Reclaim transition payment after 2 years illness of the employee from April 1, 2020
From 1 April 2020, employers can reclaim the transition payment that they have to pay a long-term sick employee from the Dutch Employee Insurance Agency, UWV. The employer must file the request at the UWV within 6 months of the termination of the employment contract. It does not matter how the employment ended: by decision of the UWV, by verdict of the court or by means of a settlement agreement with mutual consent. This new regulation was published in the official journal of the government on 26 February 2019.
The scheme applies retroactively from the introduction of the statutory transition payment on 1 July 2015. This means that all employers who have paid a transition payment after 2 years of illness of an employee can still reclaim the payment back after 1 April 2020. At that time, the employer has 6 months, so until 1 October 2020 to reclaim this from the UWV.
It is important to archive all relevant correspondence and documents regarding the payment of the transition payment, including the documents that relate to the illness of the employee.
For instance, the employment contract, pay slips, proof that the employment contract has been terminated as a result of a 2-year illness due to a decision of the UWV or a decision of the subdistrict court judge must be provided to the UWV with the application.
If the employment relationship has been terminated by a settlement agreement, it will also be necessary to file it at the UWV together with the application. The application can be submitted digitally from 1 April 2020.
The application for compensation can relate to payments that are provided by the employer on or after 1 April 2020 (so-called structural cases), but also to payments that have been provided before (between 1 July 2015 and 1 April 2020) (so-called old cases). UWV will compensate only a maximum of the amount that is due after two years of illness. So if the employment contract is kept asleep after two years of illness the transition payment for the employer will increase but will not be compensated by the UWV. As long as the employment contract continues the amount of transition payment will built up.
For the structural situation, it has been determined that the compensation can be requested up to six months after payment of the full (transition) amount. If an employer has paid the transition payment in installments in accordance with Article 7: 673c (2) of the Dutch Civil Code, he can submit an application for compensation after the final payment.
It has been decided to arrange for old cases that an application must also be submitted within six months after this law will come into force. This will prevent a difference between employers who pay just before and employers who pay a (transition) payment shortly after the start of the legislation that applies upon termination of the employment contract.
Recently on 28 March 2019, the court in Den Haag decided in a lawsuit that keeping an employment contract asleep after two year of sickness and only to avoid paying the transition payment to an occupationally disabled employee (who had no chance of getting better and could not reintegrate) is contrary to the principles of being a good employer. The judge ruled that there is no need to keep the employment asleep in view of the new upcoming legislation. The employer was forced to end the employment, otherwise a penalty payment was due.
This is a change. Until now, the case law determined differently that an employee was not entitled to dismissal in order to receive the transition payment.
Would you like to know more about this new law? Please contact us.