Below is an overview of different legal measures to consider including, but not limited to, contractual obligations, employment and social law facilities, corporate law and administration of personal data.
The fulfilment of contractual obligations might become strained during this period. As a result of the Coronavirus outbreak, some businesses might find themselves in a situation where they are not able to supply their customers or to receive supplies
In the event it is reasonably impossible for you to fulfil your contractual obligations temporarily or permanently, you may invoke “force majeure” (“overmacht”) which may (temporarily) release you from your obligations. The requirements, however, for invoking “force majeure” are very strict.
Considering the above, we advise you to:
In times of economic hardship, it can be challenging for businesses to maintain employment. Legislative facilities are available to relieve the financial burden of employment under these circumstances.
We advise you to check, where appropriate, if the below facilities apply to your business.
Temporary unemployment due to COVID-19 force majeure (“simplified” procedure)
As from 1 September 2020, the simplified procedure for temporary unemployment due to COVID-19 force majeure can only be used by companies that have been (or belong to a sector that has been) particularly hit by the COVID-19 crisis. This is the case if:
Temporary unemployment due to “force majeure” (regular procedure)
If your company cannot benefit from the simplified procedure for temporary unemployment due to COVID-19 force majeure, you can still follow the regular procedure for temporary unemployment due to force majeure, if the conditions are met. This might, for example, be the case when an employee disposes of a quarantine certificate or when the school or child daycare is closed because of COVID-19.
Temporary unemployment due to economic circumstances
Companies that are not considered to be particularly hit by the COVID-19 crisis (or do not belong to a sector which has been particularly hit) need to apply for temporary unemployment due to economic circumstances as from 1 September 2020. This facility is available for both blue-collar workers and white-collar workers in the event that their business is not able to maintain the normal level of employment because of a decline in orders, production, turnover and/or clients. The application of this facility for white-collar workers is subject to other conditions (e.g. CBA, proof that the company is in difficulties by for example a decrease of min. 10% of turnover, production or orders, etc.). However, certain transitional measures apply as from 1 September 2020 until 31 December 2020.
Mutual agreement on suspension
An employer always has the possibility to mutually agree with his or her employees to temporarily suspend employment. This means that the employees will be exempt from their obligation to work during a certain period of time but will, however, not be paid by the employer.
It’s important that every Belgian company takes some time to reflect on the impact of the Coronavirus on their organization. Not only should the impact on the companies’ financial results be considered, but the organization of the general meetings of shareholders and the (board of) directors may also need some adjustment to protect the health of those involved.
Meanwhile, the Belgian government has issued the Royal Decree n° 4 of 9 April 2020 containing various provisions on co-ownership and company and association law in the fight against the COVID-19 pandemic (hereinafter the “Royal Decree”), amended by the Royal Decree of 28 April 2020 in terms of the duration of the measures. The provisions of the Royal Decree apply to all meetings to be held or convened between 1 March 2020 and 30 June 2020.
Below, a brief overview of some relevant options options introduced by the Royal Decree is provided, which may offer solutions for the organization of meetings of the various corporate bodies. Furthermore, some relevant provisions of the Belgian companies’ and associations’ code are outlined.
The points below relate to private limited liability companies (besloten vennootschap / société à responsabilité limitée) and to public limited liability companies (naamloze vennootschap / société anonyme).
Possible options for the general meeting of shareholders
Possible options for the meetings of the (board of) directors
The applicable company law requirements would need to be carefully considered and complied with for each of these options.
Points to consider regarding annual accounts and annual report
Annual report: Depending on the specific circumstances of your company, the current situation in relation to the coronavirus could qualify as a material event or as a risk or uncertainty to be included in the annual report.
Annual account filing at the National Bank: Late filing of the annual accounts can lead to penalties.
In practice, the following late filing fees shall apply:
In the event the general meeting is postponed pursuant to the Royal Decree, these terms of nine, ten, twelve and thirteen months are also extended by ten weeks.
When taking measures to deal with the current situation, it is important to always keep in mind that whenever personal data is being processed, the applicable data protection rules apply. The following specific guidelines have already been issued by the Belgian Data Protection Authority (DPA) in this respect.
Lawfulness of processing health data
Preventive measures taken by companies need to respect the general principles regarding the processing of personal data. In other words, companies and employers:
Frequently Asked Questions
The Belgian DPA also published a number of Frequently Asked Questions. Below is a highlight of what we consider some of the most relevant answers.
The above principles (dated 13 March 2020 and updated on 2 April 2020) will be reviewed and evaluated daily by the appropriate authorities and by the Data Protection Authority.
What if you are a service provider to public authorities, but your employee who normally performs the public procurement contract has to be quarantined? What if your supply chain has been interrupted and prices for a necessary product have rocketed? The pandemic character of a virus, the possible closing of the borders and the consequences for the import of specific products and services might have a serious impact on the performance of public procurements contracts.
When it comes to commercial contracts, an important question is whether the consequences of the coronavirus can qualify as force majeure or an “act of God”; in which case a party can rely on this exception in a supplier-customer relationship.