BELGIUM Law and Practice Contributed by: Steven De Schrijver and Carl Dotremont, Allegiance Law
For transfers under CBA No 32bis, in the absence of representative bodies, individual employees must be informed about the transfer’s date, rationale, legal and economic implications, and proposed measures. In cross-border transactions, the European Works Council must be informed and consulted as required. Protection Against Dismissal If CBA 32bis applies, employees cannot be dismissed owing to the transfer, whether initiated by the buyer or the seller. Violating this prohibition may lead ter- minated employees to seek damages, in addition to severance indemnity (ranging from three to 17 weeks’ salary). These considerations underscore the impor- tance of a comprehensive understanding of local legal intricacies for acquirers engaging in M&A transactions. Prohibited Practices Two prohibited practices that can regularly be found during the due diligence of a technology company are set out here. Sham self-employment Engaging in sham self-employment in Belgium, where individuals assume the status of self-employed while working under an employer’s authority, can lead to significant consequences. Authorities may re-quali- fy such individuals as employees, demanding both employer and employee contributions – potentially increased with interest and surcharges. Clients/ employers cannot recover these contributions. The re-qualified employee may also claim retroactive pay- ment for salary elements, such as end-of-year premi- ums and holiday pay. The deemed employer is obliged to pay double holiday pay and end-of-year premiums within a five-year statute of limitations. Additionally, other aspects of Belgian employment law – including termination regulations – apply. The Social Security Authorities have a three-year period (up to seven years in cases of fraud) to make claims, whereas employees have five years to assert their claims. Posting of workers The posting of workers in Belgium involves a situ- ation where a worker – typically employed in coun- tries other than Belgium – is loaned to a Belgian user by their employer, who exercises authority over the worker. The employment relationship between the for-
eign undertaking and the posted worker should exist prior to posting and be maintained during the posting period. Employers posting workers to Belgium must adhere to Belgian working conditions, including pay, as mandated by legal and regulatory provisions and sanctioned under criminal law. These provisions cover various aspects, including working time, remuneration, leave, worker welfare and non-discrimination. Viola- tions can result in legal consequences. These issues should in general be covered in the representations and warranties, whereas concrete risks established during the due diligence should be covered by spe- cific indemnities. They may also require post-closing actions. IP Considerations The copyright for a creative work is initially vested in the individual who created it. Consequently, the employee-creator retains ownership of the copy- rights for works developed within the scope of their employment contract. However, there is provision for the partial transfer of these rights, limited to the prop- erty rights of the copyright-protected works, which can be transferred to the employer. It is crucial that any such transfer, whether full or partial, is explicitly outlined in the employment contract or a separate agreement between the employer and employee. Sim- ply remunerating the employee-creator is insufficient for acquiring these rights; the creation of the work must also fall within the parameters of the employ- ment contract. Furthermore, Belgium does not have a “work for hire” regime, which implies that if someone is commis- sioned to create a work for a company (such as a logo or website design), the individual author(s) will automatically hold the copyright to that work. Con- sequently, proper due diligence should be performed on IP clauses in work rules, employment contracts or other agreements such as consultancy agreements. In contrast, although the law around IP rights in soft- ware, databases and semiconductor topographies (chips) is based on copyright, the issue of software creations in an employment context is regulated com- pletely differently. The basic principle here is that the employer is presumed to acquire the property rights to software, databases and topographies unless the
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