In general, the employer decides whether to hire or fire an employee.
In his absence (when he is on holiday, for example), such decisions may be taken by a person the employer has appointed for that purpose.
In this Infoflash, we briefly repeat the rules on delegation of powers.
Only the employer (natural or legal person) has the power:
- on the one hand, to hire staff;
- and, on the other hand, to terminate employment contracts.
In practice, the decision to hire and fire emanates from:
- in case of an 'employer who is a natural person': this natural person (for example a lawyer who is employer and natural person);
- in case of an 'employer who is a legal person' (company): the organ through which the company is represented (for example the board of directors of a plc).
Therefore, in the absence of the employer (natural or legal person) and especially during his holiday periods, no decisions on hiring and/or firing can be taken, even if special circumstances arise such as:
- an extraordinary increase of work in the company (resulting from an unexpected command, for example) or the simultaneous and unannounced absence of several permanent employees that has to be coped with as soon as possible by hiring one or more employees;
- the existence of obvious serious misconduct on the part of an employee that would justify immediate termination of his contract without notice or compensation.
To ensure that no decisions can be taken in his absence, the employer may delegate his powers to a third party which will, in this way, have the power to act on his behalf and for his own account.
Delegation of powers
The employer may, in the context of an agency, entrust some of his powers to another person (= an agent).
He can choose to delegate:
- the power to hire staff and to terminate employment contracts
- or one of these two powers
to a third party (e.g. a close collaborator, his lawyer, etc.) and this:
- for an indefinite period
- or for a definite period (corresponding, for example, to the duration of his leave).
The agency is obviously very useful when the employer is absent.
What are the effects of a delegation of powers?
When the employer delegates to a third party the power to hire staff and/or terminate employment contracts, he allows this third party to hire and/or fire his employees on his behalf and for his own account.
Each hiring/dismissal decision taken by a person appointed for that purpose by the employer is perfectly regular and will take full effect. The employer is bound by that decision.
Example - The immediate dismissal of an employee decided upon by a person within the limits of the agency conferred on him by the employer gives rise, on the part of the employee, to the right to severance payment payable by the employer.
Is the agency subject to certain formal requirements?
Although an agency can be created orally (or tacitly), it is strongly recommended to draw up a written document (signed and dated by the employer), ideally specifying the identity of the agent, the powers that are given to him and the duration of the agency.
Model of a clause on the delegation of powers
The employer ………… (please indicate the exact name) represented by ...................... (please indicate the identity of the representative) delegates to ................... (please indicate the identity of the agent) the power to hire staff and/or to terminate the employment contracts of his employees* on his behalf and for his own account from ........... for an indefinite period*/for a definite period from ......... to ........ *.
Drawn up at …………………………………………, on …………………………………………
Signature of the employer
* Delete as appropriate.
Lack of delegation of powers
If he has not delegated his powers to a third party, the employer has the sole authority to hire and/or fire staff in such a way that no decision could, in principle, be taken by a person other than the employer, even if the circumstances require it.
What are the effects of a lack of delegation of powers?
The hiring or dismissal of an employee decided upon by a person who did not have the power to do so (= who had not been authorised for this purpose by the employer) is considered non-existent and has no effect (unless the employer ratifies this act; see below).
Example - The employment contract is not terminated when the 'decision to terminate' is taken by a person who was not authorised for this purpose by the employer. The employer must continue to occupy the employee concerned and the employee must continue to work.
The employer is not bound by this 'decision' and will make sure to inform the person concerned (preferably in writing).
What are the effects of ratification by the employer?
The 'decision to hire/fire' by a person who did not have the authority to do so, will take full effect however, if it is ratified (approved) by the employer; this ratification has the effect of validating the decision.
Example - The immediate dismissal of an employee decided upon by a person who was not authorised to terminate the employment contract gives rise, on the part of the employee, to the right to severance payment from the moment it is ratified by the employer.
The ratification may be express (in writing) or tacit but must, in any case, be sure and take place as soon as possible (as soon as the employer has knowledge of the 'decision').
1. The employer ratifies, in due course, the decision to terminate for serious misconduct, that was taken in his absence by a person who is not authorised to fire (and especially in the case of obvious serious misconduct).
2. In a case brought before the Labour Court of Liège, the dismissal of an employee was decided upon on 25 July 2001 by a person (the employer's mother) that did not have the power to terminate the employment contract. In a letter dated 10 August 2001, the employer recognizes that his mother requested the employee to leave the workplace. For the Court, "the ratification at that time was therefore considered to be an implied ratification because of the absence of denial of the power to terminate" (judgment of 15 January 2008).
Sources: Art. 1998 of the Civil Code; "Qui a le pouvoir de licencier ?", Orientations, No. 1, 2005, p. 20 ff.; Cass., 6 February 2006, J.T.T., 2006, p. 258; Labour Court Liège, 15 January 2008, RG 8310/07 (http://jure.juridat.just.fgov.be).