Points for Retail Sector Employers to Consider when Dismissing Employees for Economic or Technical Reasons
The retail sector has been one of the sectors most affected by the COVID-19 pandemic and as a result employers therein might be considering dismissing employees for economic or technical reasons. Employers must be aware that most joint committees in the retail sector have entered into collective bargaining agreements (CBAs) obliging employers to first take measures to avoid dismissals and, if dismissals cannot be avoided, to comply with a specific procedure. This article highlights the most important points that employers must consider.
The five most important retail-specific joint committees are:
- Joint Committee 201 for white collar workers in small retail companies (ie, with fewer than 50 employees);
- Joint Committee 202 for white collar workers in food retail companies;
- Joint Committee 202.01 for white collar workers in medium-sized food companies;
- Joint Committee 311 for blue and white collar workers in large retail companies (ie, with more than 50 employees); and
- Joint Committee 312 for blue and white collar workers in supermarkets.
Joint Committees 202, 311 and 312 have entered into a CBA that provides for additional obligations and specific procedures with which employers must comply with regard to anticipated dismissals for economic or technical reasons. Employers in Joint Committees 201 and 202.01 need not comply with any additional sector-specific requirements.
This article focuses on the sector-specific procedures in the case of dismissals for economic reasons that are in addition to any general obligations under national law. It will not discuss other dismissal procedures in the concerned joint committees (eg, dismissals for serious cause or professional incompetence).
On 19 February 2014 Joint Committee 202 concluded a CBA (this CBA does not apply to the medium-sized food companies that are part of Joint Committee 202.01). The CBA's key points are as follows:
- In the case of negative economic circumstances, employers must first look for alternatives to avoid collective dismissals (eg, investigating the possibility of relocating employees or introducing a system of unemployment benefits with a company top up (ie, a 'bridging pension')).
- In the event of dismissals as a result of economic circumstances, a priority order must be respected, which takes the following criteria into account:
- length of service; and
- family burden.
In the event of re-employment, priority must be given to the redundant employees in reverse order to that in which they were dismissed.
- In addition, employers must adopt all useful measures to safeguard remaining employees' employment, for example by:
- discontinuing new recruitment in the affected services;
- transferring employees to other entities or departments (instead of hiring external employees for these departments);
- informing employees of vacant positions;
- setting up an employment plan;
- negotiating an early retirement regime; or
- providing cycles of training.
- In the case of the closure of a branch, employers must try to redeploy the employees within the legal entity (eg, in another branch). If redeployment is impossible, the employees will receive an additional indemnity equal to one month's salary, which cannot be accumulated with a possible closure indemnity.
- In the case of a closure of an undertaking or a division:
- the representative employee organisations must be consulted;
- employers must inform the works council (or failing that, the trade union delegation), the employees and the president of the joint committee six months prior to the closure; and
- the joint committee will investigate the options to facilitate the redeployment of affected employees within the same sector or region.
Joint Committee 311 enters into a CBA – including a specific dismissal procedure – every two years, with the most recent one being the CBA of 23 September 2019. This CBA entered into effect on 1 January 2020 and expires on 31 December 2021. Its key points are as follows:
- In the case of a collective dismissal, employers must:
- inform the works council or, failing that, the Committee for Prevention and Protection at Work or, failing that, the trade union delegation; and
- discuss the dismissal criteria with one of these bodies.
If these obligations are not complied with, the employees concerned after their dismissal will be re-integrated in the company.
- In the case of dismissals due to economic or technical reasons that do not qualify as a collective dismissal:
- employers must try to avoid redundancies (eg, by investigating the possible transfer of employees or implementing a system of unemployment benefits with a company top up (ie, a 'bridging pension'));
- employers that must reduce their workforce for technical or economic reasons must take all necessary measures to safeguard the remaining employees' jobs. The CBA provides specific obligations in this regard (eg, by discontinuing new recruitment, transferring employees to other entities or departments, informing employees of vacant positions, dividing available work between employees by introducing temporary unemployment, negotiating an early retirement regime, providing training cycles and avoiding the systematic use of overtime and interim workers). Employers should rely on the works council or, failing that, the trade union to investigate and implement these measures; and
- employers must respect a certain order of priority for such dismissals, based on certain criteria (eg, age, length of service and the level of specialisation) if dismissals cannot be avoided.
For the above measures, employers must inform and consult with the works council or, failing that, the trade union delegation.
- If employers want to recruit new employees, specific priority must be given to candidates in the sector who have been the victim of a collective dismissal or the closure of an undertaking.
On 19 February 2014 Joint Committee 312 concluded a CBA on this topic. The key points of this CBA are as follows:
- The CBA provides that employers must provide occasional information if, for unforeseeable economic or technical reasons, staff reductions are necessary. This information must be announced as soon as possible and, in any event, before the decision will be taken. This announcement must be made in writing to the works council and the national secretaries of the representative employee organisations that signed the CBA.
- Employers that must reduce their workforce for economic or technical reasons must take all useful measures to safeguard the employment of their remaining employees by, among other things:
- discontinuing new recruitment;
- transferring employees to other entities or departments;
- informing employees about vacant positions;
- setting up an employment plan;
- organising training cycles;
- negotiating early retirement regimes; and
- informing the national secretaries of the representative employee organisations, the regional inter-company committee (if applicable) and the association of the large distribution companies in Belgium if certain employment issues cannot be resolved at the company level.
- Employers can consider a permanent exploitation by third parties (eg, a takeover) only in exceptional circumstances, taking into account the specificities of the services concerned and after consultation with the trade union organisations.