Sick employees and the transition payment
Is an employer obliged to terminate the employment contract of a sick employee after two years of illness, with the consequence that the employee is entitled to receive a transition payment?
That is a question that has concerned many employers and sick employees recently. On 11 April 2019 the subdistrict court of Roermond, at the request of the insurer Stichting Achmea Rechtsbijstand, had submitted a request to the Supreme Court for a preliminary ruling for clarification on the problem concerning inactive employment. The conclusion by the Advocate General in this case was published on 18 September 2019, and finds in favour of sick employees.
Conclusion of the Advocate General in the case before the Supreme Court
The Advocate General concluded on 18 September 2019 (ECLI:NL:PHR:2019:899) that the starting point is that employers are obliged to terminate an inactive employment contract, unless the employer has a justified interest in maintaining the employment contract. The Advocate General refers to a number of examples that constitute a justified interest:
- the genuine possibility that the employee can be reintegrated, so that the employer has an interest in keeping the employee in its employment;
- for the period until the Transition Payment (Compensation) Act (Wet compensatie transitievergoeding) enters into force: financial problems for the employer because it has to prefinance the transition payment;
- that fact that the transition payment will not be compensated fully, or not at all compensated. A distinction could be made here between circumstances (due to the transition payment not being partly or fully compensated) that are within the employer's responsibility, and circumstances that are within the employee's responsibility;
- possible other interests of the employer in keeping the employee in its employment, other than merely the desire not to have to pay the transition payment.
It would therefore be necessary to examine on a case-by-case basis whether the employer has a justified interest in maintaining the employment contract and not paying a transition payment.
Awaiting the Supreme Court’s decision
The Supreme Court does not have to concur with the Advocate General's conclusion. It is simply a matter of waiting for the Supreme Court's ruling. It will be interesting to see whether the Supreme Court concurs with the Advocate General, and which justified interests it will give as examples.
The conclusion of the Advocate General would appear to be in line with the approach taken by the District Court of Gelderland in preliminary relief proceedings that were brought by a sick employee, where the ruling of the Supreme Court could not be waited for because the employee was to retire very soon (ECLI:NL:RBGEL:2019:3440).
Jim MargrySenior Associate Attorney at law
Jim Margry, attorney at law (senior associate), is a member of the Employment & Benefits Practice Group. He has all-round experience in employment law, with a particular focus on the employment law aspects of M&A-deals, restructurings and collective dismissals, co-determination procedures, cross-border labour and employee participation structures.T: +31 20 578 56 31 M: +31 6 22 09 52 11 E: firstname.lastname@example.org