Employment issues in M&A transactions in Belgium

1. Check whether:

• there is a representative body, be it a works council, a trade union delegation or a health and safety committee. In principle, the works council has the authority to be informed and consulted. In the absence of a works council, the trade union delegation is considered competent. In the absence of either of these representative bodies, the health and safety committee takes over the competences of the works council;
• the share deal qualifies as a (public) takeover bid under the (Belgian) law of 1 April 2007 implementing the European ‘Thirteenth Directive 2004 / 25 on Takeover Bids’.

2. Prepare the following in draft form:

• a request for information and consultation for the attention of the works council;
• in case of takeover bid, a notification for the attention of the works council regarding the launch of the takeover bid; the works council (or the employees if there is no representative body) must also be sent a copy of the prospectus.

3. Inform / Notify

• the works council about the share deal;
• the works council about the takeover bid as soon as it is made public. If there is no representative body, the employees must be informed about the bid.

 4. Consult

• the works council about the consequences (if any) of the share deal or takeover bid for the workforce, employment policy and labour conditions.

5. Implement

• The works council does not need to approve the share deal or the takeover bid.
• The works council only has the right to offer advice regarding possible consequences for employees. Although there is no formal obligation for the employer to explain why the advice is not followed, if this is eventually the case, it may be advisable to do so, depending on the social climate.

1. Check whether:

• there is a representative body, be it a works council, a trade union delegation or a health and safety committee. In principle, the works council has the authority to be informed and consulted. In the absence of a works council, the trade union delegation is considered competent. In the absence of either of these bodies, the health and safety committee takes over the competences of the works council;
• the share deal qualifies as a (public) takeover bid under the (Belgian) law of 1 April 2007 implementing the European ‘Thirteenth Directive 2004 / 25 on Takeover Bids’. 

2. Prepare the following in draft form:

• a request for information and consultation for the attention of the works council;
• in case of takeover bid, a notification for the attention of the works council regarding the launch of the takeover bid; the works council (or the employees if there is no representative body) must also be provided with a copy of the prospectus.

3. Inform / Notify

• the works council about the share deal “in a timely manner and prior to any public release”;
• the works council about the takeover bid as soon as it is made public. If there is no representative body, the employees must be informed.   

4. Consult

• the works council about the consequences (if any) of the share deal or takeover bid for the workforce, employment policy or working conditions.

5. Implement

• The works council does not need to approve the share deal or the takeover bid.
• The works council only has the right to offer advice on the possible consequences for the employees. Although there is no formal obligation for the employer to explain why this advice is not followed, if this is eventually the case, it may be recommendable to do so, depending on the social climate.

1. Check whether:

• there is a representative body, be it a works council, a trade union delegation or a health and safety committee. In principle, the works council has the authority to be informed and consulted. In the absence of a works council, the trade union delegation is considered competent. In the absence of either of these representative bodies, the health and safety committee takes over the competences of the works council;
• the asset deal qualifies as a transfer of undertakings according to the (Belgian) national CLA no. 32bis (which implements European Directive 2001 / 23 / EC);
• in the event of a transfer of the assets of a company or a part thereof, employees are involved in the targeted part of the company on a structural basis;
• working conditions deriving from individual and/or collective bargaining agreements (including pension schemes) are applicable to the employees affected by the transfer.  

2. Prepare the following in draft form:

• a request for information and consultation for the attention of the works council;
• the wording of individual letters confirming the change of employer even though this is not mandatory (once the consultation with the works council is over, a more general notification is usually issued to all staff first).  

3. Inform / Notify

• the works council about the transfer, “in a timely manner and prior to any public release”.
• in case of a transfer of undertakings, if there is no representative body, prior to the transfer, the involved employees about:
  • the transfer date;
  • the reason for the transfer;
  • the legal, economic and social consequences of the transfer on employees;
  • the contemplated measures towards employees. 

4. Consult

• the works council about the consequences (if any) of the asset deal for the workforce, employment policy or labour conditions.

1. Check whether:

• there is a representative body, be it a works council, a trade union delegation or a health and safety committee. In principle, the works council has the authority to be informed and consulted. In the absence of a works council, the trade union delegation is considered competent. In the absence of either of these bodies, the health and safety committee takes over the competences of the works council;
• the asset deal qualifies as a transfer of undertakings under the (Belgian) national CLA no. 32bis (implementing European Directive 2001 / 23 / EC);
• in the event of a transfer of the assets of a company or a part thereof, employees are involved in the targeted part of the company on a structural basis;
• working conditions deriving from individual and/or collective labour agreements (including pension schemes) are applicable to the employees being taken over.

2. Prepare the following in draft form:

• a request for information and consultation for the attention of the works council;
• the wording of individual letters confirming the change of employer even though this is not mandatory (once the advice of the works council has been obtained, a more general notification is usually issued to all staff first).  

3. Inform / Notify

• the works council about the transfer.

4. Consult

• the works council about the consequences (if any) of the asset deal for the workforce, employment policy or labour conditions.

5. Implement

• the decision to transfer assets. In principle, all collective and individual working and salary conditions are maintained after the transfer. The transfer in itself may not lead to employment termination or a (unilateral) change of working conditions. After the transaction, the seller and purchaser remain liable for any obligations of the seller which existed prior to the transaction. These are included in the individual letters, depending on the date the transaction takes place.

Belgian employment law equates a merger with a transfer of undertakings: see Section B., ‘Asset Deal’.