The new Claeys Formula

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Date:
10 Oct 2011

<p>Today, the new version of the Claeys Formula is revealed reflecting case law awards in 2010. It gives a result that is slightly lower than that of the 2008 version.</p>

Today, the new version of the Claeys Formula is revealed reflecting case law awards in 2010. It gives a result that is slightly lower than that of the 2008 version.

 

Since 1974, the Claeys Formula has been the pre-eminent tool for employers and employees to determine the notice period or indemnity in lieu of notice in cases involving the dismissal of a "higher" employee (i.e. an employee with an annual remuneration exceeding 30,535 EUR (2011 amount)). The Claeys Formula is based on a statistical analysis of the notice periods that have been granted by the labour tribunals and labour courts. As case law constantly evolves, the Claeys Formula is updated on a regular basis.

A study of the case law of the labour tribunals and labour courts of 2010 has led to the 2008 Claeys Formula being updated. The study showed that the average notice period that was granted by the judges in 2010 is slightly shorter than what was granted previously. The new Claeys Formula establishes once again a breaking point for an annual remuneration exceeding 120,000 EUR.

The new Claeys Formula is as follows:

  • for white-collar employees with an annual gross remuneration under 120,000 EUR:

(0.87 à— length of service) + (0.055 à— age) + (0.038 à— annual gross remuneration/1000) - 1.95 = months' notice;

  • for white-collar employees with an annual gross remuneration exceeding 120,000 EUR:

(0.87 à— length of service) + (0.055 à— age) - (0.0029 à— annual gross remuneration/1000) + 2.96 = months' notice

The Act of 12 April 2011 provides for new fixed notice periods as from 1 January 2012. However, these new notice periods are only applicable to employees who are hired as of 1 January 2012. For all "higher" employees who are already in service today or who will enter into service before 1 January 2012, the Claeys Formula will, as a rule, retain its value as a guideline.

The law governing employment termination will be subject to further modifications in the near future in the light of unifying the status of white-collar and blue-collar workers. Obviously, we will monitor these modifications very closely and will keep you posted.