9 March 2023

Franchising of supermarkets – what about employees ?

On Tuesday 07 March, it was reported that Delhaize will be handing over its last 128 stores to independent operators, making Delhaize a franchisor and the independent shop owners franchisees. While this is noteworthy, I want to focus on the labor law aspects of this operation. In this transition, employees of the various shops will effectively change employers. Their new boss will become self-employed, and how this works is regulated at the European level by EU Directive 2001/23.

In the 1970s, Europe recognized the need to ensure that the unification of the European market and resulting consolidation did not leave employees without protection. It was crucial to inform employees of company mergers and ensure they retained their rights. Above all, they should not be made redundant. These are still the main features of the current rules, including those governing transfers of undertakings, which is what will occur in this case.

These European regulations are being transposed into Belgian law through Collective Agreement 32bis on the protection of workers’ rights. According to this agreement, Delhaize cannot dismiss its employees in the context of the forthcoming transition. In a sense, Delhaize employees are protected against dismissal.

Furthermore, the agreement states that employees will automatically transfer with the store, maintaining all their employment conditions. If they do not want to go, their contract is automatically terminated without any severance pay. The joint committee, through collective agreements, regulates many rights and obligations, and there are potentially three joint committees applicable to the autonomous Delhaize stores: PC 201 for independent retailers, PC 202 for independent food retailers, and PC 311 for large retail stores.

Regardless, the existing terms and conditions of employment will transfer to the new employer, and employees will be covered by individual employment contracts. However, new (collective) agreements may change the terms and conditions of employment after the transfer.

Both Delhaize and the future independent shop owners must be aware of this. A lot of information will need to be provided, and if employment and working conditions are to change after the transfer, there will be both information and consultation required.

These will be hot days for Delhaize. It is important for the store and the preservation of its clientele that any social conflicts come to a quick end. As loyal customers of the brand with the lion, we hope so.


(picture A.Savin, WikiCommons)

share this news