In a judgement of 23 June 2022, the Belgian Constitutional Court ruled that the impossibility for a criminal court to fully or partially suspend (‘uitstel van tenuitvoerlegging’/’sursis à l’exécution’) a criminal fine, imposed on a legal entity as a result of the infraction of a level 4 sanctioned Social Criminal Code provision, once more than 40 employees are involved, runs contrary to articles 10 and 11 of the Constitution. Indeed, in case of an infraction of the same provision by a natural person, the criminal sentencing can always be fully or partially suspended, irrespective of the number of employees involved. The Constitutional Court found this difference in treatment to be discriminatory.
Facts and request for preliminary ruling
In the case referred by the Antwerp court of appeal, the late cancellation of the immediate declaration of employment (so-called ‘Dimona declaration’) by a legal entity was established, which is punishable by a level 4 sanction. Such sanction includes a prison sentence between 6 months and 3 years and/or a criminal fine between EUR 600 and EUR 6,000, the latter to be multiplied by the number of employees involved (albeit capped at 100 employees).
The Antwerp court of appeal found that, in the present case – a Social Criminal Code infraction punishable by a level 4 sanction –, it could never fully or partly suspend a criminal fine imposed on the legal entity, as 41 employees were involved. Conversely, such suspension would always be possible for natural persons committing the same infraction, irrespective of the number of employees involved. This follows from i) the way the system of suspension of criminal penalties is set up and ii) how prison sentences for natural persons are converted into criminal fines for legal entities.
The system of suspension of criminal penalties
The provisions of the Act of 29 June 1964 on stay, suspension and probation state that courts can grant full or partial suspension of a criminal sentencing, if the main sentence doesn’t exceed 5 years of imprisonment. For legal entities, which can of course not be sentenced to imprisonment, the 5 year threshold in this respect is replaced with a maximum criminal fine of EUR 120,000. This means that, if a legal entity is sentenced to a criminal fine of more than that amount, no full or partial suspension of that sentence is possible. If we apply these principles to the above-mentioned level 4 sanction, we see that a natural person can always be eligible for a suspension of the sentencing, as the maximum prison sentence is 3 years; well below the 5 year maximum threshold. However, the situation is different for legal entities. In the Belgian (Social) Criminal Code, the penalties that are usually mentioned are the ones applicable to natural persons – as is the case for the Social Criminal Code’s level 4 sanction – without separate penalties for legal entities being explicitly mentioned.
Conversion mechanism for legal entities
The penalties for natural persons cannot be used for legal entities per se, as the latter cannot serve a prison sentence and, instead, a mechanism is applied to convert the prison sentences applicable for natural persons into criminal fines for legal entities. The Antwerp court of appeal used this conversion mechanism in the case at hand and found that the minimum criminal fine for the legal entity involved – for the infraction of a level 4 sanctioned provision with 41 employees involved – amounted to EUR 123,000 and the maximum to EUR 2,952,000. This meant that even the minimum penalty surpassed the EUR 120,000 maximum threshold for a full or partial suspension for legal entities. The Court calculated this as follows:
- by first applying the conversion mechanism of article 41bis of the Criminal Code:
- minimum sentence = EUR 500 to be multiplied by the minimum prison sentence for a natural person (which is 6 months for sanction level 4), so EUR 3,000;
- maximum sentence = EUR 2,000 to be multiplied by the maximum prison sentence for a natural person, in months (which is 36 months), so EUR 72,000;
- then multiplying the result by the number of employees involved (41), which results in;
- a minimum sentence of EUR 123,000 and;
- a maximum sentence of EUR 2,952,000.
This calculation shows that the EUR 120,000 maximum threshold for the application of a suspension of a criminal fine for legal entities is surpassed once more than 40 employees are involved in the infraction of a level 4 sanctioned Social Criminal Code provision.
Request for preliminary ruling
Taking into account the above, the Antwerp court of appeal found three legal disparities in respect of legal entities and presented the Constitutional Court with a request for preliminary ruling on their possible violation of the principles of equality and non-discrimination (as written down in articles 10 and 11 of the Constitution).
More specifically, it found a difference in treatment between, on the one hand, the fact that no suspension of a criminal fine is possible in case of the infraction of a level 4 sanctioned Social Criminal Code provision, once more than 40 employees are involved and, on the other hand:
that, if a natural person were to be found guilty of the same level 4 infringement, a suspension of the sentencing may always be considered by the court, irrespective of the number of employees involved;
that, if a legal entity were to be found guilty of an infringement based on common criminal law punishable by a maximum term of imprisonment of 3 years, a suspension of the sentencing may be granted;
the fact that, if the competent authorities or the labour courts would impose an administrative fine on a legal entity, they could always opt to grant a suspension of the administrative fine, irrespective of the number of employees involved.
The findings of the Constitutional Court
Bearing in mind the legislator's aim of avoiding discrimination between natural persons and legal entities and of seeking the greatest possible parallelism between the two, the Constitutional Court found that it is neither pertinent nor reasonable that the same level 4 infringement committed in respect of 41 employees should be treated differently depending on whether it’s committed by a natural person or a legal entity.
The Constitutional Court therefore ruled that, if a criminal court would not be allowed to grant the full or partial suspension of a criminal fine imposed on a legal entity, following the infraction – with more than 40 employees involved – of a Social Criminal Code provision punishable by a level 4 sanction, this is not in accordance with the principles of equality and non-discrimination as laid down in articles 10 and 11 of the Constitution.
No further examination of the remaining part of the request for preliminary ruling was done by the Constitutional Court, as this could not result in any broader finding of unconstitutionality.
Although the Constitutional Court’s judgement is in principle only binding for the parties involved in this case, other courts that are confronted with the same matter will be able to refer to the outcome of this ruling in order to apply the legal provisions in question in a constitutional manner. It will also be interesting to see if, when and how the legislator will adjust the legal provisions in play here to make them compliant with the Constitutional Court’s findings.
If you have any questions regarding the above, don’t hesitate to reach out; we’d love to hear from you.
Pascale Moreau - Partner, PwC Legal BV/SRL
Sara Vanderstraeten - Advocaat Vennoot / Avocat Associé, PwC Legal BV/SRL
Tel: +32 497 66 41 59