Attention points for retail sector employers considering dismissing employees for economic or technical reasons

Attention points for retail sector employers considering dismissing employees for economic or technical reasons
November 17, 2020

As the retail sector is one of the sectors most affected by the Covid-19 pandemic, employers within it might be considering dismissing employees for economic or technical reasons. Are you an employer within the retail sector? Then you should be aware that, in most Joint Committees belonging to the retail sector, Collective Bargaining Agreements have been entered into obliging the employer to first take measures to avoid dismissals and, if dismissals cannot be avoided, then to comply with a specific procedure. We have listed below the most important points for your attention.

Which Joint Committees are concerned?

The 5 most important retail-specific Joint Committees, are the following:

Joint Committee 201 for white-collar employees within small retail companies (< 50 employees)
Joint Committee 202 for white-collar employees within food retail companies
Joint Committee 202.01 for white collar employees within medium-sized food companies
Joint Committee 311 for blue- and white-collar employees within large retail companies (> 50 employees)
Joint Committee 312 for blue- and white-collar employees within supermarkets

Within three of these Joint Committees, namely Joint Committees 202, 311 and 312, a collective bargaining agreement (“CBA”) has been entered into that provides for additional obligations and specific procedures to be complied with by employers relating to these Joint Committees in the case of anticipated dismissals for economic or technical reasons. Employers within Joint Committees 201 and 202.01 do not have to comply with any additional sector-specific requirements.

This article focuses on the sector-specific procedures in the case of dismissals for economic reasons that come on top of any general obligations under national law. We will not discuss other dismissal procedures within the concerned Joint Committees, e.g. in the case of a dismissal for serious cause or a dismissal for professional incompetence.

Joint Committee 202 for food retail companies

Within Joint Committee 202, a CBA on this topic was concluded on 19 February 2014. This CBA does not apply to the medium-sized food companies of JC 202.01. Its key points are:

  • In the case of negative economic circumstances, the employer is obliged to first look for alternatives to avoid collective dismissals (e.g. investigate the possibility of relocating employees or the introduction of a system of unemployment benefits with a company top-up (‘bridging pension’), etc.).
  • In the event of dismissals as a result of economic circumstances, an order of priority must be respected, which takes the following criteria into account: competence, merit, specialisation, age, length of service, and family burden. In the event of re-employment, priority must be given to the redundant employees in reverse order to that in which they were dismissed.
  • In addition, the employer must adopt all useful measures to safeguard the employment of the remaining employees (e.g. by discontinuing new recruitment within the affected services, by transferring employees to other entities/departments (instead of hiring external employees for these departments), by informing employees of vacant positions, by setting-up an employment plan, by negotiating an early retirement regime or by providing cycles of training).
  • In the case of the closure of a branch, the employer must try to redeploy the employees within the legal entity (e.g. in another branch). If this redeployment is not possible, then the employees will receive an additional indemnity equal to one month’s salary, which cannot be accumulated with a possible closure indemnity.
  • In the case of a closure of an undertaking or a division:
    • the representative employee organisations must be consulted;
    • the employer must inform the Works Council (or failing that the trade union delegation), the employees and the President of the Joint Committee six months prior to the closure;
    • the Joint Committee will investigate the options to facilitate the redeployment of the affected employees within the same sector or the same region.

Joint Committee 311 for large retail companies

Within Joint Committee 311, a CBA including a specific dismissal procedure is entered into every two years. The most recent one is the CBA of 23 September 2019. This CBA entered into effect on 1 January 2020 and expires on 31 December 2021. Its key points are:

  • In the case of a collective dismissal, the employer must:
    • inform the Works Council, or failing that the Committee for Prevention and Protection at Work, or failing that, the trade union delegation;
    • discuss the dismissal criteria with one of these bodies.

If these obligations are not complied with, then the employees concerned after their dismissal will be re-integrated in the company.

  • In the case of dismissals due to economic or technical reasons that do not qualify as a collective dismissal:
    • The employer must try to avoid redundancies (e.g. by investigating the possible transfer of employees, by implementing a system of unemployment benefits with a company top-up (‘bridging pension’), etc.).
    • The employer that is forced to reduce its workforce for technical or economic reasons must take all necessary measures to safeguard the remaining employees’ jobs. The CBA provides specific obligations in this regard (e.g. by discontinuing new recruitment, transferring employees to other entities/departments, informing employees of vacant positions, dividing available work between the employees through the introduction of temporary unemployment, negotiating an early retirement regime, providing training cycles, avoiding the systematic use of overtime and interim workers, etc.). The employer should again rely on the Works Council, or failing that the trade union, to investigate and implement these measures.
    • If dismissals cannot be avoided, then the employer must respect a certain order of priority for such dismissals, based on certain criteria (such as age, the length of service, and the level of specialisation).

For the measures above, the employer must inform and consult with the Works Council or, failing that, the trade union delegation.

  • If the employer wants to recruit new employees, then a specific priority must be given to candidates within the sector who have been the victim of a collective dismissal or the closure of an undertaking.

Joint Committee 312 for supermarkets

Finally, also in Joint Committee 312, a CBA on this topic was concluded on 19 February 2014. The key points of this CBA are:

  • The CBA provides that the employer is obliged to provide occasional information if, for unforeseeable economic or technical reasons, it is necessary to make staff reductions. This information must be announced as soon as possible and, in any event, before the decision will be taken. This announcement must be made in writing to the Works Council and the national secretaries of the representative employee organisations that signed the CBA.
  • The employer who is forced to reduce its workforce for economic or technical reasons must take all useful measures to safeguard the employment of its remaining employees by, among other things, discontinuing new recruitment, transferring employees to other entities/departments, informing them about vacant positions, setting-up an employment plan, organising training cycles, negotiating early retirement regimes and by informing the national secretaries of the representative employee organisations, the regional ‘intercompany’ committee (if such a body exists) and the Association of the large distribution companies in Belgium if certain employment issues cannot be resolved at the company-level.
  • The employer can only consider a permanent exploitation by third parties (e.g. a take-over) in exceptional circumstances, taking into account the specificities of the services concerned and after consultation with the trade union organisations.

Written by

  • Annabel Coopman

    Associate

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