When an employee is on long-term sick leave, this can have consequences for both the employee and the employer. The employee may no longer be able to return to their previous job, while the employer is obligated to continue paying wages and make efforts toward the employee’s reintegration. But under what circumstances can the employment contract be terminated? And what happens if the reintegration process does not go well? In this blog, we explain the rules that apply to termination due to long-term disability.
Continued Pay and Prohibition on Termination
An employee who is sick is protected by law. During the first 104 weeks (2 years), the employer must continue to pay at least 70% of the employee’s wages, and the employee cannot be fired. A prohibition on termination applies during this time. Therefore, dismissal is not an option during this period. This may be different if the dismissal is unrelated to the illness, but that is an exceptional situation.
Termination via a settlement agreement (VSO) is possible under current circumstances, but only if the employee agrees to it. Given the risk that unemployment benefits may not be granted, this is not always advisable.
Reintegration and Wage Penalty
During the first 104 weeks of sick leave, the focus is on reintegration. In principle, this means reintegration into the employee’s original position, but reintegration into another suitable position or even with a different employer (Track 2) may also be an option. The law sets forth various rules regarding how employees and employers must interact during this period and what requirements must be met. These include obligations such as visiting the company physician or participating in reintegration activities.
It is therefore important for the employer to carefully fulfill its reintegration obligations and to properly document these efforts. For the employee, it is important to cooperate with reasonable reintegration obligations and to indicate in a timely manner when certain tasks are not feasible.
Termination After Two Years of Sick Leave
At the end of these two years, protection against dismissal and the obligation to continue paying wages generally expire. This point in time therefore constitutes grounds for termination. This may be different if the UWV decides to impose a so-called wage penalty. This option exists if the employer has not made sufficient efforts toward reintegration. The employer is then required, for up to one year, to keep the employee on the payroll, continue paying wages, and make further efforts toward reintegration.
Dismissal after this period is also not permitted if the employee is expected to be able to return to their regular duties within 26 weeks (half a year) thereafter.
ExploringRedeployment
Before an employer can terminate an employment contract, it must be determined whether the employee can be reassigned to another suitable position within a reasonable period of time. Training may also play a role in this process.
The assessment is not always limited to the employee’s own department. Depending on the situation, suitable positions elsewhere within the company or the group to which the employer belongs must also be considered.
The UWV procedure
If the employee has been on sick leave for two years, no wage penalty has been imposed, the employee is not expected to recover within six months, and the employee cannot be reassigned, the employer may submit a request for termination to the UWV. The UWV will then grant permission to terminate the employment contract if the employer meets all the conditions. The contract ends subject to the notice period. The time required for the UWV proceedings may be deducted from this period, provided that at least one month of the notice period remains.
In this case, the employee is entitled to a transition payment, for which the employer, under certain conditions, will be reimbursed by the UWV.
Termination with a Settlement Agreement
Instead of going through a UWV procedure, the employment contract can also be terminated via a settlement agreement (VSO). The employee must agree to this.
The employee may also request a settlement agreement (VSO) themselves, in which case the employer is required to offer one. In the agreement, the employer must offer at least the transition allowance.
Advice on Termination Due to Long-Term Disability
Termination due to long-term disability requires careful preparation. Employers must fulfill their reintegration obligations and investigate whether a transfer to another position is possible. Employees would be wise to thoroughly understand their rights and the consequences of a potential termination.
Our employment law attorneys advise both employers and employees on long-term disability and termination. We are happy to help you assess the options, risks, and next steps and determine an appropriate strategy.
