1 – Tightening the law on loans of staff
The Act of 24 July 1987 on temporary work, outplacement and the lending of staff in favour of users lays down a fundamental prohibition against loans of staff that are accompanied by a transfer of employer authority to a user.
The Act of 12 August 2000 on social, budget and other provisions relaxed this basic prohibition by saying that there is no proscribed loan of staff in cases where:
- the user complies with the obligations incumbent on him relative to welfare at work
- the instructions given by the user in execution of the agreement with the employer affect working time and rest periods or performance of the work.
The Programme Act now partly reverses this relaxation for loans of staff.
There are no changes regarding instructions concerning welfare at work obligations.
The user’s ability to give instructions in pursuance of the agreement with the employer is subject to a number of additional conditions, however.
The instructions the user gives to the employer’s staff will not be deemed to constitute exercise of any part of the employer’s authority if the following cumulative conditions are met:
- The instructions are given pursuant to a written agreement between the user and the employer in which it is expressly set down in detail what instructions the user can exactly give to the employer’s staff
- The user’s right to give instructions does not in any way render the employer’s authority devoid of any substance
- Actual performance of the written agreement between the user and the employer is entirely in accordance with its express provisions.
The instructions the user gives to the employer’s staff will be deemed to be exercise of a part of the employer’s authority if:
- The instructions are given either without there being a written agreement between the parties or where the written agreement between the user and the employer does not meet the said requirements or
- Actual performance of the written agreement between the user and the employer does not accord with the express provisions set down in it.
In addition, the user must inform his works council of the existence of such an agreement. If the members of the works council ask, the user must provide them with a copy of the part of the agreement relating to the instructions. If he refuses to provide the copy, the agreement is deemed not to exist. If there is no works council, the information has to be provided to the health and safety at work committee, failing which the trade union chapter.
These changes came into effect on 10 January 2013.
What is the potential impact?
Thedanger of proscribed loans of staff is more present than ever. In the case of a proscribed loan of staff, the agreement under which an employee is hired to be lent on to a user will be deemed void as soon as the employee starts work with the user.
The user and the employer will be jointly and severally liable to pay the social security contributions, pay and benefits resulting from that agreement.
The user and the employer will be deemed to be in an open-ended employment contract as from the start of work. If the user wants to terminate the employment contract, he will therefore have to honour the termination rules applying to open-ended employment contracts. However, employees can terminate their agreements without notice or compensation until such time as they are no longer under loan to the user.
Companies that are guilty of proscribed loans of staff also risk criminal or administrative penalties.
2 – Anti-abuse provision in the case of international employment situations
The Programme Act introduces an anti-abuse provision under which the Belgian social security scheme is still applicable to an international employment situation if it is evidenced that the European choice of law rules in relation to social security were circumvented to avoid the case being subject to Belgian social security.
The European choice of law rules on social security are currently set down in European Regulation no. 883/2004 on the coordination of social security systems and European Regulation no. 987/2009 laying down the procedure for implementing Regulation (EC) No 883/2004 on the coordination of social security systems. In addition, a practical manual and decisions of the Administrative Commission further clarify these coordination rules.
Where the provisions of the coordination regulations are applied to a situation vis-à-vis an employee of self-employed person without the conditions set down in these legislative instruments being adhered to, with the aim of getting round the Belgian social security legislation that would otherwise have applied to that situation, there is deemed to be abuse.
Such abuse can be held to exist by a national court, a public social security institution, a government office in charge of applying the social security laws or a manpower inspector. The employee or self-employed person is subject to the Belgian social security scheme if that legislation ought to have applied under the European choice of law rules as from the first day on which the conditions for applying it were met.
However, account has to be taken of the seven-year social security limitation period in cases of fraud. Liability to Belgian social security can already be effective before withdrawal of the A1 document issued by the relevant foreign authorities.
The authority citing the anti-abuse provision bears the onus of proving that abuse has occurred.
The measure came into force on 10 January 2013 but it is open to question whether the measure will withstand scrutiny by Europe.
3 – Employees have to pay solidarity contribution on non-recurring results-related benefits
Non-recurrent results-related benefits are benefits linked on the basis of objective criteria to the collective results of a business, a group of businesses or a defined group of employees. These benefits depend on the achievement of clearly identifiable, transparent, definable/measurable, verifiable objectives whose attainment is clearly uncertain at the time the bonus scheme is introduced.
The maximum amount of the non-recurrent results-related benefits not regarded as pay went up to EUR 3,100 as of 1 January 2013.
In addition to the special social security contributions of 33% that were already payable by the employer, from 1 January 2013, the employee also has to pay a solidarity contribution of 13.07% on the benefits actually paid out.
Note that this employee contribution also applies to non-recurrent results-related benefits systems that were set up before 1 January 2013 but that are paid out on in 2013.
Only the non-recurrent results-related benefits will now still be tax-free.