Changes to notice periods

New legislation (Law of 20 March 2023) entered into force on October 28th, 2023, which implemented changes to the applicable notice periods in certain cases.

Prior situation

Effective as of January 1st, 2014, the Unified Employment Status Act introduced a new calculation method of the notice period in case of dismissal, meant to eliminate the distinctions between blue-collar and white-collar workers with regard to the duration of the applicable notice period.

To account for existing contracts, a transitional regime was created for employees who have an employment contract that started before January 1st, 2014. For those employees, two calculations need to be made:

1. a calculation based on the seniority acquired on December 31st, 2013, taking into account the legal, regulatory and conventional rules in force on December 31st, 2013; and
2. a calculation based on the seniority acquired as of January 1st, 2014 based on the new rules.

In general, the total notice period is the sum of these two calculations (with certain nuances, depending on the full context).

Despite the intention to simplify the notice periods, the application of the legislation still left room for discussion in certain situations. The new law seeks to further resolve these situations.

Despite the intention to simplify the notice periods, the application of the legislation still left room for discussion in certain situations. The new law seeks to further resolve these situations.
 

Going forward

The new Law of 20 March 2023 entered into force on October 28th, 2023 and will only impact terminations as of October 28th, 2023. A notice of termination served prior to this date, will still be subject to the ‘old’ rules. The changes in the legislation apply to Belgian employment contracts, so also to, for example, expats inbound to Belgium who have a localized Belgian contract.

The following changes are included in the new Law: 

a) Notice given by the employee: only ‘new’ rules to be applied

The first change implemented by the Law of 20 March 2023 is that the notice period in case of notice given by the employee should be calculated based solely on the ‘new’ rules implemented by the Unified Employment Status Act.

As a result, it is no longer necessary to make two calculations in case of notice given by the employee.

This change tackles the fact that there could be a difference in treatment for employees who reached the maximum notice period in the first calculation, and those who didn’t, depending on their salary level on December 31st, 2013.

Furthermore, this legislative change brings also legal clarity for blue-collar workers, for whom it was not clear if their notice periods should be capped at 13 weeks in case they gave notice to their employer. The 13 weeks cap is applicable for all employees who give notice to terminate their employment agreement.

As such, as of October 28th, 2023, for all employees with a seniority in excess of 8 years, the notice period in case of notice given by the employee will amount to 13 weeks.

b) Notice given by the employer: conventional clauses related to the notice period

The new law also eliminates the discussion around the validity of termination clauses for white collar workers with a salary in excess of 32.254 EUR on December 31st, 2013. These are now explicitly included in the law as to be taken into account in deviation of the statutory notice periods in relation to the calculation of the notice periods for seniority until December 31st, 2013.

Initially, the legislator also accidentally deleted the article in the Unified Employment Status Act in which the notice periods to be taken into account for white-collar workers with a yearly gross salary above 32.254 EUR on December 31st, 2013 were stipulated. This implied that also for white-collar workers with a yearly gross salary above 32.254 EUR on December 31st, 2013, the first part of the notice period should be calculated based on the legal, regulatory and conventional rules in force on December 31st, 2013. This would effectively have reintroduced the need for the infamous “Claeys formula”.

This unintended change has now been rectified and will enter into force on the same date as the original Law of 20 March 2023. The article that was accidentally deleted by the Law of 20 March 2023 has been reinstated, and additionally it has been altered to confirm that conventional clauses may be taken into account in case of dismissal by the employer for white-collar workers with a yearly gross salary above 32.254 EUR on December 31st, 2013.
 

Key take-aways

The key elements to remember for companies are:

1. As of October 28th, 2023, the notice period for an employee who gives notice will only be calculated based on the new rules for notice periods, which dictate that the notice period cannot exceed 13 weeks. A maximum notice period in case notice is given by the employee is therefore now in place for all employees;
2. As of October 28th, 2023, the Unified Employment Status Act explicitly allows that conventional clauses are taken into account for white-collar workers with a yearly gross salary above 32.254 EUR on December 31st, 2013 in case of dismissal by the employer.

In case of any questions in that regard, or if any assistance is required with the calculation of a notice period (or a severance payment without performance of a notice period), we are happy to assist. In this regard, please contact one of your trusted EY advisors, or contact us via the contact form.