Newsletter 2024 – 01

2 Rush Hour HR – March 12, 2024 – 7:45 a.m. – 4Wings (Westerlo)

Limburg.net has been hacked. The hacker stole more than 300,000 customer records. These records reportedly included addresses, national registration numbers, and information about payment plans, debt mediation services, and court documents.

How do we, as a company, handle employee, customer, and supplier data? What do we do with, for example, track & trace data, site registration data, job applications, recorded images, mailboxes of (former) employees, and so on?

Afterwards, in the first part, we will delve deeper into the theory and legislation regarding GDPR.

After the break, we'll review a wide range of practical examples and answer all your questions. Do you have a case study you'd like to share? Send your question to westerlo@mploy.be.

The end is expected around 11am.

Besides the live edition on-site, you can also choose to follow it online. You'll have to provide your own delicious breakfast, though.

Participation costs €50 (excluding VAT). You can here register

3 Jurisprudence – RSZ contributions – target group reduction

Revoking the right to target group reduction based on information from public databases? Not too hasty!

Ghent Labour Court (Bruges division) 10 November 2022, TGR 2023, 151-164

Our labour courts and tribunals regularly rule on disputes in which the target group reduction is central. A typical dispute presents itself as follows: an employer hires his first employee and applies – whether or not on the advice of his social secretariat – for a target group reduction. At the time of such an application, no a priori check takes place as to whether the employer meets the legal conditions to benefit from this reduction. Checks on this only take place afterwards, and sometimes up to three years after the reduction has been granted.

A granted contribution reduction is therefore not acquired. This can sometimes be a rude awakening for employers who, in complete good faith, have used the contribution reduction and then suddenly receive a letter from the RSZ stating that they have made improper use of it and are still required to pay the unpaid social security contributions. Disagreeing employers can, of course, take the matter to the labor court, but in the meantime, existing budgets are being jeopardized and great uncertainty reigns.

The main reason for the RSZ to cancel a target group reduction is that the intended objective of increased employment is not being achieved. According to the law, increased employment must be measured at the level of the "technical business unit" of which the applicant is a member. Until recently, this crucial concept was not legally defined. Only through the parliamentary preparations could one deduce that the legislator wanted to avoid a situation where a mere change to the employer's legal status, without actual job creation, would trigger the right to a target group reduction. Enter the case law.

To determine the existence of a "technical business unit," the courts require the simultaneous presence of both social and economic criteria. Specifically, the labor courts will examine whether there is a social and economic connection between the targeted companies.

Social cohesion generally occurs when the same employees have worked in both companies or if there are common directors.

Economic interdependence refers to the business activity within the targeted companies and whether it is identical, similar, or at least complementary. This is where the shoe pinches. Rather than conducting an investigation in the field, the RSZ primarily relies on information found in various public databases: the Crossroads Bank for Enterprises (CBE), the Nacebel code, the corporate purpose of companies as evidenced by the Belgian Official Gazette, Dimona declarations, and so on. As soon as sufficient data points in the same direction, the RSZ deduces economic interdependence. Interviewing directors or employees or conducting a company visit then seems unnecessary.

However, companies are dynamic organizations that must constantly adapt to an ever-changing environment. The actual situation on the ground often loses out to the static information stored in various government databases. Late updates to previously stored government data risk being paid for in cash. Moreover, not all corporate data available to the government is equally useful for resolving discussions about target group reductions, as will become clear below.

When reviewing published case law, one cannot escape the conclusion that the labor courts attach great specific weight to the information stored by the government, which they assume provides a true picture of actual business activity.

The judgment of the Ghent Labour Court of 10 November 2022 is therefore a welcome exception to this rather negative trend in case law for companies.

In this case, the National Social Security Office (RSZ) inferred the existence of economic interdependence based on the fact that the two targeted (fashion) companies bore the same Nacebel code. The Nacebel code is the Belgian variant of a European-based nomenclature (“the Nace code”) that allows companies to be classified into sectors. The assignment of the Nacebel code is carried out by the RSZ (RSZ Statistics Department) based on the data provided by the company. It confers no rights on companies, nor does it impose any obligations on them. It serves primarily as a tool for compiling economic statistics and overviews.

In the case before the Labor Court, the first company was active as a manufacturer of its own clothing line and distributor through retail, while the second company was a traditional women's boutique. Both companies had the same Nacebel code, which, according to the RSZ (National Office for Social Security), demonstrated economic interdependence. The Labor Court disagreed, ruling that the two companies "((...) cannot simply be lumped together for the simple reason that they both operate in the same (fashion) sector. The respondent (RSZ, ed.) has focused blindly on a few theoretical aspects, while actual business activity should be the guiding principle."

Every decision by the RSZ to cancel a target group reduction must be preceded by a thorough investigation. Combining information already available to the government can certainly play a role in this, but this form of data analysis does not absolve the RSZ of its obligation to conduct a more thorough investigation, especially in the event of a dispute.

Finally, since January 1, 2022, the legislator has legally defined the term "technical business unit." It is the unit consisting of multiple legal entities, with a demonstrable social bond through a single common person, regardless of their position within those entities, and with a commonality that manifests itself in a simultaneous or historical socio-economic interdependence, or referred to as a simultaneous or historical technical business unit (Article 343 of the Program Act (I) of December 24, 2002, as introduced by the Program Act of December 27, 2021). The concerns formulated above remain valid even after this amendment.

Steven Renette, lawyer-partner
steven.renette@mploy.be