The Council of State has strongly criticized a bill that seeks to limit the compensation scheme for transitional compensation for dismissal due to long-term disability to small employers. From July 1, 2026, under this bill, only employers with a relatively low wage bill will still be eligible for compensation. Specifically, this means that most medium and large employers will again have to pay the transition fee in full themselves.
𝗪𝗮𝗻𝗻𝗲𝗲𝗿 𝗯𝗲𝗻 𝗷𝗲 𝗲𝗲𝗻 “𝗸𝗹𝗲𝗶𝗻𝗲 𝘄𝗲𝗿𝗸𝗴𝗲𝘃𝗲𝗿”?
According to the bill, you are a small employer if the wage bill in the so-called reference year (two years earlier) does not exceed 25 times the average contributory wage per employee. For 2025, that average wage is set at €39,600, meaning that the limit is now around €990,000. Start-up employers are automatically classified as small in their first two years.
𝗪𝗮𝗮𝗿𝗼𝗺 𝗶𝘀 𝗱𝗲 𝗥𝗮𝗮𝗱 𝘃𝗮𝗻 𝗦𝘁𝗮𝘁𝗲 𝗻𝗲𝗴𝗮𝘁𝗶𝗲𝗳?
The proposal aims for structural savings of €380 million, but shifts the burden back to employers in about 80% of cases. The Council of State believes that the proposal has too little regard for the vulnerable position of long-term sick employees as well as for the financial burden already borne by employers. The Council also warns against a possible return of dormant employment contracts – in which employers do not terminate the employment contract to avoid the transition fee. The compensation scheme was introduced in 2020 precisely to avoid that.
𝗢𝗻𝘇𝗲 𝘃𝗶𝘀𝗶𝗲
As lawyers, we see in practice how complex and sensitive long-term disability processes can be. We have noticed that both small and large employers are already confronted with high costs in cases of long-term absenteeism. The compensation arrangement helps to complete these processes in a fair manner and offers clarity to both parties after a long-term illness. Letting this scheme lapse, in our estimation, leads to new legal bottlenecks and more uncertainty – for both employers and employees.
𝗪𝗮𝘁 𝘃𝗶𝗻𝗱𝗲𝗻 𝗷𝘂𝗹𝗹𝗶𝗲?
Is it right that only small employers will soon be compensated? Or, on the contrary, should the scheme continue to apply more broadly?
