Modernising employment law

The modernisation of employment law Act was recently published in the Belgian Official Journal (B.S./M.B. 17 August 2013). The Modernisation Act aims to (i) implement more working time flexibility, (ii) extend the regulation on the innovation premium and (iii) extend the exemption to recruit young people.

1. More working time flexibility

Increase of the “internal limit”

Consecutive legal changes to Article 19 of the Employment Act of 16 March 1971 (the Employment Act) reduced the maximum weekly working time from 40 to 38 hours. Within a number of business sectors, the working time reduction was realised by maintaining the weekly working time schedules of 40 or 39 hours a week and by respectively awarding workers 12 or 6 days of compensatory leave.

All companies must, however, observe an average weekly working time of (maximum) 38 hours per trimester. This reference period can be prolonged to a year. Any hour performed above the 38 hours a week must, in principle, be compensated before the end of the reference period. In addition, even during this period, the employee could in principle never exceed the average weekly working time by more than 65 hours (the internal limit). This internal limit could be increased to 130 hours after following a specific procedure.

The Modernisation Act increases the internal limit from 65 to 78 hours per trimester or to 91 hours when the reference period is extended to a calendar year (but this extension applies only at least 3 months after the beginning of the one year reference period). The Modernisation Act allows a further increase of the 91 hours’ limit to 130 or 143 hours, subject to following specific procedures determined by Royal Decree, which must guarantee consultation with the employees or their representatives.

Increase of overtime credit

In the past, the employee could ask that 65 hours (possibly increased to 130 hours) of overtime performed, due to an extraordinary increase of work or an unforeseen obligation, would not be taken into account for determining the average weekly working time. Consequently, the employee could claim payment of those hours instead of taking compensatory leave. The Modernisation Act increases those hours to 91 hours. This limit can be further increased to 130 or 143 hours in accordance with a procedure established by Royal Decree.

Automatic amendment of work regulations

Collective bargaining agreements (CBA’s) extending the reference periods as mentioned in article 26bis of the Employment Act and article 11bis of the Act on employment contracts are automatically introduced into work regulations as from their deposit at the Direction for collective labour relations’ registry. Following the specific work regulations amendment procedure will no longer be required. The Royal Decrees determining the procedures for increasing the internal limit or overtime credit can also stipulate that it is not necessary to separately amend work regulations.

2. Innovation premium

The Modernisation Act finally extends the possibility to grant employees a one-time innovation premium until 1 January 2015. The innovation premium is an attractive remuneration tool allowing employees to receive the equivalent of one month salary per year exempt from social security contributions and taxes. The innovation premium can only be granted if the following conditions are met:

1. the premium should be granted for an innovation that yields added value to the employer’s normal activities,
2. the number of employees receiving a premium may not exceed 10 per innovation,
3. a maximum of 10% of employees can receive a premium (3 in companies with less than 30 employees),
4. the amount of premium paid for each employee may not exceed one month’s worth of remuneration per calendar year,
5. the total amount of all innovation premiums cannot exceed 1% of the total salary mass.

A fairly simple procedure needs to be complied with.

3. Exemption to recruit young people

According to the Modernisation Act, employers can be exempt from the obligation to hire young people within the first job contracts framework when, following a CBA, one is subject to an obligation towards a risk population of at least 0.15% of the salary mass.