Employer was not Allowed to Discontinue the Sickness Benefit

Despite accusations that a former employee had not been cooperative in his reintegration, his employer, a self-insurer, was not allowed to discontinue payment of the Sickness Benefit, because he had not got the UWV permission first.

An employee working for a self-insured employer for the Sickness Benefit had left the employment while he was ill. As a result, the employee was entitled to a Sickness Benefit, which the employer, being a self-insurer, had to pay himself. The employer had already paid the Sickness Benefit for one year when he decided to discontinue the payment. Initially the reason for this action was that the UWV had recovered an unduly paid allowance from the employee and that the employer had set the amount of the recovery off against the Sickness Benefit. At a later stage, the employer had discontinued the payment because the employee had threatened the occupational physician, after which the latter had refused to see the employee again.
Then the employee's lawyer claimed in summary proceedings continued payment of the wages with a statutory increase for late payment and the statutory interest. At the hearing, it appeared that it should be understood as continued payment of the Sickness Benefit.

As for the settlement of the recovery by the UWV, the Sub-district Court concluded that the employer should in any case have taken the protected earnings rate into account.
Since it had been the employer's fault that the amount of the protected earnings amount (PEA) had not been determined, the Sub-district Court granted the employee's claim. According to the Sub-district Court, the question of whether the employee had complied with his reintegration obligations was irrelevant, since the employer, as a self-insurer, was not allowed to pay less than the full amount of the Sickness Benefit without a prior UWV decision.
The claimed statutory increase was rejected because it is only due where it concerns payment of wages and not payment of the Sickness Benefit. In the end, the employer was ordered to pay the Sickness Benefit with the statutory interest. When doing so, the employer was allowed to set off the UWV claim against the part of the future Sickness Benefit payments that exceeded the PEA.

Based on the most recent UWV information, only a little more than 3% of the employers are self-insurers under the Sickness Benefits Act. But this small group of employers accounts for almost half of the wage bill of all employees in the Netherlands. Mainly the relatively large employers represent the self-insurers.
Self-insurers pay the Sickness Benefits themselves to employees who left their employment while being ill and they are also responsible for the reintegration of these former employees. If they are a large or medium-sized employer, being a self-insurer shields them from the obligation to pay the tax authorities an increased differentiated contribution as a result of the sickness benefits of their former employees. By actively taking on their former employees’ reintegration themselves, they can have a favourable influence on the amount of the Sickness Benefits to be paid.
In practice, however, employers, as well as lawyers specializing in labour legislation, often prove to know little about the “technique” of self-insurance. This is also apparent from the Sub-district Court’s judgment in the above case, in which, from a legal point of view, all parties involved were wrong.

The employer had discontinued payment of the Sickness Benefit when the employee did not cooperate with his reintegration. This would have been the correct action in a period in which the employer continues to pay the wages to the sick employee, but it is not correct in a period in which the self-insurer pays the Sickness Benefit to the former employee.
Instead, the employer should have requested the UWV for a decision to impose a measure. In that case, the UWV would have made a decision in which the former employee’s Sickness Benefit would have been reduced by 25% for four months.

Furthermore, the employee should not have claimed payment of the Sickness Benefit from the Sub-district Court, and certainly not continued payment of wages, nor the statutory increase for the late payment. Instead, he should have addressed the UWV and asked it to take over the payment from the self-insurer. The self-insurer pays the Sickness Benefit on behalf of the UWV and the law stipulates that the UWV takes over this payment obligation if the self-insurer does not comply with it, after which the UWV will recover the amount of the Sickness Benefit from the self-insurer.

And finally, the Sub-district Court should have declared the application for continued payment of the Sickness Benefit inadmissible because it is not the Civil Court but the Administrative Court that has the jurisdiction to hear the application for payment of the Sickness Benefit.