Liability Employee Insurance Agency for incorrect pay sanction order limited till continuous payment of 70% of the wages

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Central Appeals Tribunal 25 March 2009,, ljn: BH9466


By order of 21 July 2003, the Employee Insurance Agency had imposed an extension of the obligation to continue paying wages with (at that time) four months on an employer, because of carrying out too less reintegration efforts with respect to the work disabled employee. The employer who lodged an objection and appeal, succeeded in his action during the appeal of the Employee Insurance Agency after all (possibly because pursuant to the case law of the Central Appeals Tribunal it appeared that the old pay sanction order was incorrect). In a new decision the objection of the employer was declared well-founded after all. Thereupon the employer withdraws his appeal and requests the Central Appeals Tribunal pursuant to the existing legal possibility for that, to order the Employee Insurance Agency to pay compensa-tion.

The Central Appeals Tribunal considers consistent with the former case law that with such requests for compensation the case law of the civil court must be followed and that the fixed case law of the Supreme Court is that by setting aside the original order both for unlawfulness required for an unlawful act and the wrongful act to that of the administrative authority is indisputable. However, the question is if all claimed compensation by the employer is a result of the unlawful decision of the Employee Insurance Agency. The employer has paid 100% of the wages during the four months of the extension of the obligation to continue paying wages, whereas pursuant to the law only 70% was obligatory. The Central Appeals Tribunal is with regard to that of the opinion that in principle just 70% of the wages can be imputed as com-pensation to the Employee Insurance Agency, plus the holiday allowance payable on this.


The judgment of the Central Appeals Tribunal is in conformity with several earlier judgments in this matter, done since 27 August 2008. The judgments which have been pronounced since then, concerned, insofar we can ascertain, always cases in which strictly speaking no obligation existed to continue paying more than 70% or in which that obligation was only based on its own regulation of the employer (see for last mentioned for example: Central Appeals Tribunal 1 November 2008,, lin: BG5001). However, there are collective agreements in which especially in the case of a pay sanction the employer is obliged to not continue paying 70% but 100% of the wages. In that case it seems to us that entitlement to compensation of paying loss based on 100% of the wages must exist. After all there has been talk of an obligatory payment for the employer which was just the result of the unlawful pay sanction decision of the Employee Insurance Agency. It cannot be considered why the civil judge would not base a compensation on 100% of the wages in such a case. Although the Central Appeals Tribunal speaks about compensation of “in principle” 70% of the wages and therefore it appears that there is still room for an exception, it would probably be better to claim the compensation via the civil judge in that case.

Besides, the Central Appeals Tribunal has in a decision of 25 February 2009 (, lin: BH6077) decided that the employer could only recover his loss from the Employee Insurance Agency after he has tried to reclaim the paid wages from the employee for undue payment. The Tribunal indicates thereby that the employee usually receives a WIA (Act on income according to capacity to work) benefit or unemployment benefit with retroactive effect after termination of the pay sanction order and therefore enjoys a double income. How far the employer must go if the employee refuses repayment of the undue payment is not clear, but it is in the best interest of the employer to urge the employee to give permission to the Employee Insurance Agency to transfer the to assign gross WIA or unemployment benefit to the employer after all. Generally the loss is covered with that and it also prevents all kinds of problems with the Employee Insurance Agency and the Tax and Customs Administration which arise when the employer wants to recover the gross wages plus the employer’s charges while the employee has received the net amount of course.

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