Unlike for its blue -collar workers, where the company only needs to demonstrate that the normal working conditions cannot be maintained for economic reasons or force majeure to initiate temporary unemployment, a lengthier and more complex process needs to be followed to introduce temporary unemployment for its white collar workers.
In principle only companies suffering economic difficulties can introduce temporary unemployment for their white-collar workers with a temporary 100% suspension of the execution of the employment agreement for a maximum of 16 weeks per year or a part-time suspension with at least 2 days per week, during a maximum of 26 weeks per year.
As a preliminary condition, the company must bring forward evidence of a 10% drop in turnover, production or orders in the most recent quarter, i.e. the fourth quarter of 2019. Given that the coronavirus only recently impacted the market, this preliminary condition will quite likely not be met.
In such case, the company may apply to the Minister of Labor to be recognized as a company in difficulties on the basis of unforeseen circumstances resulting in a substantial (= 10%) short-term reduction in turnover, production or orders.
To submit this application, the company had to be bound by a collective bargaining agreement negotiated with the trade unions concerning, inter alia, the amount of the supplement that the employer will pay to his employees on temporary unemployment, the measures for maximum retention of employment and the maximum duration of the suspension of the employment agreement. Companies without a trade union delegation had to establish a business plan and obtain approval of their business plan from the “Business Plans” Commission at the Federal Public Service Employment, Labor and Social Dialogue.
Collective bargaining agreement nr 147 of March 18, 2020
The company who is not yet bound by a collective bargaining agreement or by an approved business plan can now submit their application for a recognition as a company in difficulties on the basis of unforeseen circumstance and refer to the CBA nr 147 concluded by the National Labor.
Information of the workers and their representatives
The CBA nr 147 imposes compliance with the applicable obligations to inform the workers and their representatives before introducing temporary unemployment for white collar workers which means that :
- At least 14 days before applying the temporary unemployment for white collar workers, the employer must submit its file to the National Employment and inform its works council or its trade union delegation thereof;
- At least 7 days beforehand, the employer must inform the employees in writing about the modalities of the temporary unemployment and inform the National Employment Office thereof and inform the worker’s representatives about the invoked economic reasons
Supplement payable by the employer
The CBA nr 147 foresees the payment of a supplement equal to at least 5 Euros per day of temporary unemployment.
“Force majeure” to bridge the gap until the recognition as a company in difficulties
Until the Minister of Labor notifies the company of his decision to recognize the company as a company in difficulties, the National Employment Office allows companies to invoke temporary unemployment due to force majeure by means of an electronic declaration to its regional office.
Please do not hesitate to reach out to us in case would like to discuss the consequences of Covid-19 in your everyday work and how, if necessary, you can mitigate the economic consequences of supply bottlenecks and operational restrictions.