Equitable Remuneration for Seriously Ill Employee’s Contract Termination during the Probationary Period

An employer who had terminated the contract of an employee with lung cancer during her probationary period had to pay high equitable compensation to this employee since dismissing this employee was seriously culpable.

A nursing home had entered into an employment contract with an employee for a period of one year starting on 1 May 2022. On 7 March 2022, the employee reported sick to her -at the time- current employer because she had been diagnosed with a serious form of lung cancer. By means of telephone contacts with the new employer, the employee's husband informed the employer about this.
By letter of 28 April 2022, so even before commencement of the new employment contract, the employer terminated the employment contract, invoking the probationary period clause in the employment contract. In the letter of termination the only reason given for termination of the employment contract was that the current situation did not allow for another decision.
The employee contested the dismissal because, in her view, it was contrary to the prohibition of discrimination on grounds of a disability or chronic illness. According to the employer, however, the dismissal was given because of an announced recruitment freeze due to an intended reorganization.
When the case was submitted to the Sub-district Court, the Court concluded that the employer's explanation had not been supported by any substantiation. According to the Sub-district Court, the only possible conclusion was that the dismissal was inextricably linked to the employee’s illness. Termination of an employment contract due to a disability or chronic illness is contrary to a legal prohibition of discrimination. The legislative history of this law shows that an employer can be held seriously culpable if an employment contract is terminated in violation of the rules in this law. Therefore, according to the Sub-district Court, the condition for granting equitable compensation to the employee because of seriously culpable acts or omissions was met.
Therefore, the Sub-district Court ordered the employer to pay monetary compensation equitable to one year's salary. The employee had claimed two annual salaries because the employer could not have terminated the employment contract until after two years, due to the employee's labour incapacity, but the Sub-district Court did not find this argument justified because the employer would have been completely free to discontinue the employment relationship after one year.

It is possible for an employer to invoke a probationary period clause even before the commencement date of the employment contract, although it may be contrary to good employment practices to do so. The fact that an employee is ill does not preclude an appeal to this probationary period clause. Even using illness as the ground for terminating an employment contract during the probationary period is not prohibited. The law does prohibit unequal treatment due to a labour disability or chronic illness, however, and termination of an employment contract due to a disability or chronic illness is explicitly in contradiction of that prohibition. It should be noticed, however, that the law does not determine when a disease is chronic.
The above termination of the employment contract during the probationary period on the Sub-district Court’s assumed ground that the employee was seriously ill was seriously culpable and implied that the employer owed the employee equitable compensation.
In principle, such compensation is calculated on the basis of the wage that an employee can still benefit from during the period that the employment contract would normally have continued. The employee assumed two years because of the prohibition of termination during illness, which lasts two years. The Sub-district Court, however, based its decision on one year, because the employment contract had been entered into for one year and, according to the Sub-district Court, the employer was completely free not to extend the employment contract then.
In our view, however, the Sub-district Court overlooked the fact that also the failure to offer a new employment contract due to disability or chronic illness is against the law. We believe that, for that reason, an appeal by the employee, aiming at attribution of an even higher equitable compensation, would certainly not be without a chance.
Please note that despite the high equitable compensation that the employer had to pay, he may have substantially benefitted from terminating the employment contract before the employee started working. Since the employee has not actually been employed by the employer, the costs of potentially two years of Sickness Benefits and ten years of WGA benefits cannot be allocated to the employer either. Of course, the employee was already incapacitated for work before she joined the employer, so that the first day of incapacity for work must have been before the day of employment either way, but the employer would probably have had to convince the UWV of this first.