Update Dutch dismissal law (WWZ)

This blog addresses financial implications under Dutch dismissal law of (1) termination of the employment for long-term illness and (2) termination for urgent cause.

Credits photo right side: Insure My World

1)    Transition pay in case of long-term illness reimbursed by social fund

Prior to revision of Dutch dismissal law in 2015, employers could terminate an employment contract due to long-term (i.e. two years of) illness without any obligation to pay a severance. This changed by introduction of the new dismissal law (WWZ) per 2015. As of that moment the so-called transition payment is due. This was considered an undesirable side-effect of WWZ and resulted in dormant employments as after two years of illness no salary is due anymore. The changes that now also have been accepted by the Senate do not affect eligibility of ill employees to the transition pay, but as of (probably April) 2020 employers can be reimbursed for the transition payment (not any voluntary excess) by a social fund. Requests to that extent must be submitted within 6six months.

Retroactive reimbursement for period 2015-2020

More important, employers who paid the transition payments between 2015 and 2020 can also be reimbursed after all, provided that they submit a request to that extent within six months after the law coming into effect, so probably ultimately by September 30th 2020.

Credits photo above: hcamag.com

2)   (No?) Salary payment after successful summary dismissal in appeal (but declared invalid in first instance)

WWZ included a flaw resulting in an obligation to pay salary whilst a summary dismissal (termination for cause) upheld in appeal. The court of appeal cannot terminate the employment retroactively. Because a summary dismissal was considered invalid in first instance, this resulted in an obligation to pay salary between the summary dismissal and the decision in appeal. Very unsatisfactory in practice as the summary dismissal eventually was considered legitimate.

Flaw corrected by Supreme Court

This flaw now has been corrected by the Supreme Court. In this case the court of appeal ruled, and this has been confirmed by the Supreme Court, that there is no obligation to pay salary during that period because it is attributable to the employee that (s)he has not performed work so that there is no entitlement to salary.