After being fined by the European Court of Justice for failing to implement a directive on time, Belgium finally has a new employee consultation procedure for small and medium-sized companies. Frederique Gillet reports

European Directive 2002/14/C aims to establish "a general framework setting out minimum requirements for the rights to information and consultation of employees in undertakings or establishments within the Community". The Directive, adopted on 11 March, 2002, gives each member state a choice in whether to implement this information and consultation process within undertakings, employing at least 50 employees in any member states, or within establishments employing at least 20 employees in any member states.

According to the Directive, the information and consultation process specifically covers economic issues and issues that affect employment:

• 'information on the recent and probable development of the undertaking's or the establishment's activities and economic situation';
• 'information and consultation on the situation, structure and probable development of employment within the undertaking or establishment and on any anticipatory measures envisaged, in particular where there is a threat to employment'; and
• 'information and consultation on decisions likely to lead to substantial changes in work organisation or in contractual relations'.

Under Belgian law, the information and consultation process in relation to economic and employment issues mainly takes place within works councils.

Works councils are compulsory in undertakings employing an average of at least 100 employees. Undertakings with between 50 and 100 employees must set up a committee for prevention and protection at work, which is mainly responsible for health and safety issues.

Works councils and committees for prevention and protection at work are elected. The election process is commonly designated as 'the social elections'. The election of both bodies take place at the same time.

Social elections to the works councils and committees for prevention and protection at work are normally held every four years. To establish whether an undertaking has to hold elections, the average workforce is calculated for the year before the elections are due to take place. Debate between the trade unions and the employers' representative associations on how to incorporate the Directive into Belgian law has been raging for several years.

Between them, the trade unions and the employer's representative associations devised various solutions. A notable consequence of these discussions was the protection of employee representatives on the works councils and committees for prevention and protection at work.

All candidates in the social election are accorded specific protection against dismissal (making it particularly difficult to terminate their employment contracts), violation of which carries the penalty payment of a maximum amount of eight years' salary. The trade unions proposed to reduce the threshold of 100 employees applicable for the election of a works council to one of 50 employees. This proposal would have entailed the obligation, for this specific category of companies (i.e. employing an average of at least 50 employees), to organise two elections: one for the works councils and one for the committee for prevention and protection at work. Unless legislation protecting employee representatives was modified, this would have massively increased the number of protected employees (up to 48 out of a total of 50 employees, in a worst case scenario). Such a situation would have been disastrous for this specific category of companies, because it would remove any flexibility to deal with a changing economical environment or employee performance.

Although the Belgian state was expected to implement the Directive by 23 March, 2005, this obligation was not met. As a result, the European Court of Justice imposed substantial fines on the Belgian state in November 2007.

Belgium's Parliament must adopt a specific law for the social elections to take place. The issue of the implementation of the Directive was raised again, when the law was adopted to hold the May 2008 elections. However, the interim Belgian Government, trade unions and employers' representative associations decided to continue with the then applicable principles, i.e. organising social elections for the works council within technical operating units with an average of at least 100 employees, and for the committee for the prevention and protection at work within technical operating units with an average of at least 50 employees in 2007.

At the same time, in November 2007, trade unions and employers' representative associations signed an agreement to improve social dialogue in Belgium – accepting the full implementation of the Directive. In order to avoid the application of the fine imposed on the Belgian state, the social partners asked the Minister of Employment, Labour and Social Dialogue to inform the European Commission of the agreement.

This agreement, reached at the end of last year between the social partners, was partially enforced by the law of 23 April, 2008 as well as by the collective bargaining agreement (CBA) no. 9 of 27 February, 2008, which was enforced by a Royal Decree on 5 June, 2008. It provides the following solution.

Firstly, for companies employing between 50 and 100 employees, within which a committee for prevention and protection at work has been elected, the current 100 employee threshold before a works council can be formed remains unchanged. However, some of the traditional responsibilities of works councils will have to be exercised by the committee. It will thus be entrusted with safeguarding the information and consultation rights resulting from the Directive. The law of 23 April, 2008 explicitly lists the information with which the committee must be provided. This information has to be given by the employer within the two month period following the election of the committee, i.e. by end July 2008 for this year's elections.

Secondly, in companies without a social body, i.e. employing less than 50 employees, but in which the workforce is represented by unions, the union representatives must be provided with annual economic information. The union delegation must also be informed of – and consulted on – decisions with implications for employment and work organisation.

Finally, for companies of between 20 and 50 employees, but falling under the scope of labour joint committees (these are permanent bodies at sectoral or sub-sectoral level on which representative employers' associations and trade unions are represented) within which there are no agreements with regard to trade union representation. The social partners call on the joint committees to reach agreements on which information should be communicated and how this will be undertaken.

Frederique Gillet is an employment, pensions and benefits lawyer at DLA Piper in Brussels.