Pre-arranged Dissolution Terminates Employment Contract during Wage Penalty

During the period in which the UWV had imposed a wage penalty on the employer, the employment contract with a sick employee was terminated by means of a dissolution procedure before the Sub-district Court that had been “pre-cooked” by the parties. The question is what benefit the employee will be entitled to after the end of the employment contract.
An employee of a car company had already been ill since November 2019. The UWV had imposed a wage penalty on the employer for making insufficient reintegration efforts. That’s why the employer had to continue to pay the sick pay until November 2022.
The employer requested the Sub-district Court to dissolve the employment contract because the employment relationship had been disrupted to such an extent that the employer could not be required to have the employment contract continued. The employer added that the employee could not be blamed for the disruption of the employment relationship. According to the employer, relocation of the employee made no sense. The employee also acknowledged that the employment relationship was disrupted. According to the employee, there were no re-employment opportunities.
The Sub-district Court ruled that it was thus established that one of the reasonable grounds for dissolution of the employment contract enumerated in the law, i.e. a disrupted employment relationship, was present here. Due to the imposed wage penalty, the prohibition of termination during illness had been extended. The Sub-district Court, however, was of the opinion that derogation from this governing rule could be granted here, since the employment contract should be terminated to the benefit of the employee. The employee had stated that his state of health had deteriorated as a result of the continuation of the employment contract and that he expected that further continuation of the employment contract would have a negative effect on his health and reintegration. According to the Sub-district Court, the employee would therefore benefit from termination of his employment contract. Therefore, the prohibition of termination did not preclude dissolution of the employment contract. Since the employer and the employee had already made agreements about the financial settlement of the employment contract, including the transitional allowance, which agreements had been recorded in the minutes of the hearing of the Sub-district Court, the Sub-district Court no longer had to decide on it. Therefore, the Sub-district Court confined itself to announcing the dissolution of the employment contract.

Termination of an employment contract with a sick employee is quite a problem.
Whereas an employee who is not sick does not forfeit his entitlement to an Unemployment Benefit by cooperating with his own dismissal – at least as long as he/she has not been its initiator and as long as there was no urgent reason for a summary dismissal – a sick employee will commit an action to the detriment of the UWV or the self-insurer when he/she cooperates with his/her own dismissal during illness and he/she will not be entitled to a Sickness Benefit. This employee will not be entitled to an Unemployment Benefit either, since he/she is not available for the labour market. A “notification of full recovery on paper only”, which could be agreed with the employee is also risky since, in case the employee would report sick later, the UWV might quickly jump to the conclusion that there has never actually been a recovery. And this may have the effect that the employee may try to have the agreement where the employment contract was terminated annulled “for mistake”. If the Sickness Benefit is not rejected for committing a detrimental action, it will still have to be borne by the large or medium-large employer. And this in turn will lead to an increase of the differentiated contribution to the Work Resumption Fund or to the obligation to pay the Sickness Benefit as a self-insurer.
Having the employment contract dissolved by the Sub-district Court, on conditions agreed by the parties in advance, may offer an opportunity to prevent the UWV from refusing to grant the Sickness Benefit for committing a detrimental action: then the employee can claim that he has not cooperated in his own dismissal. After all, it was the employer who has requested the dissolution and it was the Sub-district Court which subsequently decided that the employment contract should be terminated. Since all facts alleged by the employer in the above case were correct, the employee did not have to defend himself.

Whatever the circumstances, termination of an employment contract during illness will be met with suspicion and obstructionism on the side of the UWV, because it will release the employer from the obligations to continue wage payment during illness and from reintegration at the expense of the UWV, which would then have to pay a Sickness Benefit. and which should also be responsible for the ex-employee’s reintegration.
Things get even far more complicated when the employment contract with a sick employee has to be terminated during a period in which the employer is subject to a wage penalty. Having recourse to the Sickness Benefit is no longer an issue then, because the maximum benefit duration of 104 weeks has already expired by that time. Granting an Unemployment Benefit still encounters the fact that the employee is not available for the labour market due to his/her illness. And if the employee has recovered, then according to the ruling of the Central Board of Appeals of November 30, 2011, cooperating with his own dismissal would still constitute a detrimental action that precludes awarding an Unemployment Benefit, because it advances the unemployment.
Granting a WIA benefit is thus the only remaining option.
Throughout the duration of the wage penalty, the consideration of the employee's application for a WIA-benefit is suspended, but once the employment contract has come to an end, the employee can request the UWV to resume processing the application.
Unlike the Unemployment Benefits Act (WW) and the Sickness Benefits Act (ZW), the Work an Income according to Work Capacity Act (WIA) does not see the detrimental action as a ground for rejection, but an employee who is not for at least 35% labour incapacitated for generally accepted work within the meaning of the WIA, will still have to rely on an award of the Unemployment Benefit , which, in principle, will be rejected for committing a detrimental action.
Even then, however, what should always apply is, that termination of an employment contract can never constitute a detrimental action if continuation of the employment contract is an illness-causing circumstance that prevents recovery. This will not easily be the case, because then it should also be certain that even following a parallel track, aimed at integration into suitable work with another employer, cannot be required from the employee.
Thus, even in the event of a "pre-arranged" termination of the employment contract during illness, there is great uncertainty as regards the award of a benefit to an employee.
This makes it particularly difficult to terminate the employment contract.