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Compensation employer for transition payment after long-term illness

Thursday 16 February 2017

There are (small) employers who choose not to terminate the employment contract with an employee who is unfit for work after two years of illness. Because the obligation to continue to pay wages has ended after two years of illness and the employee no longer performs any work, this is referred to as a dormant employment contract.

Some employers opt for 'dormant employment' so that they do not have to pay a transition payment. The cabinet is now working on a bill that will allow employers to receive compensation for the statutory transition payment in the event of dismissal due to long-term incapacity for work.

The government considers this justified, in view of the costs that employers already incur for, among other things, the

Margot Boehmer

the reintegration of their sick employee. It was recently announced that this arrangement will only come into effect in 2019. But please note, the Senate and House of Representatives must first approve this proposal.

This regulation may come into effect with retroactive effect. A tip from our legal affairs manager Margot Boehmer is therefore:   note for which employees a transition payment has been paid since 1 July 2015   after 104 weeks of illness. Then you will have it ready as of 1 January 2019.