Law of July 23rd 2015 amending the Labour Code and the Social Security Code as regards the mechanism for internal and externa…

The precursor to this law dates back to a judgment of the Court of Cassation of 28thNovember 1996. Prior to this decision, article 187 of the Social Insurance Code declared an insured person as having a disability if, as a result of prolonged sickness, infirmity or exhaustion, such person was not able to carry on his/her profession. To qualify for a disability pension, it was sufficient if one of these conditions was met.

The aforementioned judgment held that the conditions to be satisfied in order to establish disability were twofold: recognised incapacity for the previous job and an inability to exercise any other occupation for which the insured person had the requisite skills and know-how.

Subsequent to this court decision, the volume of disability pensions which were granted had declined significantly, whereas the number of persons in prolonged sick leave had increased.

In practice, as soon as the period of legal protection against dismissal (26 weeks) had passed, the contract of employment was often terminated. In case of a dispute over disability, the insured person was not entitled to unemployment benefits, since by his/her own action he/she invoked his/her inability for the labour market.

With the right to financial benefits then exhausted, there remained only the use of guaranteed minimum income.

With the dual aim of improving the social protection of insured people who are unable to exercise their most recent profession, and in order to maintain the maximum number of persons in employment, the legislator had introduced new legislative interventions, to initiate internal or external professional redeployment – the law of 23rd July 2015, amending the Labour Code and the Social Security Code as regards the mechanism for internal and external redeployment (hereinafter the “Law”).

The Law entered into force on 1st January 2016.

The new rules which will affect employers and employees are as follows:

Simultaneous referral to the mixed commitee and the occupational physician in order to accelerate the procedure

After the retention period of remuneration by the employer, the employee receivessickness benefits from the National Health Fund.

If the reported period of incapacity reaches six weeks, then during a reference period of sixteen weeks, the Social Security Medical Inspectorate (“Contrôle médical de la sécurité sociale”, hereinafter “CMSS”) requests the insured person in writing, to return the medical report of his physician.

To date the CMSS notified the mixed committee (“Commission mixte”), who then referred the matter to the occupational physician in a case where a person was required to present a disability to perform the tasks corresponding to his/her last job; however it is now the CMSS, in agreement with the person concerned, who solicits the mixed committee and the competent occupational physician. 

This new procedure allows for a quicker analysis of the conditions for professional redeployment, as it speeds up the timing for when the mixed committee takes a decision:

  • The occupational physician calls the concerned person and checks whether he/she is able or not to perform the tasks corresponding to his/her last job. The physician provides his/her advice to the mixed committee inside a 3 week period after the matter has been referred to him.
  • It is on the basis of this medical advice that the mixed committee takes its decision, within a period of 40 days, on whether a person shall be redeployed or not. It is also the mixed committee who decides whether a person shall be redeployed internally or externally.

Internal redeployment

If the employee is declared unable to perform his/her job, the employer must propose an internal redeployment if the following 3 conditions are met :

  • the employer hires at least 25 employees (prior to the adoption of the Law, the employer needed to employ at least 50 employees);
  • the concerned employee was performing a high-risk job; and
  • the concerned employee has been employed for at least 10 years.

Furthermore, the assimilation of redeployed employees to disabled employees has disappeared. This means that the employer will no longer be able to plead that he/she is already employing a given number of handicapped persons or persons with comparable disabilities in order to claim, exemption from this obligation.

If the employer refuses to carry out an internal professional redeployment, he/she may be required to pay a compensation tax to the National Health Fund for employment. This compensation tax will be equivalent to the amount of the employee’s former contributory income referable to pension insurance for a maximum of 24 months.

Regular medical examination

The Law sets up regular medical examinations for every redeployed employee. The employees must be seen by the occupational physician at least every two years, unless the medical restrictions are definitive in nature. Anyone who evades this medical examination will be stripped of the cash benefits linked to the redeployment and the specific status for external redeployment.

If the occupational physician decides that the employee has partially or fully regained his/her former fitness for work, he/she will refer the matter to the mixed committee.

Consequences for the redeployed employee

Protection against dismissal

Under the old law, the protection against dismissal started on the day when the mixed committee informed the employer about his/her decision on whether he/her must reclassify an employee and expired on the 12th month which followed.

Pursuant to the Law, the employee benefits from a protection against dismissal as from the date when the matter is referred to the mixed committee until the expiry of the 12thmonth following the notification to the employer of the decision to carry out an internal professional redeployment.

Nevertheless, this protection against dismissal does not cover the employee’s dismissal on grounds of gross misconduct.

Reduction of the working time

In the event of an internal redeployment and on the advice of the occupational physician, the employee’s working time may be reduced to 50%, or even to 25% of he time specified in his/her employment contract.

The final decision remains with the mixed committee, who will decide on the application for the working time reduction on the basis of the advice of ADEM’s occupational physician.

Wage compensation

If the redeployment implies a reduction of the previously received wage, the employee is entitled to a compensatory allowance.

The Law simplifies the calculation of the compensation by taking as a reference the contributory income under pension insurance. The compensatory allowance representing the difference between the average monthly contributory income under pension insurance realised during the twelve calendar months preceding the decision on the redeployment and the new monthly contributory income under pension insurance.

Specific status for the externally redeployed person

This status will enable the concerned person to accept a new job whilst retaining his/her rights for as long as he/she has not regained his/her previous fitness for work. As soon as the concerned person regains his/her former fitness for work, he/she will no longer benefit from this specific status.

Furthermore, the employee who is redeployed externally, and who then loses his/her new job for a reason beyond his/her control, keeps his/her status of external redeployment, provided that he/she will register as a jobseeker to the ADEM, within a period of 20 days from running from the end of the employment contract. The same rules applies to any person for whom an external redeployment has been retained, but nevertheless remains unemployed.

Tide-over allowance for the externally redeployed person

At the end of the statutory period for payment of unemployment benefit, a tide-over allowance may be claimed by a person

  • who has been redeployed externally; and
  • who has been working for at least 10 years at his/her previous job, or who has a length of service of at least 10 years.

The amount of the tide-over allowance corresponds to 80% of the average monthly contributory income referable to pension insurance received during the 12 calendar month period preceding the professional redeployment decision.

The tide-over allowance will be subject to applicable tax and social charges on wages, and will therefore be taken into consideration when calculating the pension. It will be paid by the pension institution and by the Employment Fund.