Employee restructurings in Belgium: "it takes two to tango...", but who is your partner?

In Belgium, when engaging in such a restructuring, the mandatory process of information and consultation and the culture of collective bargaining run with various internal bodies of worker participation within the enterprise.  The successive stages of such process – as we see it throughout Europe – call for an initial information/consultation (‘I/C’) process (after the preparatory steps), followed by a cooling-off period which is designed to engage in collective bargaining, and then the implementation stage (which can be quite complex and multi-faceted). 

To start with the latter part, collective bargaining is by law entrusted to the trade union delegates (‘TUD’), and signature of any collective bargaining agreement which embodies the social plan (financial and non-financial measures accompanying the redundancies) is by law reserved for trade union officials. So far so good.

The I/C process typically runs through the works council.  In the absence of a works council (as is the case for companies with fewer than 100 employees), the I/C process must be handled with the TUD.   In certain industries, however, there are no mandatory rules for setting up a TUD, and in many companies, union presence is currently clearly in decline. Hence, for lack of union membership, trade unions often no longer succeed in appointing a TUD. 

What happens then if companies with under 100 employees – without a works council or a TUD – have to engage in employee restructurings?  Who is the counterpart on the employee/trade union side for hosting the I/C process in those circumstances? Well, surprisingly, the answer is apparently not all that clear.  The reason is that Belgian regulations on collective layoffs are dispersed in different, largely overlapping but uncoordinated and sometimes contradictory statutes and collective bargaining agreements (‘CBA’).  

On the one hand, there is the old CBA no. 24 of 1975, which spells out some basic rules on I/C in collective layoffs.  That CBA naturally refers to the works council as the body to conduct the I/C process.  A more recent act of 2008 has extended the powers of yet another company body of worker participation, the committee for safety and wellbeing of workers (‘the Committee’) in this regard.  The Committee is set up in any enterprise with a workforce of 50 or more. The act holds that in the absence of a works council and a TUD, the Committee shall host the I/C procedure covered by CBA no. 24.  Under a more recent version of the nationwide CBA, only if there is no Committee shall the I/C process be conducted with all employees. 

On the other hand, there is the so-called Renault Act (of 13 February 1998), enacted after the closure of the assembly plant of that car maker.  As a reaction to the brutality of the closure at the time, that act completes and fine-tunes the exact scope and content of any I/C procedure to be followed.  The Renault Act expressly states that the I/C process shall – pursuant to applicable CBA’s – be carried out in the works council, and in its absence, with the TUD, and in its absence, … with all employees (in a townhall setting).  No mention of the Committee at all.

It follows that for companies with between 50 and 100 employees, without a TUD and with a Committee, as may in practice well occur, it is quite unclear who is the appropriate and legitimate sparring partner on the employee/trade union side for conducting the I/C procedure. 

The question is not about application of regulations in and over time – the extension of the powers of the Committee having been introduced in 2008, and the Renault Act going back to 1998.  The extending act of 2008 does not even mention the Renault Act.  No overlap on this count.

It is also not about preferring the more institutional route of channeling the I/C procedure through established (trade union driven) bodies, such as the Committee.  As noted, CBA no. 24 as amended in 1993 introduced the concept of I/C with all employees attending, in a townhall setting, so there is no ground to speculate in favour of the institutional approach.  

The question may be one of hierarchy of legal sources, a statute of mandatory law (arguably even of public policy) clearly overruling the nationwide CBA on the same subject matter.  From that perspective, organising a townhall meeting clearly makes sense when conducting a mass layoff.
 
Official sources (www.werk.belgie.be) try to compromise Belgian style by setting an order which includes all: first the works council, then the TUD, then the Committee and finally, in the absence of a Committee, all employees.  However, that reading does not withstand the test of the basic rule on how to interpret the law, i.e. the rule that a clear legal text  - like the Renault Act - should not be interpreted (‘clara non sunt interpretanda’).

For the time being, this manifest unclarity in Belgian law – in a matter as delicate as conducting collective layoffs – apparently has not generated major conflict, administrative sanctions nor litigation.  However, since the bulk of the substantive I/C obligations are set forth in the Renault Act which moreover takes legal precedence, it appears that in the situation at hand (an enterprise with neither a works council, nor a TUD but with a Committee), the townhall setting is the more law abiding approach for conducting the I/C process.  Companies in this situation are well-advised to carefully analyse the benefits and drawbacks of one or the other option in the preparation stage well before any announcement. In particular, they should take heed of the advice to organise successive townhall meetings as a realistic working hypothesis in employee restructurings.