If either the employee or employer wants to terminate the contract with immediate effect and without respecting the notice period as laid down by the law, they will need to pay the other party an “indemnity in lieu of notice” which equals the salary for the period which normally should have been respected as a notice period.
Article 35 of the act on employment agreements finally foresees the possibility for either party to terminate the contract for a serious reason. Such a reason is one which makes it immediately and irrevocably impossible to continue the employment relationship (e.g. theft by the employee or fraud committed by the employer). In this case, no indemnity is due to the other party and the contract comes to an end with immediate effect.
Apart from the above-mentioned situations which are foreseen by the act on employment agreements, parties can always choose (based on the Belgian Civil Code) to terminate the employment agreement in mutual consent. In that case, parties are free to choose the end date, any indemnities due etc.
Terminations with respecting a notice period or a serious cause are subject to mandatory formalities which can lead to an invalid termination. The termination in mutual consent and the one with immediate effect by paying an indemnity in lieu of notice are not subject to any legal formalities.
As regards the reasons to terminate the contract, a new option called a the “manifestly unreasonable dismissal” was introduced in the Belgian labour legislation in 2014. A “manifestly unreasonable dismissal” is a dismissal based on reasons which:
- Are not related to the capability of the employee to perform the job or the behavior of the employee or
- Are not based on the necessities regarding the functioning of the company and which would never have been decided by a normal and reasonable employer.
Employees have the right to ask their employer to outline the reasons around which the dismissal was based. If the dismissal is considered to be manifestly unreasonable, the employer can be sanctioned with an indemnity of a minimum of three and a maximum of 17 weeks’ salary. The amount of the indemnity is decided upon by the labour court.