer be valid.
The competent labor management committees can issue specific additional rules for their sector.
We will gladly assist you in drafting a valid training clause, which can be a very efficient tool to retain qualified employees and will safeguard the investment of your company in training.
Calculation of the indemnity in lieu of notice in case of dismissal of an employee during a work time reduction
Our Belgian legal system provides in several possibilities for the employee to temporarily reduce his/her work time (career break, time credit, parental leave, etc).
In order to determine the duration of the notice period (and thus the number of months of the indemnity in lieu of notice), the Constitutional Court has decided that one should take into consideration a full-time remuneration.
Whether or not one should take a full or part-time remuneration in order to determine the indemnity in lieu of notice has been a topic of discussion both in case law and doctrine.
A judgment of the Supreme Court of 11 December 2006 seems to put an end to this discussion (Cass. 11 December 2006, www.cass.be). According to the Supreme Court, the "current" remuneration - i.e. the remuneration to which the employee is effectively entitled at the time of the termination of his employment contract - should be taken into consideration to calculate the amount of the indemnity in lieu of notice. If at the moment of termination the employer is working under a part-time regime, his reduced salary will be taken into consideration in order to establish his indemnity in lieu of notice.
Furthermore, the Supreme Court follows an identical reasoning regarding the protection indemnity, which should also be calculated by taking into account the "reduced" remuneration at the moment of termination.
Although the judgment of the Supreme Court concerns an employee who was terminated during a work time reduction within the frame of a career-break, there is no reason to believe that this principle could not be applied in case of a time-credit
Certificate of Social Security Authorities in case of transfer of business assets
To date, in case of a transfer of business assets, income and VAT "tax certificates" had to be obtained from the tax administration, certifying that the transferor did not have any tax debts.
The purpose of this regulation was to avoid that companies could escape their tax obligations at the moment of a transfer of assets. By this mechanism the tax authorities were informed of any asset transaction and could, if need be, collect any outstanding taxes.
Article 41 quinquies of the Social Security Law, which took effect on 23 February 2007, now provides for an identical system for the social security debts towards the Social Security Administration.
Article 41 quinquies of the Social Security Law provides that in case of a transfer of business assets, said transfer is only opposable to the Social Security Authorities within one month after a certified copy of the deed of transfer has been notified to the Social Security Authorities.
Furthermore, the transferee will be jointly and severably liable for the payment of all outstanding social security debts due by the transferor up to one month after a certified copy of the deed has been notified to the Social Security Authorities. This liability is limited to a maximum amount equal to the amount that was paid or deposited within the framework of the asset deal before said one month period expired.
In order to avoid both the unenforceability of the transfer towards the Social Security Authorities and the joint liability of the transferee for all outstanding social security charges, the transferor should join a certificate with the deed of transfer that can be obtained by the transferor with the Social Security Authorities.
Such a certificate will be refused if the transferor still has a certain and collectible debt towards the Social Security Authorities or a social inspection has been announced or is pending.
We were informed that the Ministerial Decree establishing both the standard request forms and the certificates still has to be published. In practice, although the law has already taken effect, the Social Security Authorities can therefore not deliver the certificate as provided by law.
Pending the publication of the Ministerial Decree, the Social Security Authorities will deliver the certificate which is used for companies who wish to participate in public tenders and which contains the same data. Such certificate will, pending the publication of the proper forms, provisionally be accepted by the Social Security Administration as a valid certificate in the sense of Article 41 quinquies of the Social Security Law.
The Commission Guidelines on Vertical Restraints contain specific provisions dealing with the treatment of agency agreements under block exemption regulation No. 2790/1999 on the application of Article 81(3) EC to categories of vertical agreements and concerted practices (paras. 12-20). In its recent CEPSA judgment (Case C-217/05 of 14 December 2006), the EC Court of Justice has now broadly endorsed the Commission's approach under the Guidelines. The Court of First Instance already had the occasion of doing so in DaimlerChrysler v. Commission (Case T-325/01 of 15 September 2005).
