Redundancy allowance for a closed business

Indemnité de fermeture/sluitingsvergoeding

Country	Belgium , applies nationwide
Time period	Open ended, started on 26 June 2002
Context	Restructuring Support Instruments
Type	Legislations or other statutory regulations
Category	Employment protection and retention – Income support for people in employment (e.g., short-time work)
Author	Dries Van Herreweghe (Katholieke Universiteit Leuven) and Eurofound
Measure added	23 June 2022 (updated 04 December 2024)

Background information

Any employee facing a company closure is entitled to several forms of income protection. One example is the redundancy allowance, which is a form of severance compensation or 'closure compensation'. This compensation is in addition to the 'traditional' severance payments that exist, such as: severance pay, social security benefits and special compensation due in case of dismissal of protected workers.

Content of measure

The redundancy is calculated based on seniority and age. The redundancy should be paid by the company however, if the company cannot do so, the compensation is paid by the Company Closure Funds. The funds are financed by employer's contributions and trustees.

Compensation is available to employees who have been dismissed from a company preceding (12 months for blue–collar workers and 18 months for white–collar workers) or consecutive (12 months after, or up to 3 years for white–collar workers who take part in liquidation proceedings) to its closure. The company must have employed, on average, 20 workers during the calendar year of its closure.

For companies closing after 1 May 2024 the redundancy allowance amounts to €198.48 for each year of seniority in the company up to a maximum of €7759.05. To take into account the personal situation of the employees, an additional premium is available for employees over 45 years old. For each year above 45, and if they were active in the current company, they will receive an additional €198.95.

The National Employment Office is responsible for the management of the Company Closure

Use of measure

More information can be found in ERM legal database

Target groups

Workers	Businesses	Citizens
Employees in standard employment	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
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

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