On 10 July 2018, the Dutch Senate agreed to a bill to compensate for the transition fee that is paid to employees on long-term sick leave upon dismissal. This act is expected to enter into force on 1 April 2020, but will also apply to ‘old cases’. In the future, employers can apply for compensation for fees that have been paid since the entry into force of the Work and Security Act on 1 July 2015.
The Compensation Transition Fee Scheme was published recently, containing more rules with regard to the application and provision of the compensation. What should employers reckon with so that they can make a successful application when the time comes?
Ground for Dismissal
No transition fee is due if a dismissal takes place by mutual consent. However, in many cases a fee will have been paid nevertheless. In such cases the employer may also be entitled to compensation, up to a maximum of the transition fee amount.
Termination agreements often give ‘difference of opinion’ as the reason for termination. However, the Compensation Transition Fee Scheme provides that the employer must submit documents with the application demonstrating that the employment agreement has been terminated due to long-term occupational disability. It is therefore necessary to state explicitly in the termination agreement that the reason for termination is the employee's long-term occupational disability.
Which documents are required?
The employer has to submit the following documents with the application for compensation:
- The employment agreement;
- Documents demonstrating that the employment agreement has been terminated due to long-term occupational disability. Examples are the permission of the UWV to terminate the employment agreement due to long-term occupational disability; the rescission ruling demonstrating that the employment agreement has been rescinded for that reason; or the settlement agreement;
- Where the employment agreement has not been terminated after permission from the UWV: a statement of the employer that the employee was ill at the time when the employment agreement ended, the period of illness, and the name of the company doctor;
- Salary slips specifying which salary has been paid during illness;
- The information that was used to calculate the level of the transition fee;
- Proof of payment of the fee.
Please note that the employer should enclose salary slips covering the entire period of illness. These may go back as far as 2013 or even 2012 in the case of a wage sanction!
Term for application
This compensation can be applied for as soon as the act has entered into force. As mentioned above, this is expected to happen on 1 April 2020. For old cases, employers will then have six months’ time to apply for the compensation. The UWV will get six months’ time to decide on such old cases.
