Outstanding issues concerning the shortening of notice periods in the context of the unemployment with company allowance system and the reimbursement of the activation indemnity finally resolved

On 7 July 2014 the Royal Decree of 13 June 2014 was published in the Official Gazette. With this publication the caretaker government takes away a lot of legal uncertainty for the companies currently undergoing restructuring.

In the first place, the Royal Decree of 13 June 2014 gives effect to the new article 37/11 of the Law on Employment Contracts. This article provides that in case of dismissal in view of the system of unemployment with company allowance, the notice periods can be shortened to minimum 26 weeks if the company is recognised as a company in difficulties or in restructuring. Up until now this possibility to shorten only existed for the white-collar employees. The June Royal Decree determines the procedure the employer will need to follow in order to be sure of getting the permission to shorten the notice period.

In the second place, the Royal Decree amends the Royal Decree of 9 March 2006 concerning the activation policy in case of restructurings insofar as it now provides that the employer can obtain a partial reimbursement of the activation indemnity from the National Employment Office (RVA/ONEM) for both blue- and white-collar employees. The Royal Decree of 13 June 2014 applies to all dismissals that take effect as from 1 January 2014.

> Action points
In their application for recognition as company in difficulties or in restructuring, companies can ask for the permission to shorten the notice periods of blue- and white-collar employees that enter the system of unemployment with company allowance to minimum 26 weeks. All employers obliged to pay an activation indemnity to their employees can in such case claim the partial reimbursement thereof from the National Employment Office (RVA/ONEM).