COVID-19 and Temporary unemployment
Temporary unemployment and COVID-19
1. Introduction
The corona crisis has brought the economic activities of many companies to a complete standstill since 18 March 2020. On that day, the Belgian government decided by ministerial decree to take a number of far-reaching measures, the so-called 'lockdown light', in order to contain the further spread of the highly contagious COVID-19 virus. The duration of these measures has now been extended to 19 April 2020 and will be evaluated on a weekly basis. One of these measures consisted of the compulsory closure of non-essential shops and retail outlets, cafes, restaurants and establishments belonging to the cultural, festive, recreational and sports sectors. Another announced measure concerns the obligation for non-essential businesses[1] to introduce teleworking for any function for which this is possible. For those companies where teleworking is not possible or practicable, the obligation of 'social distancing' (i.e. the retention of 1.5 m between each person) must be guaranteed to the maximum extent possible within the company. Companies unable to comply are obliged to close down.
The corona crisis has important consequences for employment within the company in various ways. There are, for example, companies which, due to a lack of orders, contracts and subcontracting, will find it difficult to continue employing their employees. Needless to say, companies that are obliged to close down will not be able to continue employing their employees.
With a view to maintaining employment in the long term, the Belgian government has adapted the system of temporary unemployment in order to deal with the current crisis (by Royal Decree published in the Belgian State Gazette on 2 April 2020). Under the temporary unemployment system, an employer may, under certain conditions, be permitted to temporarily suspend the employment contract of some or all of his employees, either in whole or in part. The temporarily unemployed employee can then apply to the National Employment Office (hereinafter referred to as "NEO") for unemployment benefits.
2. The system of temporary unemployment
2.1. Temporary unemployment
Today, there are two different forms of temporary unemployment:
· on the grounds of force majeure;
· for economic reasons.
The force majeure temporary unemployment scheme was made considerably more flexible as part of the government measures to deal with the COVID-19 pandemic. In addition, the Federal Minister of Employment stated that this system (the so-called "corona procedure") is currently the standard procedure for employers affected by the consequences of the crisis.
Temporary unemployment for economic reasons can still be applied for all cases where the lack of work is not linked to the COVID-19 pandemic. The system of temporary unemployment on grounds of force majeure is further explained below.
2.2. Temporary unemployment on the grounds of force majeure
In principle, force majeure only occurs when a lack of work is caused by a sudden, unforeseeable event, regardless of the will of the parties.
For example, force majeure occurs when employees cannot be employed by order of the government, directly because the government prohibits it (in the case of compulsory closure) or indirectly because an injunction or prohibition makes employment temporarily impossible (in the context of an obligation to telework or compliance with social distancing). In such cases, the employment contract will deemed to be suspended on grounds of force majeure and the employees concerned fulfilling the conditions may receive benefits as temporary unemployed.
However, the government has decided to apply the force majeure hypothesis very broadly. All applications for temporary unemployment linked to the COVID-19 pandemic will be accepted.
In addition to the flexible application of the notion of force majeure, the government has considerably simplified the formalities for employers.
2.2.1. Who is eligible for temporary unemployment on grounds of force majeure?
Temporary unemployment for reasons of force majeure for blue and white collar workers can be introduced through a single procedure.
This can be done for all the days on which the employees cannot be employed, but only per full day of temporary unemployment. Also, temporary unemployment does not necessarily have to apply to all staff but can be introduced for some of them. In addition, employees can alternate days of unemployment with working days.
2.2.2. Which procedure should be followed?
During the period of validity of the measures taken by the government to combat COVID-19 (currently until 19 April 2020[2]), it is sufficient for the employer to submit a 'scenario 5' declaration via socialsecurity.be.[3]
2.2.3. For which period can I apply for temporary unemployment on grounds of force majeure?
The application for this flexible form of temporary unemployment on the grounds of force majeure is accepted by the NEO with retroactive effect from 13 March 2020.
The NEO indicates on its website that the flexible application of temporary unemployment can only be invoked until 19 April 2020. This application period will very likely be extended if the government extends its far-reaching measures to combat COVID-19.
Companies that would still be affected by the corona crisis past this date may afterwards, if necessary, apply for temporary unemployment for economic reasons. However, this procedure is much more formalistic and cumbersome. Moreover, the Federal Minister for Employment has stated that she will not consider applications for recognition as a company in difficulty[4] during the period of validity of the measures taken by the government (currently until 19 April 2020, but possibly renewable).
However, it is advisable for companies to start preparing for the period following the government measures and possibly prepare an application file for temporary unemployment for economic reasons.
2.2.4. How much does this unemployment benefit amount to and does the employer have to pay a supplement to it?
The temporary unemployment benefit in the event of force majeure corresponds to :
· 70% of the salary, with the salary to be taken into account capped at 2754.70 euros gross;
· A supplement at the expense of the NEO of 5.63 euro per day.
In principle, in the event of temporary unemployment due to force majeure, the employer is not required to pay a supplement to the above benefit.
In a number of sectors - and therefore depending on the joint (sub)committee to which the company belongs - the employer is obliged to grant an additional supplement to the employees in the temporary unemployment scheme (e.g. joint committee no. 118 for the food industry workers).
2.2.5. Two particular questions in case of temporary unemployment on the grounds of force majeure
a. What about already planned holidays of the employees?
Holidays are always agreed between employer and employee. As a result, neither the employer nor the employee can be obliged to withdraw or cancel the already planned or accepted holidays.
However, temporary unemployment is not possible on 'scheduled' holidays. During this period, the employee will therefore not be temporarily unemployed.
Conversely, the employee cannot be obliged to take holidays before he is temporarily unemployed.
b. What if my employee falls ill prior to or during temporary unemployment on the grounds of force majeure?
Until now, there is a great deal of uncertainty as to whether any guaranteed salary is due if the employee's illness precedes temporary unemployment due to force majeure.
The Federal Public Service of Employment has indicated that the employer is not required to pay any (guaranteed) salary for the period of temporary unemployment on the grounds of force majeure, regardless of whether the employee falls ill during the period of temporary unemployment or whether the illness started before. The sick employee does receive a benefit from the health insurance fund during this period.
However, there is also another legal interpretation, namely that the first suspension takes precedence. This would then have the effect that guaranteed pay would have to continue to be paid since the incapacity for work is the first suspension of the employment contract.
The social partners have not yet been able to adopt a common position on this issue today.
If you have any questions, you can contact Curia.
[1] the essential businesses and sectors were listed as an annex to the Ministerial Decree of 18 March 2020 and supplemented by the Ministerial Decree of 23 March 2020 https://crisiscentrum.be/sites/default/files/content/mb_-_23-maart.pdf
[2] If the period of validity of the measures is extended, this period will also be automatically extended.
[3] This can be done by the employer himself or via its social secretariat via the online tool on the social security portal, see https://www.socialsecurity.be/site_nl/employer/applics/drs/onem/index.htm. This declaration is accompanied by the following statement: as a reason for temporary unemployment "force majeure" via selection of code 5.4 "nature of the day" and as a reason for the force majeure situation "coronavirus".
[4] for those companies which cannot demonstrate a 10% decrease in turnover, production or decision.