As you may know, Belgian employment law is quite complex (specifically concerning retirement). The fact that some misconceptions exist does not make it easier. Among those misconceptions, we find the supposed “automatic” termination of the employment agreement in the framework of the pension of an employee.
In Belgium, the legal retirement age is set at:
– 65 years for retirements until 31.12.2024 included;
– 66 years for retirements as from 01.02.2025 until 31.12.2029 included;
– 67 years for retirements as from 01.02.2030.
Some employees can retire before reaching the legal retirement age provided that some conditions are fulfilled (long career, heavy profession, etc.).
Many employer and employees believe that from the moment the employee has reached the required retirement age, the employment agreement ends automatically. That is not the case. In order for the employment contract to end, either one of the parties (by way of a notice period or an indemnity in lieu of notice) or both parties together (by mutual agreement) must take the initiative to terminate the employment agreement. So… basically like most other situations where you would like to terminate the employee’s employment agreement.
Kindly note that, in case of retirement, the parties usually terminate the employment agreement by mutual agreement. This is a simple (preferably written) agreement which confirms that the parties will terminate the employment agreement on date X. In that case, no notice period has to be performed and no indemnity has to be paid.
If you don’t conclude such an agreement with your employee, make sure that one of the parties provides the other party with the termination letter in due time so that a notice period will be performed. Please note that shorter notice periods may apply for the employer depending on the employee’s age.
If the time of retirement comes but no mutual agreement has been concluded and no termination letter has been provided in due time either, an indemnity in lieu of notice will be due in order to terminate the employment contract immediately. This indemnity equals the salary for the period that normally should have been respected as a notice period.
Lastly, the formalities regarding the end of the employment agreement in case of a retirement will be the same as in other cases of termination, e.g. a departure holiday pay will be calculated, the end of service documents will be drafted etc.
If you would like more information on this topic or if you need assistance in view of drafting the mutual agreement, Pro-Pay can advise you on this matter. You can use the contact sheet to reach out to them.