When working on Belgian territory, whether on a long-term or occasional basis, a foreign employee will be entitled to the labour, salary and employment conditions that are “generally binding” under Belgium law, administrative provisions or collective agreements and whose violation is a criminal offence.
The generally binding provisions cover most of the Belgian employment rules and, in particular, the regulations regarding remuneration, bank holidays, well-being of employees, work duration and the status of sales representatives. As mentioned before, these rules apply regardless the duration and the scope of the activities of the employee on Belgian territory. Termination rules will not apply to employees who are only temporarily or occasionally working in Belgium. However, once an employee’s activities on Belgium territory are considered “substantial”, the termination provisions will apply.
What are the key employment law considerations in Belgium?
Employed v self-employed status
It is important for a company to identify at the outset whether a worker is employed or self-employed. Employment status affects not only the employer’s obligations and liabilities but also the tax and national insurance payable. For example, only employees have statutory claims upon dismissal.
Various factors are relevant in determining whether or not an individual is employed or self-employed. As a general rule, the greater the degree of control exercised by the company and the higher the risk run by the company, the more likely it is that the worker will be deemed to be an employee of the company. No single factor is conclusive in determining whether a worker is employed or self-employed. Employers must look past the label the parties have given the arrangement and assess the reality of the working relationship as the overriding factor in determining employment status.
“Obviously unreasonable” dismissal
Termination of employment can be deemed “obviously unreasonable” under Belgium law. This will be the case where termination: (i) is not linked to the performance or the behavior of the employee; or (ii) to the organizational needs of the company; and (iii) would never have been decided by a normal and prudent employer.
On termination, employees are entitled to know the grounds of their dismissal. If they are considered obviously unreasonable, the employee will be entitled to an indemnity between 3 and 17 weeks’ salary. For this reason, we recommend that employers keep written records of the performance of their employees and carry out regular performance reviews so any performance problems are clearly in evidence. This will greatly assist in defending any allegation of unreasonable termination on dismissal.
Important provisions applying to sales representatives
An employee who is mainly in charge of prospecting and visiting clients in order to negotiate and close contracts on behalf of the employer, will automatically, and by operation of law, be treated as a “sales representative”. This has a significant impact on the employment law entitlements of the employee, including on their variable pay. Any variable pay paid to a sales representative that is linked to the sales or turnover made by the sales representative himself/herself, will be considered a commission. Commission is payable on each order by a client that has been accepted by the employer, even if the order is not ultimately fulfilled. Furthermore, a sales representative is entitled to commission on orders placed during a suspension or after termination and the employer must share monthly updates and documents regarding the commissions earned in the preceding month. On termination of employment, a sales representative who has increased the client base of the employer is entitled to a client indemnity, being a statutory indemnity that indemnifies the sales representative for the loss of the client base he developed and that is calculated on basis of the sales representative’s seniority.
Due to the specific provisions applying to sales representatives, we recommend that employers include suitable provisions in their employment contracts to reflect these rights and obligations.