The CEPSA case was brought before the EC Court of Justice by means of a reference for a preliminary ruling by the Spanish Supreme Court. The dispute originated from a complaint filed by a petrol dealer association against CEPSA, a leading Spanish petrol supplier. The Spanish competition authority rejected the complaint on the ground that the agreements concluded between CEPSA and the petrol dealers were agency agreements to which Article 81 EC (and the equivalent provisions of Spanish competition law) did not apply. After intermediate appeals, the case was finally brought before the Spanish Supreme Court, which referred questions to the EC Court of Justice.
As a starting point for its analysis, the EC Court of Justice confirms that Article 81 EC does not apply to the contractual relationship between a principal and a commercial intermediary when the intermediary does not determine his conduct on the market independently, but rather depends entirely on his principal, who assumes the financial and economic risks of the activity carried out by the intermediary on behalf of the principal. As the agreements at issue dealt with the distribution of fuel, the question therefore arises whether the service-station operators assume financial and economic risks in relation to the sale of fuel to third parties. Although the EC Court of Justice's ruling does not expressly state so, the reference to risks borne in relation to the sale of fuel to third parties must be seen as a rejection of prior case law, which held that agents could be disqualified as genuine agents on the ground that they bear financial and commercial risks in relation to other activities than those covered by the agency agreement. This position was advocated by the Commission its Guidelines (at para. 15) and is now endorsed by the EC Court of Justice.
The EC Court of Justice further endorses the Commission's approach by examining the existence of financial and economic risks borne by the agent from two points of view: (i) risks related to the sale of the goods and (ii) risks linked to so-called market specific investments (see, Guidelines, para. 14).
As regards the first category (risks related to the sale of the goods), the CEPSA holds that:
- it is likely that the station-operator bears these risks when he takes possession of the goods prior to selling them to a third party.
- service-station operators who directly or indirectly bear the costs of distribution, particularly transport costs, should be regarded as bearing risks linked to the sale of the goods.
- the fact that the service-station operator maintains stocks at his own expense and/or at his own risk could also be regarded as an indication that the risks related to the sale of the goods are transferred to the service-station operator.
- regard must be had to the allocation of the financial risks linked to the sale of the goods, in particular if the service-station operator must pay for the goods regardless of whether he has found a purchaser for the goods or when payment is deferred as a result of payment by credit card.
The service-station operator will also be regarded as bearing risks related to the sale of the goods if he must bear market-specific investments such as investments in premises or equipment (e.g. fuel tanks) or commits himself to investing in advertising campaigns. Also in this respect, the Court broadly endorses the approach advocated by the Commission (Guidelines, para. 14).
If, after the analysis, it appears that the service-station operator bears no risks related to the sale of the goods or only bears a "negligible" risk in this respect, the service-station operator must be regarded as a genuine agent. Such conclusion would imply that obligations imposed on the service-station operator in the context of the sale of goods to third parties fall outside the scope of Article 81 EC. However, exclusivity provisions and non-compete provisions (which do not relate to the sale of the goods to third parties, but concern the relationship between principal and agent) remain subject to scrutiny under Article 81 EC and will be regarded as restrictive of competition if they lead to market foreclosure (compare, Guidelines, para. 19).
The EC Court of Justice's ruling in CEPSA should be welcomed as it generally confirms the approach taken by the Commission in its Guidelines on Vertical Restraints. Some caution is, however, warranted in view of the general formulation of some of the principles put forward by the EC Court of Justice (due to the fact that this was a reference for a preliminary ruling). It must therefore be stressed that the above principles are only to be regarded as general guiding principles and that the required risk allocation must be made on a case-by-case basis, based on the economic facts of the case.
EU enlargement - Bulgaria and Romania: transitional regime for workers
In principle, Belgian employers who wish to hire a foreign worker must obtain a work permit. This requirement is, however, not imposed in respect of nationals of one of the Member States of the European Economic Area (i.e. the 27 EU Member States plus Iceland, Norway and Liechtenstein).
On 1 January 2007, Bulgaria and Romania joined the EU.
The free movement of workers does not apply immediately to citizens of these new EU Member States. The same transitional rules will apply as those applicable to citizens of the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia, who joined the EU on 1 May 2004.
