Belgian law updates December 2014: data protection, IP, employment, commercial and company law

Written on 9 Dec 2014

In this issue:

Data protection and IP update:

  • Adoption of EU data protection regulation likely in 2015
  • Amendment of the Belgian Data Protection Act 
  • Book XI of the Belgian code of economic law

Employment law update:

  • Termination of part-time employees
  • Look forward: Michel I
  • Social elections in May 2016

Commercial law update:

  • Security interests, pledges and mortgages (not yet) on the move…
  • EU Directive on antitrust damages actions

Company law update:

  • Publication of non-financial information
  • Next step in the abolishment of bearer securities
  • Special directors’ liability for payroll taxes and VAT 

Data protection and IP update

Data protection

According to EU officials, discussions on the draft data protection regulation are coming along nicely in the EU Council and will hopefully culminate in the draft’s adoption by the EU in 2015. However before that time, certain hurdles such as the ‘one-stop-shop’ principle must still be overcome. 

Across the pond, the Safe Harbour regime is still not in the clear, despite good progress reportedly being made by the US on implementing the 13 recommendations put forward by the EU Commission. During the IAPP annual data protection conference in Brussels, Article 29 Working Party (A 29 WP) Chairwoman Isabelle Falque-Pierrotin warned that “DPAs are expecting real answers. We will be very vigilant.” In addition to monitoring progress on the Safe Harbour reform, the A 29 WP adopted an opinion on the Internet of Things, offering a set of practical recommendations to stakeholders on how to implement a sustainable IoT which complies with the data protection legal framework. 

On 26 November 2014, the A 29 WP also adopted guidelines on the implementation of the Court of Justice of the European Union Judgement on Google Spain and Inc. v. Agencia Espanola de proteccion de datos (AEPD) and Mario Costeja Gonzalez C-131/12.

In Belgium a draft bill regarding the amendment of the Belgian Data Protection Act in line with the draft data protection regulation was introduced during the plenary session of 7 October 2014 in the Chamber of Representatives. The Belgian Data Privacy Commission is also expected to publish its guidelines regarding the use of cookies under Belgian law before the end of this year, following a public consultation round with all the stakeholders involved. 

These and other recent developments in DP law will be further discussed in our DP newsletter, coming in January. Should you wish to receive more information in the meantime, please contact Ann-Sophie De Graeve.

IP

On 1 January 2015, Book XI of the Belgian code of economic law, titled ‘Intellectual Property’, will enter into force. This book introduces several changes to the Belgian patent and copyright laws, reflecting recent amendments in EU law (e.g. introduction of the concept of the unitary patent protection system and court), implementing already existing EU directives (e.g. extension of the term of protection for fixations of performances and for phonograms from 50 to 70 years after the relevant event), or providing further clarification on already existing provisions in Belgian law. 

Another noteworthy development concerns the ‘Fast Track’ application process for Community trademarks, introduced by the Office for Harmonization in the Internal Market on 24 November 2014, which will allow for certain trade mark applications to be processed much faster than under the current examination system. 

These and other recent developments in IP law will be further discussed in our IP newsletter, coming later this month.

Employment law update

Termination of part-time employees

In a case relating to the calculation of the indemnity in lieu of notice with part-time employment, the Belgian Constitutional Court (16 October 2014, nr. 152/2014) ruled that is not discriminatory for the employer to calculate the indemnity in lieu of notice on the basis of the salary at the time of termination instead of the salary the employee would have received if she had worked full-time. In this case, the employee originally worked full-time until her contract was suspended for incapacity of work. At the employee’s request, she restarted working on a part-time basis. When the employee restarted, parties did not sign an addendum to the employment contract.

We remind you that when an employee has reduced her/his employment rate in the framework of a career break (CBA nr. 103), the indemnity in lieu of notice must also be calculated on the basis of the part-time salary. However, the European Court of Justice ruled that when a part-time employment contract under parental leave (RD of 1997) is terminated, the indemnity in lieu of notice must be calculated on the basis of the (hypothetical) full-time salary. 

Face forward: Michel I

It has been a while, but for a couple of months Belgium has again a pro-business government. The measures proposed regarding labour law and social security clearly strive to achieve growth and competitiveness. The measures concern among others, the decrease of the social security rate, measures to eliminate the wage handicap, making working time more flexible, and activation of the elder workforce. For an overview of the measures that could affect your business, please click here.

