The former employee had joined the employer on 26 January 1996. On 8 April 2013, he reported sick. The UWV imposed a wage sanction on the employer, meaning its wage-continuation obligation ended after 1 July 2015 (the date the transition payment was introduced). The employer and former employee entered into a settlement agreement, including payment of a transition payment of EUR 37,900 gross. On 1 April 2020, the employer applied to the UWV for compensation for the transition payment it had paid. The UWV set the compensation at EUR 0, prompting the employer to object and subsequently appeal.
The district court upheld the employer’s appeal, ruling that it was entitled to compensation for the transition payment it had paid. The UWV then appealed to the Central Appeals Court (CRvB).
The CRvB disagreed with the UWV’s interpretation limiting the amount of compensation. Under the UWV’s proposed reading, in a situation where the two-year illness period ended before 1 July 2015, no compensation would effectively be granted at all. However, the conditions under which the UWV grants compensation are set out in the first paragraph of Section 7:673e of the Dutch Civil Code, and the second paragraph is a maximisation provision that concerns only the amount of that compensation. Under the UWV’s interpretation, the second paragraph of Section 7:673e BW would effectively add an extra eligibility condition for compensation. This reading by the UWV is incompatible with the statutory system of compensation.
The text of Section 7:673e(2) BW likewise does not support the UWV’s interpretation. This paragraph refers to the amount of transition payment the employer would have owed under Section 7:673 BW. It follows that, when calculating the maximum amount of compensation, the duration of the employment contract is notionally shortened by taking the date on which the two-year period for the dismissal prohibition due to illness (and the employer’s wage-continuation obligation) expired. Read in that context too, Section 7:673e(2) BW can only be read as a maximisation provision.
Conclusion
Where an employment relationship ends after 1 July 2015, but the two-year illness period expired before 1 July 2015, the employer is entitled to compensation for the transition payment. When calculating that compensation, the transition payment is calculated using the date on which the employee had been sick for two years as the end date. It follows that the UWV had applied an incorrect interpretation of Section 7:673e(2) BW. The UWV’s appeal therefore fails. The employer is entitled to compensation for the transition payment paid to its sick former employee.
For the text of Section 7:673 BW, click here (in Dutch).
Questions about the above?
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