Background information

In some cases of bankruptcy it occurs that a bankrupt company is taken over, in whole or in part, by a third party (generally called "the transferee"). In order not to diminish the chances of success of these takeovers a specific measure is in place whereby the transferee is not subject to the same obligations as those provided for the transferee in case of a regular/complete transfer of the enterprise.

Content of measure

The transition allowance ensures an equivalent wage to the dismissed workers until rehired after the takeover of a bankrupt company for up to 6 months. The allowance is paid by the Business Closure Fund and is equivalent to the worker's gross salary before bankruptcy up to a ceiling fixed by law. The maximum amount of the bridging allowance is equal to the global ceiling established by the fund (€25,000 since 1 January 2009) minus the amounts of the payments made by the fund for wages, allowances, benefits and holiday pay.

The Business Closure Fund is financed for the most part by the companies themselves, that have to pay a percentage of their wage bill and forms a part of their obligatory social contributions. Another (smaller) part is funded by the Belgian state.

Unlike in the case of a conventional transfer, the prospective employer chooses which employees he wishes to take over after the bankruptcy. The principle is that the protected employee cannot demand to be preferably hired. All employees are on an equal footing.

The employee, too, is free to choose whether or not to enter into the employment of the acquirer. His or her refusal does not in any way affect the employee's rights vis-à-vis the transferring company, such as the severance pay, the end-of-year bonus, etc.

Use of measure

In 2017, the fund paid 21,772 employees from 3,475 different companies.

Target groups

Workers	Businesses	Citizens
Unemployed	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Public employment service	Companies National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Unknown	Unknown
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: Unknown

Involvement

Unknown

Views and reactions

Unknown

Sources

• 07 June 1985: werk.belgie.be (werk.belgie.be)