The Crisis Employment (Miscellaneous Provisions) Act was published today (25 June – see link below) in the official gazette. It offers companies three measures for temporarily adjusting the volume of work carried out in their business.

The first is a temporary collective reduction in working time by one quarter or one fifth. The measure can be implemented in all companies that need to do so, for all employees or for one or more categories of workers. To implement the measure a Collective Bargaining Agreement (CBA) has to be signed within the company in question for a fixed period. The terms applicable to the CBA will be set out in a royal decree to be issued in the next few days.

Employers introducing the measure will save the difference between wages corresponding to the work schedule in effect within the business before the reduction, and the lower wages paid as a result of the reduction in working time. In addition, employers qualify for a lump sum reduction in their social security contributions of EUR 600 (based on a 1/5 reduction) or EUR 750 (based on a 1/4 reduction) per quarter. These amounts rise by EUR 400 if the reduction is combined with implementation of a 4-day week. However, at least 75% of these reduced contributions must be paid out to the workers affected to offset the wage loss. This compensation will be treated as ordinary pay.

Employees whose schedule is reduced under this measure continue to qualify as full-time workers.

The other two measures are a temporary individual reduction in work (crisis time credit) and a system of full or partial suspension of work of white-collar workers (chômage économique des employés – economische werkloosheid voor bedienden). These two measures can only be implemented by companies in difficulties operating in a sector that has previously signed a sector-wide CBA to govern these measures, or, in the absence of sector-wide CBA concluded before 3 July 2009, by companies in difficulties that have concluded a company specific CBA covering the same subject matter (in the case of companies with trade union representation) or a restructuring plan approved by an ad hoc commission within the Federal Public Service for Employment (in the case of companies without trade union representation or in which CBA negotiations prove fruitless).

A company is in difficulties if it can demonstrate (by submitting a special application) that its turnover or production fell by 20% or more in one of the 4 quarters preceding its implementation of the measure compared to the same quarter in the previous year (this condition must be tested at the level of the legal entity), or that it will be forced to implement temporary unemployment for its manual workers at a rate of 20% or more of the total number of days reported to the NSSO during the quarter preceding the application (this condition is tested at the level of the legal entity or TBU). A criterion linked to a fall in orders could be introduced by a future Royal Decree.

Crisis time credit allows a company in difficulties to enter into individual agreements with workers aimed at reducing their working time by 1/5 or 1/2 for a period of one to six months. The period of reduced work must be observed on average over the agreed reference period.

The salaries of the employees affected are reduced proportionally and the employer is not obliged to offset the loss in pay. The employee qualifies as a part-time worker, which means in particular that, as the law currently stands, the employer will have to pay leave holiday pay to the workers affected in December 2009, which has an impact on liquidity. The employee is entitled to additional unemployment benefit (even if he does not fulfil the “regular” time credit requirements); the amount varies in function of the percentage of work reduction and the age of the employee.

Full or partial suspension of work of white-collar workers in times of crisis allows the employer temporarily to fully suspend (for a maximum of 16 weeks per calendar year, which may be consecutive) or partially suspend (for at least two days a week for no more than 26 weeks) the execution of the employment contracts applicable to his white-collar workers. The employee will receive unemployment benefit (equal to 70% or 75% of capped salary) and, in companies that apply a supplementary compensation scheme for manual workers, affected employees will also receive an additional payment from the employer. No individual agreement is required from employees whose contracts are suspended in this way.

The law comes into force today (25 June) and remains in force until 31 December 2009, subject to possible extension until 30 June 2010.

Official Gazette http://news.hrservices.be