The rules on severance pay in detail

As a general rule, employees are not entitled to additional payments if terminated for reasons such as poor performance or redundancy except under specific conditions and/or up to a limited amount in cases of collective redundancies or closures. In the latter case however, the employer will often agree to a redundancy scheme that offers payments that are more generous than the statutory ones.

A sales representative may be entitled to a clientele or goodwill indemnity for the loss of clientele as a result of the termination, provided he or she has worked as a sales representative for at least one year. The sales representative must also demonstrate that he or she attracted clientele for the employer. Contributing a minimum number of customers will be deemed sufficient, even if these represent a low turnover. If the employment contract contains a non-compete clause, the burden of proof is reversed. The employer will need to prove that the sales representative did not attract any new customers. Further, the employer may demonstrate that the dismissal caused no prejudice even if the sales representative attracted new customers, in which case no clientele indemnity will be payable.

The clientele indemnity equals three months’ salary, including all contractual, statutory benefits and fringe benefits if the employee’s length of service does not exceed five years. It is increased by one month’s salary for each five-year period commenced after the initial period of five years.

Additional indemnities may be payable in addition to the regular termination indemnities for a dismissal on protected grounds such as pregnancy or a request for a career break. Specific indemnities may also be payable if the employer terminates the employment contract of an employee representative on the works council, European works council, the committee for prevention and protection at work, a substitute for one of these functions, a candidate-member at social elections or a trade union representative contrary to the dismissal grounds and procedures provided by law.

If the employee meets certain age and length of service conditions at the time the employment contract comes to an end, he or she may also be entitled to monthly company allowances on top of the statutory unemployment benefits at the expense of the employer until the age of 65.

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Author: Claeys & Engels 

Date: December 2019