Severance pay and "time credit": to be calculated on full-time salary after all?

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Date:
08 Oct 2010

<p>In case of dismissal of an employee during a period of part-time "time credit", the <em>notice period</em> must be calculated on the hypothetical full-time salary. The calculation of the <em>severance pay</em> on the other hand has been subject to discussions for a long time. The majority of Belgian tribunals and courts believes that this severance pay should be calculated on basis of the real -and thus part-time- salary.</p>

In case of dismissal of an employee during a period of part-time ‘time credit’, the notice period must be calculated on the hypothetical full-time salary. The calculation of the severance pay on the other hand has been subject to discussions for a long time. The majority of Belgian tribunals and courts believes that this severance pay should be calculated on basis of the real -and thus part-time- salary.

In its Meerts-judgment of 22 October 2009, the European Court of Justice solved this question for employees with part-time parental leave. The Court decided that the severance pay should be calculated on the hypothetical full-time salary. Belgian legislation was adapted to this principle.

After the Meerts-judgement, a discussion commenced on the question whether this calculation method shouldn't also be applied to the severance pay for employees with part-time "time credit" who get dismissed. Both the Brussels Labour Tribunal and the Brussels Labour Appeal Court already judged that this principle cannot be applied by analogy to employees on "time credit".

In its judgment of 2 September 2010, the Labour Tribunal of Ghent now departs from this case-law. The Labour Tribunal judged that the European Court of Justice's landmark Meerts-judgment should also be applied in case of "time credit". Hence, according to the Labour Tribunal, the severance pay for an employee dismissed during a period of part-time "time credit" must be calculated on his theoretical full-time salary.

Hitherto, the Ghent Labour Tribunal stands alone with this point of view.

It's clear that discussions on this topic have far but ended. The Brussels Labour Tribunal has asked the <st1:street><st1:address>Constitutional Court</st1:address></st1:street> whether the difference in treatment between employees in part-time parental leave and part-time "time credit" does constitute a breach of the principle of equality and non-discrimination.

To be continued...