Social elections in May 2016

Social elections will be held in May 2016 in all Belgian companies employing over 50 employees. During these elections, employees may choose their representatives for the works council (in companies with 100 employees or more) and/or the health and safety committee (in companies with 50 employees or more). These elections seem further away than they actually are, but these employee thresholds are calculated in average over the four quarters of 2015. The administrative procedure (to be initiated and carried on by the employer) will start in December 2015.

For more information on this employment law update, please contact Thierry Viérin or Johanna Van Herreweghen.

Commercial law update

Security interests, pledges and mortgages (not yet) on the move …

The Belgian law of 2 August 2013, which will implement significant changes to the current Belgian system of security interests and mortgages, was supposed to enter into force on 1 December 2014 at the latest. However, the timely preparation of the electronic national register of pledges failed. As a result, the effective date of the law has now been postponed until 1 January 2017. When the law enters into force in 2017 it will create a formal security system for all holders of security interests/mortgages, based on a publication in the (still to be developed) national register of pledges. This will create an opposability vis-à-vis third parties. The law could, however, affect already existing security interests on commercial and agricultural businesses (“pand op de handelszaak” / “gage sur fonds de commerce” / “landbouwvoorrechten” / “privilèges agricoles”). These existing security interests may lose their opposability if no timely registration in the national register of pledges is done.

EU Directive on antitrust damages actions

The EU Directive on antitrust damages actions was signed into law on 26 November 2014. EU Member States have two years to transpose the Directive into national law. Under the new Directive individuals and legal entities can claim compensation for damages suffered as a consequence of competition infringements. The burden of proof to be provided by the party suffering the damages has been significantly reduced: it is easier to gain access to evidence and the final decision of a national competition authority constitutes evidence of an infringement and a subsequent fault. Claims for damages become time-barred after five years. This period is suspended as of the date when a competition authority launches an investigation into a possible infringement. The suspension period continues until at least one year after the final decision concerning the infringement has been adopted. In accordance with the Directive, the infringer can however invoke (bearing the burden of proof) that the claimant passed on the overcharge resulting from the infringement in whole or in part to its purchasers. We will continue monitoring the implementation of the new Directive under Belgian law.

For more information on this commercial law update, please contact Stefan DeswertYves Stans.

Company law update

Publication of non-financial information

Under new EU Directive 2014/95/EU large (+500 employees) listed companies, credit institutions and insurance companies will be required to include additional non-financial information and information regarding diversity in their annual board report as of 2017. This non-financial information should at least include environmental, social and employment matters, respect for human rights and anti-corruption and anti-bribery matters. Should a company not have a policy regarding one or more of these matters, this needs to be justified. Large listed companies will also be obliged to describe their diversity policy in the corporate governance statement in their annual report.

Next step in the abolishment of bearer securities

As of 1 January 2014, bearer securities for which the owner had not requested the conversion were automatically converted into dematerialised or registered form. The registration was taken in the name of the issuer. As of 1 January 2015, such securities that have not been claimed by their owner and that are admitted to trading on a regulated market will need to be sold by the issuer on the regulated market. If the securities are not admitted to trading on a regulated market, the issuer will need to organise a public auction. It was, however, unclear whether this obligation to sell securities applies to both expired and the non-expired securities. The Minister of Finance has now clarified that the sale is only required for non-expired securities. 

Special directors’ liability for payroll taxes and VAT

Directors who are entrusted with the daily management of a company can be held jointly and severally liable for the failure by the company to pay its payroll taxes and VAT. In two recent decisions, the Supreme Court of Belgium gave further guidance on the implementation of this special directors’ liability regime. The Supreme Court confirmed the principle of joint and several liability whereby not only the company but also the relevant directors become directly liable for the payment of the outstanding taxes. The Supreme Court also clarified that this special directors’ liability regime does not prevent the tax authorities from holding the directors liable for the outstanding payroll taxes and VAT on the basis of other legal grounds (e.g., art. 1382 Civil Code or other special liability regimes under the company law, the insolvency law or tax laws).

For more information on this company law update, please contact David Haex.