The new Summer Agreement: an Employment Deal

This year, the Michel government concluded another Summer Agreement. This new summer agreement brings in no less than 28 measures to stimulate job creation, a whole series of measures.

We selected the most relevant measures for you, because not every measure in the Summer Agreement has a direct impact on your personnel policy.

A number of measures should already start on 01 January 2019. For others, no date has been set yet. Sometimes you may even recognise a measure from the Summer Agreement of 2017.

The plans are not always very concrete and many details are still missing. We will keep you informed.

The mobility budget

1. The mobility budget has been planned for some time now, but it is finally a fact. The government had already introduced the mobility allowance or cash-for-car before. At the same time, the mobility budget is the first concrete measure from the employment deal that was approved by the Council of Ministers.

As from 01 October 2018, employees will be able to exchange their company car and will receive a mobility budget in return. The mobility budget will also be accessible to employees who are eligible for a company car. The initiative to implement the mobility budget lies with the employer.

Measure into force as from 01 January 2019

2. Time credit – End-of-career time credit/ phased retirement gives the worker approaching end of career the opportunity to reduce their working time until retirement. Now this type of time-credit is possible from the age of 55. From 01 January 2019, the age will generally be raised to 60.

3. Time credit – Time credit for undergoing recognised training in a bottleneck profession will be increased from 36 months to 48 months as from 01 January 2019.

4. SWT – The government wants to discourage unemployment with corporate allowance (SWT). As from 01 January 2019, the employer will be obliged to pay a minimum of € 3,600 in the event of restructuring for every SWT beneficiary who is undergoing training in a bottleneck profession.

5. End-of-career job – As an employer, you can grant compensation to older employees who suffer a loss of earnings as a result of a measure to reduce their workload (for example, the switch from shift and night work to day work). You are not liable for social security contributions on the bonus that you grant to employees of at least 58 years of age to ease their workload. The “soft end-of-career job” allowance had to be determined by a sector CA or an enterprise CA, or an amendment to the employment regulations.

From 1 January 2019, the employee has an individual right to apply for a "soft end-of-career job". However, the agreements between employee and employer must still be negotiated and laid down in the individual employment contract.

6. SWT – Redundant employees who, at the time of termination of the employment contract, are 62 years of age or older and who have had a career of 40 years, are able to join the general system of SWT. (The career condition for women will gradually be raised to 40 years by 2024.) As from 01 January 2019, the career condition will be raised to 41.

7. SWT –As from 01 January 2019, the age condition for SWT restructuring will be raised to 59. As from 01 January 2020, the age condition will be raised to 60.

Longer-term measure - No specific date

A precise date is not yet available, but the measures are already relatively clear.

8. Positive discrimination – Discrimination is prohibited. This also applies, as a rule, to positive discrimination. The government wants more legal certainty for employers who take positive action towards groups at risk (young people, low-skilled people, employees aged 55 and over, people from ethnic minorities or migrants).

9. Termination of employment contract – An employer who terminates an employment contract due to medical force majeure must pay the outplacement assistance of the employee to the value of 1,800 € or finance it through the sectoral fund. However, this is conditional on the employee not being declared medically unfit for a possible return to the labour market.

10. Termination of employment contract – You dismiss an employee without notice. In that case, he must register with the regional employment service within one month after the notification of the dismissal. It may well be that you, as an employer, are obliged to inform the employee in the letter of dismissal.

11. Termination of employment contract –When an employee is dismissed, he must serve a notice period or he will be granted severance pay. Soon, the redundant worker will be able to ask that a third of his severance pay is spent on training. In that case, he may benefit from a reduction in taxes and social security contributions. In order to be able to follow this training programme, the duration of the notice period could also be shortened, in consultation with the employer.

12. Incapacitated for work – The right to work disability benefits expires on the first day of the month following the month in which the person reaches the statutory retirement age. An employee who continues to work after the retirement age and becomes incapacitated for work is entitled to work disability benefits until the first day of the second month following the month in which the employee became incapacitated for work. In the future, those who continue to work after the age of 65 may receive benefits for a maximum of 6 months.

We have seen this before in the summer 2017 agreement 

13. Starter jobs – The government wants to promote the recruitment of young employees aged between 18 and 21 with the help of starter jobs or the starter wages. In the summer agreement of 2017, the government decided to allow employers to reduce the employee’s gross salary by 6% for a 20-year old, by 12% for a 19-year old and by 18% for an 18-year old. By way of compensation, the employer pays a net compensation to the young employee. In reality it turned out to be quite a complex measure. The government is not giving up. The exact changes are not yet clear, but one thing is sure: the net wages of the young person will not be affected.

Even more plans for the future

Other measures may require some study work. Certainly not all decisions have been taken yet.

14. Social Maribel – By 01 November 2018, the government intends to evaluate the allocation of the Maribel social budgets. The aim is to set aside budgets for training of new employees in the health sector.

15. Labour market – The social partners list critical functions and bottleneck professions by joint committee, and identify functions that are threatened by digitisation.

16. Training – The sectoral funds are exploring how their training policy can be improved (in particular for the bottleneck professions).

17. Training – Encouraging employers to invest in the long-term training of employees. It is not yet clear how this will be put into practice.

18. Training – The government wants to encourage employees to follow a training programme after they have been dismissed.

19. SWT – The government wants the regional employment services to pay particular attention in their activation policy to SWT beneficiaries who can occupy a bottleneck profession.

20. Labour market – The government wants to link wages to skills and productivity rather than to age. The concrete agenda of this reform has yet to be defined.

21. Taxation of overtime – The government is examining an increase in the number of overtime hours that entitles employees to tax reductions from 130 to 184 hours, in the sectors that have been strongly affected by the problem of bottleneck professions.

Author: Yves Stox

06/08/2018