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.
Failure to fulfil contractual obligations
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:
- review the terms and conditions of your contracts,
- send timely notifications to anticipate a potential non-fulfilment of your obligations,
- collect and document any proof that will help in substantiating the “force majeure” in your situation,
- verify if all (contractual) procedures have been followed if you receive a notification of potential non-fulfilment and do not waive any claims or rights that you have,
- adapt the terms and conditions of any new contract/order to the current circumstances of your business,
- check the terms and conditions of your insurance contract(s).
Employment and social law facilities
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:
- (certain) employees perform activities which belong to one of the sectors which are considered to be particularly hit, as defined by the Minister of Work;
- the number of days of temporary unemployment due to force majeure (“corona”) or due to economic reasons during the second quarter of 2020 was at least equal to 20% of the global number of declared days to the National Social Security Office.
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.
Corporate law impact
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
- General meeting behind closed doors.:the Royal Decree provides the possibility for the management body to impose that the participants to every general meeting may only exercise their rights (i) by voting remotely prior to the general meeting, and (ii) by granting a proxy prior to the general meeting.
- Remote participation to the general meeting by way of electronic means of communication.
- Postponement of the (annual) general meetings, together with the extension by ten weeks of some other closely related deadlines. It is to be noted that not all general meetings can be postponed (e.g. general meetings to be convened in the event the net assets are, or risk becoming, negative cannot be postponed).
- Extraordinary general meetings of shareholders may take place. In addition to the notary public, only the physical attendance of either one member of the management body / another person authorized to this end or, in case a system of proxies is applied, the proxyholder, is required to sign the deed.
- Written general meeting of shareholders.
Possible options for the meetings of the (board of) directors
- Unanimous written resolutions: Any exclusion or limitation to this procedure in the articles of association shall not be taken into account for the period of application of the Royal Decree, which will in particular benefit the companies who have not yet brought their articles of association in line with the new companies’ and associations’ code.
- Meetings of the (board of) directors to be held via telephone or video conference call is a valid means of deliberation and decision making.
- Regarding resolutions that must be enacted in a notarial deed:, it suffices that one member of the management body (or a person authorized by the management body to this end) physically meets with the notary public.
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:
- as from the first day of the ninth month after the closing of the financial year, a contribution should be paid by the company in the amount of 400 EUR;
- as from the tenth month until the twelfth month, the contribution increases to 600 EUR ; and
- as from the thirteenth month after closing of the financial year the contribution increases to 1,200 EUR.
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.
Processing of personal data
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
- In principle, it is prohibited to process health data (a special category of personal data under the General Data Protection Regulation (GDPR)) unless you can rely upon one of the exceptions as provided for by Article 9.2 of the GDPR.
- Companies and employers can process health data if the processing is "necessary for reasons of public interest in the area of public health”. In doing so, companies and employers will need to continue to strictly adhere to the guidelines of the competent authorities.
Preventive measures taken by companies need to respect the general principles regarding the processing of personal data. In other words, companies and employers:
- may only collect personal data that is necessary for the intended purposes,
- may only process personal data in a transparent manner, taking into account the preventive measures,
- must implement appropriate technical and organizational security measures for the processing of personal data.
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.
- Carrying out systematic checks on the body temperature of visitors and employees of the company is authorized, as long as no additional registration nor processing of personal data takes place.
- It is not allowed to oblige your employees to fill out a medical questionnaire (including recent holiday destinations). However, it is acceptable that employees are encouraged to spontaneously report their symptoms and their travel to a risk area. In such cases, the involvement of the company doctor is emphasized by the Belgian DPA.
- A company cannot disclose the name of an infected employee further to the principle of integrity and confidentiality (see Article 5.1, f of the GDPR) and further to the principle of data minimization (see Article 5.1, c of the GDPR). However, it is allowed to inform employees of the fact that a colleague might be infected - without, however, disclosing the identity of the person involved.
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.
Public Procurement in case of a pandemic
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.
Coronavirus disease (COVID-19): Impact on commercial 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.