Belgian companies can be severely affected by the COVID-19 outbreak in several ways:
- The workers might be forced to quarantine themselves.
- The workplace has to close down in order to prevent the further spread of the virus (mandatory or not).
- The majority of the employees become ill.
- The company does not receive enough supplies to continue its production or provision of services.
- The company is experiencing a decrease in turnover because customers are staying away or the company does not receive new orders.
In such cases, the company could get into financial problems if they need to continue to pay the employees, while experience a steep decline in turnover. Such a financial shock can be partly absorbed by the system of temporary unemployment. Belgium has several systems of temporary unemployment, which are supervised by the National Employment Office (RVA / ONEM). The two relevant systems are:
- temporary unemployment because of force majeure; and
- temporary unemployment because of economic reasons.
TEMPORARY UNEMPLOYMENT BECAUSE OF FORCE MAJEURE
In this case, the employer must submit a file at the National Employment Office (RVA/ONEM) to prove the situation of force majeure: i.e. the fact that the consequences of the coronavirus render the company temporarily unable to employ his employees. The Belgian Minister of Work Nathalie Muylle has already declared on 6 February 2020, that the Coronavirus can form a justified reason for temporary unemployment. In this case, the employer no longer needs to pay the wages of the employees and the National Employment Office will pay unemployment benefits of around 70% to the employees.
The following instances can be qualified as force majeure:
- For workers whose company is forced to close by the government (e.g. the mandatory closing of all bars, restaurants, clubs and non-essential stores).
- for workers who cannot be employed due to the abolition of events, cultural activities, sports activities, closure of cinemas, etc.
- for workers whose company must close down the workplace in order to stop the spread of the virus (e.g. in case employees got contaminated)
- For workers who are forced in quarantine in another country which makes it impossible for him to work.
- For workers from suppliers of companies affected by an imposed closure, to the extent that this renders them unable to work at all.
- For workers of Belgian companies affected by the effects of the Corona virus in other areas – for example, because they are dependent on suppliers from the affected region, if, as a result of production stoppages, it is no longer possible for the company to continue to employ staff.
The National Employment Office has announced on 17/03/2020 that it will extend the scope of force majeure to companies that voluntarily close down (although this would not constitute force majeure under normal circumstances).
2. Partial closure
The National Employment Office also accepts temporary unemployment when the workplace only needs to close down during or a limited part of the week (e.g. weekend), for those days of mandatory closure). This was confirmed in a communication of 15 March 2020 by the National Employment Office: “For those businesses where only partial closure is imposed (e.g. retail sector) or which, despite the compulsory closure, are still able to offer limited services (e.g. a catering service or room service in a hotel whose restaurant is compulsorily closed), temporary unemployment for reasons of force majeure may also be requested for all days on which the workers cannot be employed (even if, because there is no compulsory closure for the day in question, this would be due to a reduction in the volume of work). Exceptionally, therefore, in this scheme, days of unemployment may alternate with working days.”
3. Not recognised as force majeure
In case the work at the workplace can be replaced by telework, it will not be impossible to employ the employee and it will not constitute a force majeure.
Further, the mere fact that the employee returns from a country affected by the coronavirus, or the mere fact that the employee has come into contact with a person coming from an affected area, without any concrete indications of a risk of infection, cannot be invoked to make this employee temporarily unemployed due to force majeure. The decision not to work may therefore not depend on a unilateral decision taken by the employer or the employee. It follows from this that companies that take ‘preventive’ measures to prevent their employees from becoming infected by the coronavirus cannot apply for temporary unemployment due to force majeure.
Also, employees who, as a result of the suspension of classes in the schools, stay at home to care for their children, cannot for this reason be temporarily unemployed for reasons of force majeure. In principle, the schools remain open and in principle shelter is provided. The crèches also remain open. Only if it is clearly demonstrated that there was no childcare (e.g. the school would be materially incapable of providing it) and the parent has no alternative (no teleworking possible, the partner cannot intervene, only the grandparents or other persons of an advanced age could intervene), temporary unemployment due to force majeure can be claimed.
In case of temporary unemployment due to force majeure, the employee is exempted from waiting time. Therefore, he does not have to prove a number of working days before he is entitled to benefits. The employee receives 65% of his average capped salary (capped at EUR 2,754.76 per month). Until 30 June 2020, the amount of the benefit is temporarily increased to 70% of the average capped salary. A withholding tax on professional income of 26.75% will be deducted from the benefit.
The employer who invokes force majeure must submit an electronic declaration to the National Employment Office of the place of operation as soon as possible. He must mention ‘CORONAVIRUS’ as a reason for force majeure.
