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Recent employment lawdevelopments: harmonization & selfemployedLiesbeth de Crom and Noémie Niesten16 April 2013
Harmonization of white- & blue- collar statuses
Page 3Harmonization white- & blue- collar workersConstitutional CourtCase -125/2011Distinction white- &blue- collarunconstitutionalAction required:Harmonization ofstatusesDismissal & Waitingperiod in case of illnessDeadline: 8 july 2013Other areas of sociallawDeadline: not fixedIssues? Issues?Issues?
Page 4Harmonization in practice – the big picture“Upwards” harmonization“Downwards” harmonizationAcquired rights theorySalary freeze
Page 5Harmonization in practice – solutions?Global solution = hierarchy of the norms?Specific solution = Extralegal pension
Developments self-employed status - “LabourRelations Act”
Page 7Developments on self-employed statusISSUEIncorrectqualification ofprofessionalactivitiesRequalificationImpact
Page 8Developments on self-employed statusLabour Relations Act27 December 2006General criteriaSpecific criteria5/9 = employeeSectors?Ruling
Page 9General and specific criteria► General criteria:► the nature of the agreement asexplicitly chosen by its parties► freedom to organise working time► freedom to organise the agreedwork► impossibility of hierarchicalsupervision.► Specific criteria:► No financial or economic risk► No responsibility with respect to thecustomer’s financial means► No decision-making powerregarding the client’s purchasingpolicy► No decision-making power on thecustomer’s pricing► No obligation to reach results► Guaranteed fixed fee► No own personnel /possibility to bereplaced► Working mainly for one contractualparty► Office spaces, working toolsprovided by client
Page 10Administrative CommisssionRulingqualificationprofessionalactivitiesInitiative: either partyAdministrativeCommissionMax. 3months!Ruling on qualification:valid for 3 yearsPossiblerequalificationImpact!Appeal: labourcourts
Commuter and HQ FunctionsHuman Capital Fire Chat16 April 2013
Page 13Commuter & Headquarter functionsTypical cases► Project► Training program► Short term assignment► Frequent visitors / travel► Flex work pattern (1-2 d/week)► HQ functionCountry ofRESIDENCECountry ofEMPLOYEMENT
Page 14Taxation of employment incomeArt 15 OECD► General principle: country of employment (Host)► Exception:183 days in Host?Host ‘employer’?Host PE?< 183 days > 183 daysHOME TAXATION HOST TAXATIONNo permanentestablishmentPermanentestablishment in HostNegativeintegration test►Positive integrationtest►Additional factorsANDORORAND
General Anti Avoidance Rules(GAAR)Koen Bonnast and Yves Stox16 April 2013
Page 16General Anti Avoidance Rules (GAAR)LocalGlobal
Page 17Global – Risk Mitigation► Service levelagreement (TP)► Permanentestablishment► Assignmentagreement► Lease of staff► False posting► Form A1/E101► Limosa► Posting► SimultaneousemploymentSocial securityCorporate/individualtaxationAnti avoidance ruleAssignment to BelgiumWorking time pattern5% per countryCoherenceEmployer’s authorityIntegration in hostentity and cross-charging
Page 18Key postingconditionsEmployer’s authority – Company integrationCompany integrationLease of staffAnti avoidance ruleDecision makingpower by home/host► Dismissal► Who determines thenature of the work► Obligation with regardsto remunerationBinding forceForm A1
Page 19General Anti Avoidance Rules - OTCGlobal LocalPersonal income taxArt. 344 ITCSocial securityBy Royal DecreeConstitutional?► OTC options► Post terminationindemnity non-compete► …?