Draft Royal Decree - the National Labour Council very divided as regards how to respond to Government plans to extend the scope of social security contributions!

The government asked the social partners to give an opinion on a draft Royal Decree that would increase the number of employee indemnities subject to social security contributions.

In the draft of Royal Decree, which is not publicly available, a number of indemnities due to employees would be made subject to the ordinary social security contributions (35%/13,07%).

In particular, this would concern:

• indemnities paid within a period of twelve months after the termination of the employment contract by virtue of a non-compete clause (this would be the case also when the agreement is entered into after the termination);
• goodwill indemnities for sales representatives;
• protection indemnities for: pregnant women, employees on parental leave or time credit, employees who perform night work, employees who filed a complain for harassment, sexual harassment, violence or discrimination, etc.;
• indemnities for violation of job security clauses;
• indemnities for wrongful dismissal.

The indemnities paid in the event of collective dismissal would, however, not be made subject to the social security contributions.

The representatives of employees and employers did not provide a unanimous opinion on the subject and remain divided on the desirability or the implementation of the measures as drafted.

> Action point

It is now for the government to determine how this will evolve further. We will keep you posted about developments.