Compensation scheme on dismissal due to long-term incapacity for work

Since the introduction of the Wet werk en zekerheid (Work and Security Act), there has been much ado about “dormant employment relationships”: the relationships of employees who have been incapacitated for work for more than two years. In light of the entitlement to the transition payment, employers often maintained those employment relationships after the waiting period.  

The Wet compensatie transitievergoeding (Compensation for Transition Payment Act) is now a factAs of 1 April 2020, employers who have terminated the employment relationships of employees after long-term incapacity for work and have paid the transition payment may apply for compensation for those payments at the UWV (Employee Insurance Agency). That may be done retroactively in the case of employment relationships that have ended since 1 July 2015 (the date on which the Work and Security Act entered into force). It is irrelevant whether the employment relationship ended by means of the UWV procedure or in the form of a settlement agreement. Information on the documents that must be submitted to the UWV can be found here. 

Since the adoption of the Compensation for Transition Payments Act, several employees with dormant employment relationships have again applied to the court and requested it to terminate their employment contracts while awarding the transition payment. Courts have ruled differently on the question whether an employment contract may be maintained after two years of incapacity for work. 

The Court of Roermond requested the Dutch Supreme Court on 10 April 2019 to issue a preliminary ruling on dormant employment relationships. The Supreme Court is expected to clarify the situation this autumn. We will keep you posted. 

Please contact Lise van den Heuvel for more information or advice on this subject.

This article was published in the Newsletter Vestius of July 2019