How to react to non-payment by your employer?

Wage challenges are generally made in the following manner:

• a registered letter is sent to the employer to put him on notice to pay the amounts due within a period of eight or 15 days;
• if the disagreement persists, i.e. if the formal notice remains unanswered, the dispute will be brought before the Labour Tribunals by means of a petition for recovery of salary claims;

ATTENTION: Wages are subject to a three-year statute of limitations, which means that all wages that date back more than three years from the filing of the claim can no longer be claimed. They are therefore lost for the employee. This three-year statute of limitations applies not only to wages in the strict sense of the term, but also to all types of remuneration due to the employee.

• resignation with immediate effect: It is the case law that the systematic, persistent and repeated non-payment of salaries by the employer constitutes serious misconduct on his part making the resignation of the employee with immediate effect justified, whereas the main obligation of the employer remains that of paying salaries in return for the work performed by employees.

ATTENTION: Resignation with immediate effect leads to the termination of the contract, without entitling the employee to unemployment benefits unless the employee petitions the Labour Tribunal to establish the serious misconduct of his employer (on the merits) and applies to the Chief Judge of the Labour Tribunal to receive unemployment benefits on a provisional basis (summary proceedings).

How to claim back pay?

Remuneration is the direct counterpart of the work done by the employee for the employer. In principle, it corresponds to a cash benefit (salary, bonuses, premiums, etc.). In some cases it is combined with a benefit in kind (free accommodation, food, company car, etc.).

As a general rule, remuneration is freely determined by both parties, although there are certain benchmarks to be considered, such as the existence of a minimum social wage or remuneration scales provided for in certain collective labour agreements.

The salary is to be paid monthly, no later than on the last day of the calendar month worked.

In case of legitimate and urgent needs, employees may obtain an advance payment of the part of the salary corresponding to work performed.

Supplements to the salary are to be paid no later than within two months following either a year of service, the closing of a business year or the determination of the year’s results.

How does one claim compensation for outstanding leave?

Deferral of leave 

The law does not provide for deferring leave to the subsequent calendar year, except in two instances:

• the proportionate leave for the first year of employment with an employer may be carried over to the following year at the request of an employee;
• leave not yet taken at the end of the year due to service requirements and the substantiated wishes of other employees may be carried over to the following year within the legal time limit (by 31 March).

The carry-over of proportional leave from the first year of employment with an employer is unlimited in that it can be carried over to the following year.

On the other hand, the carry-over of leave not taken due to service requirements or the wishes of other employees is limited in time, whereas the leave carried over must be taken before 31 March of the following year. Agreements to the contrary between employer and employee may derogate from this principle and allow the leave to be carried over to the following year.

The law sets out two other assumptions regarding the postponement of legal leave:

• The period of maternity leave is considered to be a period of actual work and therefore entitles employees to annual recreation leave. The law provides that annual leave not yet taken at the beginning of maternity leave may be carried over within the statutory time limits.
• However, parental leave does not entitle employees to annual recreation leave. However, annual leave not yet taken at the start of parental leave is also carried over within the statutory time limits.

Leave not taken due to illness

Leave, which could not be taken before the end of the year due to prolonged illness, cannot be lost and is therefore carried over.

Contracts ending during the year

When the employment contract ends during the year, the employee is entitled to one twelfth of his annual leave for each full month worked.

Fractions of working months exceeding 15 calendar days shall be counted as a full working month.

If, after termination of the employment contract by either the employer or the employee, the employee leaves his employment before having taken the full amount of leave due to him, the compensation corresponding to the leave not yet taken shall be paid to him at the time of his departure, without prejudice to his rights to notice of dismissal.

If the employer fails to pay the unused leave allowance, the employee must give notice (see MT 4). If the employee fails to pay, he or she can take the matter to the Labour Tribunal.

How to claim severance pay?

This special amount is to be paid to an employee dismissed with notice who has at least five years of service at the time the notice period expires.

Years of service	Severance pay
5 to 10 years	1 month’s pay
10 to 15 years	2 month’s pay
15 to 20 years	3 month’s pay
20 to 25 years	6 month’s pay
25 to 30 years	9 month’s pay
30 years and older	12 month’s pay

Severance pay, which is exempt from taxes and social security contributions, increases progressively with the length of service. It corresponds, for example, to one month’s gross salary where length of service is between 5 and 10 years, to two months’ gross salary where length of service is between 10 and 15 years, etc.

If the employer fails to remit the severance pay, an employee can petition the Labour Tribunal, after having given notice to the employer without response.

How does one claim compensation in lieu of notice?

Although an employee may have received notice of termination, the end of the employment relationship does not take effect immediately, but only after the expiration of a certain period of time, which is determined according to the employee’s length of service on the day of notification of the dismissal.

Thus, the notice to be given by the employer is:

• Two months for less than five years of service;
• Four months for a length of service between five and 10 years;
• Six months for a length of service of 10 years or more.

The notice period starts on the 15th of the month, if the letter of dismissal is sent before the 15th. If the letter is sent between the 15th and the last day of the month, the notice period starts on the first day of the following month.

An employer who terminates a permanent employment contract without complying with the notice period is required to pay the employee compensation for notice equal to the salary corresponding to the notice period or, where applicable, to the outstanding part of this period.