An employer who has never used the application system (or any other application on the social security portal) must first register as a user before he can use the application. To do so, it is best for this employer to contact the Eranova service by telephone on 02/511 51 51 (accessible from Monday to Friday, from 7 a.m. to 8 p.m.). If this new user has an eID reader and knows his eID PIN or if he is using the “Itsme” application, access can be granted quickly (10 minutes). If this is not the case and the user wants to work with a user ID and password, he should expect a turnaround time of 10 days.
The employer who does not yet have access to the social security portal can, exceptionally, send the notification by letter (possibly by registered mail) or preferably by e-mail to the unemployment office of the place of business where your company has its registered office.
In addition, the employer who invokes force majeure, must also (preferably the same day as the electronic notification) by post or preferably by e-mail, addressed to the temporary unemployment service of the competent local office of the National Employment Office, submit a file, i.e. a statement with, if necessary, the supporting documents, with a detailed explanation showing that the unemployment was caused by force majeure, caused by the coronavirus. This file does not have to be submitted in the case of an imposed (at least partial) closure by the government. In this case, the employer can fill in “Lock down – sector of activities” in the comment section of the electronic declaration, and this will suffice.
The decision on the temporary unemployment due to force majeure will be taken within three days after receipt of the complete file by the National Employment Office.
Temporary unemployment due to force majeure will be accepted, if applicable, for the duration indicated by the employer, but at the latest until 30/06/2020 (except for the specific situation of the imposed closure until 3/04/2020, which will possibly be extended).
TEMPORARY UNEMPLOYMENT BECAUSE OF ECONOMIC REASONS
The procedure becomes more difficult when the consequences of the virus do not make it impossible to employ the workers (e.g. due to quarantine), but the company is mostly hit by the economic consequences, e.g. because the company is hit by a decrease in its customer base, production, turnover, orders, etc.
In this case, the employers could submit a request for temporary unemployment for his workers due to lack of work, because of economic reasons. The procedure and conditions for this form of unemployment are stricter than for force majeure. Therefore, if possible, it is preferable to submit a request for temporary unemployment because of force majeure.
The difficulty is mostly related to the fact that temporary unemployment because of economic reasons was initially only meant for blue-collar workers. For them, the procedure to submit a request at the National Employment Office is fairly similar to the procedure for temporary unemployment because of force majeure.
However, white-collar workers can only enjoy temporary unemployment because of economic reasons if the company fulfils the preliminary cumulative conditions:
- the company falls within the scope of the Act of 5 December 1968 on collective agreements and joint committees. It therefore mainly concerns companies in the private sector;
- the use of this measure is provided for in a sectoral collective agreement, a company collective agreement or an approved business plan (drawn up by the employer, which provides for the use of the suspension of white-collar workers due to lack of work and which has been approved, within 2 weeks, by a special Commission of the Federal Government Service of Work);
- the company is in difficulty due to a fall of at least 10% in turnover (according to the VAT return), production or orders, or due to a degree of temporary unemployment of at least 10%, or the company is recognised by the Minister of Employment as being in difficulty, on the basis of unforeseen circumstances resulting, in the short term, in a substantial decline in turnover, production or orders.
If the company fulfils the preliminary conditions, it can submit a request for temporary unemployment for its white-collar workers, just like for the blue-collar workers. If not, the company will have to go through the procedure (to be recognised as undertaking in difficulties). During this recognition procedure, an application may be submitted for temporary unemployment due to force majeure provided that the employer demonstrates that he has initiated the prior procedure for recognition as a company in difficulty by sending a copy of the application for recognition to the Minister of Work to the National Employment Office.
The rest of the procedure is mostly similar as for the temporary unemployment because of force majeure. Where the submission forms asks for the economic reasons, the employer must mention ‘CORONAVIRUS’. The Director of the (local office of the) National Employment Office may grant a derogation from the submission deadline if the coronavirus has led to a sudden drop in work.
APPLICATION TO THE PUBLIC SECTOR
Finally, the system of temporary unemployment is only partially applicable to public companies. The force majeure system is applicable for all categories of contractual workers, but the temporary employment because of economic reasons is only open for blue collar workers in the public sector. This is due to the fact that the preliminary conditions to submit a request for temporary unemployment because of economic reasons for white-collar workers requires the company to fall within the scope of the Act of 5 December 1968 (see above). Except in specific cases, the public sector (including the majority of the public companies), does not fall under the scope of this act.
Furthermore, civil servants do not fall under the scope of the system (neither force majeure, nor economic reasons).
NOTE: This publication may not deal with every topic within its scope nor cover every aspect of the topics with which it deals. It is not designed to provide legal or other advice with regard to any specific case. Nothing stated in this document should be treated as an authoritative statement of the law on any particular aspect or in any specific case. Action should not be taken on this document alone. For specific advice, please contact a lawyer of our firm. The content is based on the law as of 17/03/2020.
For more information please contact Joseph Granato, Communications Manager at L&E Global at email@example.com.