Belgium’s implementation of the new EU Posted Workers Directive: What is the impact for employers posting workers to Belgium?
With the Act of 12 June 2020, Belgium is implementing EU Directive 2018/957 amending Directive 96/71/EC on the posting of workers, by providing, amongst others things, adjustments to the Act of 5 March 2002 relating to labour, salary and employment conditions when posting workers to Belgium (“Posting Act”). The Act of 12 June 2020 comes into effect on 30 July 2020. We summarise the key changes and some points for attention in the overview below.
1. The main principle remains unchanged: Belgium’s hard-core employment legislation immediately applies when posting workers to Belgium
- Immediate application of Belgium’s hard-core employment legislation
An employer posting workers to Belgium must at least comply with the labour, salary and employment conditions provided for by the Belgian statutory provisions that are criminally enforced, as well as those CBAs that are declared generally binding by royal decree. Foreign employers posting workers to Belgium immediately must, amongst others, comply with the following “first layer” legal acts and their implementing royal decrees:
- The Labour Act of 16 March 1971, which includes stringent provisions on working time;
- The Public Holidays Act of 4 January 1974;
- The Coordinated Vacation Act of 28 June 1971;
- The Act relating to temporary employment, interim work and putting employees at the disposal of 24 July 1987;
- The Act of 4 August 1996 relating to the well-being of employees;
- The Salary Protection Act of 12 April 1965;
- The Anti-Racism Act of 30 July 1981;
- The various Anti-Discrimination Acts of 10 May 2007;
- National and sector level collective bargaining agreements that are declared generally binding.
These labour, salary and employment conditions apply as from the first day of a worker’s posting on Belgian territory and overrule any choice of law clause that may be included in an employment contract (and that would provide for less favourable conditions).
This principle was already laid down in the previous version of the Posting Act and, beside some textual changes, remains fully in effect.
- Supplementary pension schemes are out of scope
The Act of 12 June 2020 clarifies that company level or sector level extra-legal pension schemes, even if captured in a CBA that is declared generally binding, are excluded from the hard-core Belgian employment legislation.
- Allowances or reimbursement of expenditure to cover travel, board and lodging expenses
Furthermore, it is specified that a foreign employer must comply with sector level collective bargaining agreements that are declared generally binding, while providing for certain allowances or reimbursement formulas to cover travel, board and lodging expenses for a posted worker’s travel within Belgium (e.g. a posted worker who has to travel from a working site in Brussels to a working site in Antwerp) or abroad (e.g. a posted worker who has to travel from a working site in Antwerp to a working site in Rotterdam).
2. What is new: a “second layer” of Belgian employment provisions kicks-in from the moment the posting period exceeds 12 months
Once a posting period exceeds 12 months, an employer must comply with any and all Belgian labour, salary and employment conditions provided for by Belgian statutory provisions even if not criminally enforced, as well as any CBA’s that are declared generally binding by royal decree.
The practical impact of this new rule for foreign employers posting workers to Belgium will be limited as almost the entire set of Belgian employment legislation is criminally enforced and hence already falls under the first layer, which immediately applies (and which was already the case prior to the Act of 12 June 2020’s entry into force). An example of such a second layer rule is a posted worker’s entitlement to guaranteed salary in case of sickness.
An important correction to note is that termination rules are explicitly excluded in this second layer. Consequently, a posted worker will not benefit from the Belgian termination rules based on the Posting Act if a posting period exceeds 12 months (however, the Belgian termination rules may still become applicable based on the Rome I-EU Regulation). The same goes concerning the procedures, formalities and conditions regarding the conclusion (and termination) of employment contracts, including the provisions regarding a post-termination non-compete undertaking. For example, the restrictive Belgian rules on fixed term employment contracts and their renewal do not automatically apply if the posting exceeds 12 months.
Employers falling under the scope of the transportation sector are temporarily excluded from this second layer-principle.
In addition, the following clarifications are useful:
- The Act of 12 June 2020 becomes effective on 30 July 2020 and immediately intervenes in pending posting periods. For example, if a posting period on 30 July 2020 exists for 11 months and continues to be in force, then the second layer already becomes effective on 1 September 2020;
- If several posted workers replace each other to perform the same work at the same location, then the total duration of activity of such a ‘chain’ of posted workers will be taken into account to determine when the 12 month period is reached. This clarification was added to avoid employers simply escaping from the application of the second layer by replacing posted workers with others before the expiry of the 12 month period.
- The 12 month period can be extended by another 6 month period provided the posting employer sends a reasoned notification to the designated officers. The exact modalities still need to be determined by royal decree.
3. What is new: allowances that cannot directly be linked to the posting qualify as cost reimbursements
Allowances specific to posting often serve several purposes. To the extent that their purpose is the reimbursement of expenditure incurred on account of the posting, such as expenditure on travel, board and lodging, they should not be considered to be part of remuneration.
If there is any uncertainty as to whether such allowances are part of the posted workers remuneration, then such allowances will be considered to be paid as a reimbursement of expenditure and so will not be taken into account to verify whether the Belgian salary conditions are met.
ALTIUS’ employment team is available to assist foreign employers considering posting workers to Belgium, including providing practical advice on the applicable working and employment conditions taking into account the Posting Act’s requirements. Furthermore, the ALTIUS’ employment team can provide further guidance regarding any additional employment related formalities, registrations and obligations triggered by a posting set-up.
The recent tax and social security reforms on copyright income: what employers need to know
Following an intense debate, the legislator introduced a new tax scheme applicable to copyright income. Main raison for this initiative is the assumed abuse of the until then beneficial tax regime. Under the amended tax rules, employees still qualify for the special tax scheme, but with a stricter legal framework.Read on
Belgium confirms its adoption of the Framework Agreement on Cross-border Telework
Given the upcoming transition period expiry on 30 June 2023, the long-awaited Framework Agreement on Cross-border Telework was recently published.Read on
WEBINAR VIDEO | The N°1, healthy, rich in learning webinar about claims
During this session, Mathieu Maniet, François Lambert and Karel Martens discuss the rules for No. 1 claims, cosmetic claims and health and nutrition claims, and give you an overview of the most important issues as well as practical guidelines.Read on