During a transition period, Belgian employers who wish to employ workers from these new EU Member States will need to obtain a work permit B as follows:
| New EU member state |
Transitional regime until |
(Possible) prolongation until |
| Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia |
30 April 2009 |
30 April 2011 |
| Bulgaria and Romania |
31 December 2008 |
31 December 2011
31 December 2013 |
Workers coming from Cyprus and Malta (EU members since 1 May 2004) already benefit from free movement of workers. A work permit is no longer required for them.
On 11 October 2006, the Flemish Parliament adopted a new decree (the Decree) regarding soil decontamination and soil protection (Belgian State Gazette of 22 January 2007). This new Decree is the result of a thorough evaluation of the existing soil decontamination decree of 22 February 1995, which it replaces. The Decree will enter into force on a future date to be determined by the Flemish government. This will not happen before the adoption of a new Flemish Soil decontamination regulation (Vlarebo).
The Decree aims to:
- redefine the decontamination objectives in order to make them more realistic to achieve. For new pollution, decontamination is now aimed at improving soil quality in accordance with the best available techniques (based on the current guidelines for soil quality). As far as historical pollution is concerned, the decontamination aim is to eliminate risk for the people and for the environment.
- redefine the term 'transfer', which should result in a decreasing amount of transactions qualifying as a 'land transfer' (entailing the obligation to carry out a soil survey): e.g. lease contracts will no longer be regarded as a land transfer.
- modify the criteria for a so-called 'innocent occupier'
- simplify or eliminate certain burdensome procedures (e.g. the orientated and descriptive soil survey can be combined in one report).
- offer possibilities to the person liable for decontamination to spread the financial burden in time or to apply for a co-financing regulation
In conclusion, the new Flemish Soil Decree seems to have drawn lessons from the past, and seeks to match the legal framework with the economic reality.
Increased interest rates for commercial transactions
For purposes of the law of 2 August 2002 on combating late payment in commercial transactions, the statutory rate is equal to the interest rate applied by the European Central Bank to its most recent main refinancing operation carried out before the first calendar day of the half-year in question, increased by 7 percentage points and rounded off upwards to the next half percentage point. The statutory rate and any modification thereto are published in the Belgian official gazette. For the first semester of 2007, the statutory rate is increased to 11 %.
Decreased legal interest rate
Art. 87 of the "Program law" of 27 December 2006 introduced a new method to determine the legal interest rate, thereby replacing Art. 2 of the Law of 5 May 1865.
The legal interest rate will be determined each calendar year in accordance with a certain formula.
Each year, in January, the administration of Finance must publish the new rate in the Belgian Official Gazette. This new method should allow to reflect the evolution of the market and ensure stability of the legal interest rate.
The administration published the new rate in the Belgian Official Gazette of 17 January 2007: the new rate will amount to 6 % during 2007.
Two amendments to the Law on Trade Practices
On 3 December 2006, the Federal Parliament adopted two separate Acts amending the Law on Trade Practices and Information to and Protection of the Consumer (Belgian Official Gazette of 20 December 2006).
The first Act contains an amendment to the existing regulations on unfair trade terms in consumer contracts. More specifically, two new blacklisted clauses are introduced and added to the list of Article 32 of the Law. According to a new section (29) of Article 32 of the Law, any provision in a consumer contract whereby the price for a product or a service is increased in the event the consumer refuses to pay for a product or a service by means of the automatic debiting of his account is null and void. A new section (30) of Article 32 provides the same with respect to any clause in a consumer contract whereby such price is increased in the event the consumer refuses to receive invoices by electronic mail. It is to be noted that these new sections do not prevent a seller from granting a rebate in the event the consumer agrees to these proposals by the seller.
A separate Act dated 3 December 2006 introduces a new Article 94ter to the Law. According to this new provision, sellers may charge consumers only for the mere cost of telephone calls relating to the performance of contracts already concluded, and not for any content of such calls. This amendment was introduced to make sure that consumers do not pay more for after sales service provided by call centres of the seller than the telecommunication cost of making the call to a geographic telephone number.
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