No retroactive suspension of notice period due to COVID-19 temporary unemployment

Introduction
Background
Parliamentary decisions
Example situation​

Introduction

Until now, there has been no suspension of the notice period served on employees who have been made temporarily unemployed under the specific 'COVID-19 regime'. Such notice period started during the period of COVID-19 temporary unemployment and continued to run during this period. As employers could dismiss employees 'cheaply', a draft bill to suspend the notice period in the event of COVID-19 temporary unemployment was submitted to Parliament. However, the draft bill was criticised as it provided for a retroactive application of this new rule. After a review by the Council of State, which stated that the law cannot have retroactive effect, the Chamber of Representatives has now voted to introduce the law without retroactive effect. However, the new law does apply to notice periods served after 1 March 2020 for periods of COVID-19 temporary unemployment that fall after the law's entry into force.

Background

If an employment relationship is terminated through the serving of a notice period, such a notice period will be suspended only in those situations expressly provided for by law. This was and is the case for temporary unemployment for economic reasons; therefore, the notice period of a worker in economic unemployment does not run during this period and is extended by the duration of the temporary unemployment.

The law did and does not provide for any exception for the following; thus, a notice period is not suspended where it is served:

• during a period of temporary unemployment for force majeure; or
• before a period of temporary unemployment for force majeure which continues during such a period.

As a result, many employers that placed employees on temporary unemployment for force majeure using the simplified COVID-19 procedure and served notice on employees during this period rightly assumed that this notice period simply continued during the period of temporary unemployment.

Parliamentary decisions

However, several political parties observed that by doing so, companies passed on part of their dismissal costs to the social security system. Therefore, a draft bill was submitted to Parliament providing for a suspension of the notice period in the case of COVID-19 temporary unemployment.

However, this bill provided not only for a suspension as from its entry into force, but also for ongoing notice periods served since 1 March 2020 that would be effective retroactively during all periods of COVID-19 temporary unemployment as from 1 March 2020.

As such, many employers worried that they would have to pay (or have their workers perform) the full notice period after the end of the temporary unemployment.

The legislative proposal received majority support from the Parliamentary Committee on Social Affairs but was sent to the Council of State for its consideration during the plenary session in Parliament.

The Council of State issued an opinion stipulating that a retroactive application can be justified only if it is indispensable for achieving a general interest objective, which was not the case here. Thus, any retroactive effect in the proposed bill had to be abandoned.

The Chamber of Representatives, in a plenary session, followed this opinion and voted to introduce the bill without the previously proposed retroactivity.

Specifically, this means the following for employers:

• For notice periods served after 22 June 2020 (ie, the date of the law's publication in the Official Gazette), there is a full suspension of the notice period during all periods of temporary unemployment under the COVID-19 regime.
• For notice periods served before 1 March 2020, there is no suspension of the notice period; it continues to run.
• For notice periods served after 1 March 2020 that are still ongoing, they will be suspended only by periods of COVID-19 temporary unemployment as from 22 June 2020 (ie, as from the date of the law's publication in the Official Gazette). Thus:
  • for the part of the notice period that has already expired, there is no suspension (and therefore no retroactivity); and
  • for the part of the notice period that still runs after publication of the new law in the Official Gazette, there is suspension.

Example situation

On 23 March 2020 an employer terminated an employment relationship by serving 18 weeks' notice. The employee has been in temporary unemployment following the simplified COVID-19 procedure since the beginning of the notice period and will continue as such for the coming weeks. On 22 June 2020 (ie, the date of publication of the new law in the Official Gazette), the employee's notice period has run for 13 weeks. Thus, during these first 13 weeks, the notice period will not have been suspended.

However, for the remaining five weeks of the notice period, the notice period will be suspended and the employer must either ensure that these remaining five weeks are performed or pay this period as severance pay.

For further information on this topic please contact Phillipe De Wulf or Esther Soetens at ALTIUS by telephone (+32 2 426 1414) or email (philippe.dewulf@altius.com or esther.soetens@altius.com). The ALTIUS website can be accessed at www.altius.com.