Partnerblog
Introduction
In its judgment of 1 June 2026, the Court of Cassation ruled on two questions that regularly arise in employment disputes. Firstly, does the transitional two-step calculation of the notice period apply to an employee whose seniority dates from before 2014, but whose current employment contract only commenced after 2014? Secondly, may a court determine an employee’s bonus itself where the employer failed to discuss or set the bonus conditions as agreed in the contract?
The facts
An employee entered the service of the first employer on 10 April 2007. That employment contract was terminated by mutual agreement on 30 June 2014. Immediately thereafter, on 1 July 2014, the employee entered the service of the employer’s sister company under a full-time employment contract of indefinite duration.
On 11 July 2020, the new employer dismissed the employee for serious cause. By judgment of 26 July 2023, the Ghent labour court of appeal ordered the employer to pay an indemnity in lieu of notice equal to 7 months and 21 weeks, together with outstanding bonuses for the years 2018 to 2020. The employer lodged an appeal in cassation on both points.
Seniority before 2014 does not trigger the transitional two-step calculation
The Unified Status Act introduced harmonised notice periods for blue-collar and white-collar workers as of 1 January 2014. For employment contracts that were already running on that date, Articles 67 to 69 of the Act provide a transitional regime based on a two-step calculation. The notice period consists of two parts: one for the seniority accrued up to 31 December 2013 and one for the seniority accrued from 1 January 2014 onwards.
It was undisputed that the employee had retained his seniority dating back to 2007. Pursuant to Article 37/4 of the Employment Contracts Act, seniority acquired within the same undertaking is taken into account, and the sister company belonged to the same technical operating unit as the original employer. The concept of ‘the same undertaking’ is interpreted broadly in this respect.
The employer nevertheless argued that the labour court of appeal had wrongly applied the transitional two-step calculation. The Court of Cassation agreed. Article 67 of the Unified Status Act applies only where the terminated employment contract itself commenced before 1 January 2014. The fact that the employee had accrued seniority prior to 2014 is irrelevant in this regard.
Since the terminated contract only commenced on 1 July 2014, the transitional regime did not apply. The notice period had to be calculated solely in accordance with the rules applicable to employment contracts commencing on or after 1 January 2014, albeit taking into account the full retained seniority (as from 2007).
The court may determine the bonus where the employer fails to act
The employment contract provided that the parties would discuss the annual bonus every January. In practice, the employer never did so for the years 2018 to 2020.
The labour court of appeal found that the employer had failed to perform this part of the contract and that no negligence could be attributed to the employee. Pursuant to Article 1178 of the old Civil Code, a condition is deemed fulfilled where the debtor bound by it has prevented its fulfilment. The bonus amounts therefore had to be determined on the basis of the information in the case file.
In the absence of objective criteria, the labour court of appeal relied on the average of the bonuses actually paid in 2015–2017, being EUR 6,180.35 per year. Taking into account that 2018 had been a weaker year, it awarded a bonus of EUR 3,090.17 for 2018 and the full average of EUR 6,180.35 for 2019. For 2020, the year in which the employment ended, it awarded EUR 3,090.17 on a pro rata basis.
The employer argued that the court had thereby substituted itself for the employer, disregarding the binding force of the contract (Article 1134, first paragraph, of the old Civil Code) and Article 1178 of the old Civil Code. The Court of Cassation rejected this argument.
By failing to discuss the bonus conditions, the employer had committed a breach of contract. The judges determined the parties’ obligations with due regard to the contractual provisions and to the manner in which the parties had performed them. In doing so, they did not substitute themselves for the parties or for the employer, nor did they deprive the employer of its managerial discretion.
What does this mean for employers?
The judgment offers two useful lessons.
Firstly, when calculating a notice period, the decisive factor for the application of the transitional two-step calculation is the start date of the employment contract being terminated, not the employee’s seniority. This is particularly relevant for employees who have moved between companies within the same group after 1 January 2014. Their retained seniority still counts in full, but under the new calculation method only. If the parties wish to retain the old calculation method, this needs to be explicitly provided in the contract.
Secondly, employers who contractually commit to discussing or setting bonus objectives must actually do so. Failing that, they cannot rely on the absence of objectives to refuse payment. The court may then determine the bonus itself, for example on the basis of the bonuses paid in previous years. Employers are therefore well advised to set and document bonus objectives in a timely manner every year. Of course, the question remains if a court can decide upon the amount of a bonus if this was never paid before.
Do you have questions about this judgment, the calculation of notice periods or the drafting of bonus clauses? Please do not hesitate to contact our office. We would be pleased to advise you on the impact of this case law on your organisation.
The judgment: Court of Cassation, 1 June 2026, S.24.0016.N, available on juportal.be
