New dismissal provisions are introduced in order to establish a more 'activating' dismissal law, aimed at supporting the employee after dismissal to navigate within the labour market and increase his employability. Budget provided for training, transition trajectories, and employability-enhancing measures are key concepts that will be explained in the following sections.
A first step in ensuring a more smooth transition from one job to another, are so-called transition trajectories. A transition trajectory allows the dismissed employee to start working for a new employer (the ‘employer-user’) during the notice period. Both the employer and the employee can initiate such trajectory. However, neither party is obliged to request nor to accept it.
The modalities of the posting are to be laid down in a written agreement, signed by the 4 parties that are involved, namely: the employer, the employee, the employer-user and the employment agency or regional public employment service. Hereby the following must be taken into account:
The transition trajectory is linked to and cannot exceed the full notice period. A minimum duration has not yet been set.
The salary for the new position is paid by the employer (not the employer-user) and cannot be lower than the salary for the previous position. If the salary for the position with the employer-user is higher, then the employer is required to pay the surplus salary. However, the employer-user will bear part of the salary burden. It has not been clarified yet which part will be financed by the employer-user.
Termination and expiration
It is possible to terminate the transition trajectory early. Upon early termination, a notice period has to be respected and upon expiration of this notice period, the employee will return to his previous workplace, to work for his employer for the remaining part of the (initial) notice period.
During the transition trajectory, seniority with the employer-user is accrued. If the employee has completed a full transition trajectory with the employer-user then the latter is obliged to offer the employee an employment agreement for unlimited duration. If the employer-user does not, damages will be due. They amount to the salary corresponding to half of the duration of the transition trajectory.
It has to be seen whether or not the transition trajectories are the right tool for ensuring a more activating dismissal policy. For the employer-user, several risks have to be considered, potentially creating reluctancy to apply the transition trajectories. Firstly, the employer-user will bear part of the cost of the salary of the employee. Whether or not a transition trajectory is more interesting for the employer-user than a regular new hire thus depends on how costs will be divided. The salary also has to be higher or equal to the previous salary, limiting the freedom for the employer to apply the salary scales applicable in the company. Moreover, for a new hire, it is possible to first employ him/her for a limited duration, without the obligation to offer an agreement of unlimited duration afterwards and without the financial risk of being obliged to pay damages in case no such offer is made. Additionally,the employer could also have little interest in the application of the transition trajectories. In principle, a transition trajectory has the same effect as a concept already existing, namely: garden leave (salary remains due, absence of the employee is allowed). However, in case of garden leave there is no risk that the employer needs to pay more than what is agreed upon (usually normal salary) and there is no or little administrative burden. And in case of garden leave, the employee can immediately start working elsewhere if and to the extent this is in line with what is agreed to between the parties. As a result, a transition trajectory could also be redundant for the employee.
Secondly, and only in case no transition trajectory is in place, the dismissed employee can benefit from so-called employability-enhancing measures whereby the dismissal package consists of both the ordinary notice period or indemnity in lieu of notice and employability-enhancing measures such as coaching and trainings.
Eligible employees are employees with a notice period of at least 30 weeks.
The severance package consists of two parts: (i) 2/3rd corresponds to ordinary notice period or indemnity in lieu of notice, with a minimum of 26 weeks, and (ii) the remaining part (1/3) of notice period or indemnity in lieu of notice. This division in two parts is only relevant for determining the value of the employability-enhancing measures (the full notice period will have to be performed and the indemnity in lieu of notice will not be reduced). Indeed, the value of these measures equals the employer social security contributions paid on top of the second part (1/3). The measures are therefore financed via the social security authorities and not directly by the employer, who will be obliged to pay the social security contributions anyways. This means that the measures do not lead to extra dismissal costs for employers. However, it should be taken into account that extra costs could arise in case of absence during the notice period (e.g. replacement cost).
Regarding the consequences and modalities of the employability-enhancing measures, a distinction needs to be made between a termination with notice period and a termination with indemnity in lieu of notice:
- In case of termination with performance of a notice period, the employee has the right to remain absent from work, without losing any salary, in order to apply employability measures. This right can be exercised as from the beginning of the notice period. Further modalities, e.g. regarding the duration of the absence, have not yet been determined.
- In case of immediate termination with an indemnity in lieu of notice, the employee needs to remain available for employability measures after the immediate termination of the employment agreement. As soon as the employee finds a new job (either as an employee or as a self-employed contractor), this compulsory availability ceases.
These employability-enhancing measures can be applied in addition to outplacement. Both systems coexist. Given this coexistence, the question arises whether the employability-enhancing measures will create added value. The answer will most likely depend on what the measures will entail.
Individual trainings and training plans
The third way to contribute to a more activating dismissal law is by granting employees an individual right to training. More specifically, employees within a company with more than 20 employees will be granted 4 days of training entitlement per year. This amount will increase in the coming years. For companies employing less than 20 employees no training right is foreseen or the right is reduced to 1 day of training (for companies employing between 10 and 20 employees).
Some specific considerations need to be highlighted in case of termination of the employment agreement. In case of dismissal (i.e. termination of the employment agreement by the employer), the employee can use accumulated training days before the employment agreement formally ends. In the case of immediate dismissal with indemnity in lieu of notice, the remaining training credit seems to constitute a benefit to be considered upon calculation of the indemnity. It has not yet been determined how this benefit should be valued.
If the employee resigns or is dismissed for serious cause, there is no right to claim accumulated training days before the end of the employment agreement. The outstanding credit does not affect the notice period or indemnity in lieu of notice. Employer and employee can, of course, mutually agree otherwise.
Kindly note that in addition to the training right, a requirement for companies to draw up a training plan on a yearly basis is introduced. This plan enlists training opportunities, also focussing on certain target groups. The plan should be subject of deliberation within the representative bodies.
The new dismissal rules still need some finetuning and clarification to be fully ready to be implemented. However, if you have any questions on the above and the impact on your HR policy in the meantime, feel free to contact one of our colleagues in the Employments & Benefits team. We will be happy to assist!