News

A previous bill comprised that employers could be indemnified, upon request, for payment of a (transitional) severance amount upon termination of the employment of a long-term ill employee (hereinafter: ‘the compensation plan’). This compensation plan has recently been specified. We hereby would like to inform you about the ‘what, when and how (much)’.

• What?

In short, compensation is possible if the employment agreement with an ill employee:

• is terminated by the employer giving notice after two years of incapacity for work by reason of such circumstance, or;
• expires (by law), or;
• is terminated through a settlement agreement by reason of long-term incapacity for work.

• When?

It is intended that the compensation plan will become effective as of 1 April 2020 and applies to (transitional) severance amounts which have been paid as of said date in one of the situations described above. This concerns the so-called new cases. However, the compensation plan also applies with retroactive effect, i.e. for (transitional) severance amounts paid between 1 July 2015 and 1 April 2020 in one of the cases described above. This concerns the so-called old cases.

• How?

In order to receive compensation as an employer you shall file an applicication at UWV via a form especially drafted for this purpose and availed by UWV. The application should be substantiated with documents which lead to entitlement to the applied compensation. The form itself states which further information and document should be provided to UWV, e.g. a copy of the employment agreement, salary specifications, notification of the first date of illness, proof of the paid severance amount, etc.

The application shall be made within 6 months following full payment of the (transition) severance amount. If the (transitional) severance amount is paid in installments, then the 6 months term will become effective after the last payment. This goes for the ‘new’ cases on or after 1 April 2020. If you apply for compensation of a (transitional) severance amount paid between 1 July 2015 and 1 April 2020, then the application should be received by UVW by 30 September 2020 ultimately.

In case of an incomplete application, UWV will allow you to complete the application. If the application is complete or has been completed, UWV will decide, in principle, within 8 weeks following the application in new cases and within 6 months in respect of an application based on old cases.

• How much?

The compensation equals the (transitional) severance amount paid, raised with deductible costs for prevention or reduction of the period of unemployment and/or deductible costs made during the employment for the sake of the employee to enable broader employability.

However, the compensation is limited to the (transitional) seerance amount which would be owed in case of termination after the two years waiting period, or if such sum is lower, continued payment of the salary during two years of illness.