Brexit - Temporary support measures for undertakings in economic difficulties
09/04/2021

In light of the United Kingdom’s departure from the European Union on 1 January 2021 (‘Brexit’), undertakings in economic difficulties can apply for several temporary support measures: a temporary collective agreement on full or partial suspension of the employment contract, a temporary adjustment of the working hours and the temporary reduction of the individual working time (‘Brexit time credit’).

Temporary support measures for undertakings in economic difficulties as a result of Brexit

Undertakings recognised as ‘undertakings in economic difficulties as a result of Brexit’ (see below for more information on this notion), can invoke certain temporary support measures to mitigate the negative consequences of Brexit. These support measures can provide some relief for undertakings that suffer a sudden decrease in work, by lowering the working time of their employees and as a result temporarily lowering wage costs, without having to resort to individual or collective dismissals.

The temporary support measures introduced by the act of 6 March 2020, are:

  • A simplified system of temporary unemployment due to economic reasons;
  • A temporary, collective, working time reduction, and
  • A temporary, individual, working time reduction (‘Brexit time credit’).

All three support measures are in effect as from 22 March 2021 until 21 March 2022.

Temporary unemployment due to economic reasons resulting from Brexit

Undertakings in economic difficulties as a result of Brexit can use a simplified arrangement of temporary unemployment due to economic reasons in light of Brexit, in which it is possible to fully or partially suspend the employment contract.

The measure can be used for blue- as well as white-collar workers. For each day the employee has not worked (and thus has been put on temporary unemployment according to this scheme), the employer will pay a supplement of at least 5,63 EUR/day on top of the unemployment benefits.

Temporary, collective, working time reduction

The Brexit-specific temporary, collective, working time reduction allows employers to temporarily reduce the working hours with one fourth or one fifth and can be combined with the introduction of a temporary four-day-workweek.

Employers who apply this collective reduction of working hours can enjoy a reduction in social security contributions in the form of a target group reduction per quarter. The target group reduction is fixed and dependent on the procentual adjustment of the working hours and will be higher when it is combined with the introduction of a temporary four-day-week.

Any such temporary collective working time reduction must be accompanied by a wage compensation for the employee, which needs to comprise at least 3/4th of the fixed amount of reduction in social security contributions for the employer. However, the wage compensation may not result in the employee receiving a higher gross salary compared to the gross salary the employee was entitled to before the introduction of the temporary collective working time reduction.

Temporary, individual, working time reduction (‘Brexit time credit’)

A new form of time credit - the Brexit time credit - allows employers to temporarily reduce the individual working hours of that employee with one fifth or half for a period of minimal one month and maximum six months. Employers and employees need to mutually consent to the temporary reduction in a written agreement in accordance with art. 11bis of the Employment Contract Act.

During the period in which the individual working hours of the employee are temporarily reduced, the employee receives an allowance from the National Employment Office (RVA/ONEM). The amount and the rules of these interruption allowances in case of the Brexit time credit are similar to those in a ‘regular’ time credit scheme.

Which companies are eligible?

An employer who wants to use one of the above Brexit support measures, must - next to falling within the scope of the CBA-act of 5 December 1968 - meet two criteria:

Recognition as undertaking in economic difficulties as a result of Brexit

First of all, the undertaking needs to be recognised as an “undertaking in economic difficulties as a result of Brexit”, meaning that they are recognised by the Minister of Work as employers affected by a decrease of at least 5% in turnover, production or orders due to the withdrawal of the United Kingdom from the EU. 

To be recognised as such by the Minister of Work, a motivated application through a model form must be submitted to the Directorate of Guidance for employers in difficulties and restructuring of the FPS Employment, Labour and Social Dialogue.

The period in which undertakings can be recognised ends on 21 March 2022 at the latest.

Collective Bargaining Agreement

Secondly, the undertaking needs to be bound by a sectoral collective bargaining agreement (CBA) drawn up within the Joint Committee (JC), deposited with the registry of the General Directorate of Collective Bargaining Agreements within the week following 22 March 2021. Currently, Joint Committee no. 209 (metalworks industry) is one of the JC’s that already concluded such a sectoral CBA, on 25 March 2021.

In case such sectoral CBA is absent, two different scenarios can occur:

  1. In undertakings with a trade union delegation: the employer must start negotiations with the trade union delegation to conclude a company-level CBA, which must be deposited within 5 working days after the date on which it was concluded. If no such company-level CBA is concluded within two weeks after the start of the negotiations, the employer can still apply the Brexit support measures if he is bound by an approved application for recognition as an ‘employer in economic difficulties as result of Brexit’ (see above).
  2. In undertakings without a trade union delegation the employer needs to be bound by an approved application for recognition as an ‘employer in economic difficulties as result of Brexit’ or can opt to conclude a company-level CBA, which must be deposited within 5 working days following its conclusion. In case there is no trade union delegation in the company, the employer is thus not obliged to first start negotiations for a company-level CBA.

When?

The support measures are temporary in nature, allowing undertakings to absorb the first shocks of Brexit. The Royal Decree of 31 January 2021 determines that these support measures can be applied from 22 March 2021 until 21 March 2022.

Key takeaways

Employers recognised as undertakings in economic difficulties as a result of Brexit, can apply for three temporary support measures: a simplified system of temporary unemployment due to economic reasons resulting from Brexit, a temporary, collective, working time reduction and a temporary, individual working time reduction (‘Brexit time credit’).

These temporary support measures allow undertakings to adapt to the economic difficulties resulting from Brexit. Undertakings that would like to apply these support measures must be recognised as undertakings in economic difficulties resulting from Brexit and need to be bound by a sectoral or company-level CBA. Please keep in mind that these measures are temporary in nature and are only in effect until 21 March 2022.

Related : PwC Legal ( Mr. Bart Elias ,  Mrs. Pascale Moreau )

[+ http://www.pwclegal.be]

Mr. Bart Elias Mr. Bart Elias
Partner
[email protected]
Mrs. Pascale Moreau Mrs. Pascale Moreau
Partner
[email protected]

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