An employer is compensated if he pays an employee transition compensation after two years of sickness. This compensation must be applied for within six months of the payment of the transition compensation. If transition compensation was paid before 1 April 2020, the compensation must be applied for no later than 30 September 2020.
Did you, as an employer, pay an employee transition compensation upon dismissal after two years of illness? In that case you are entitled to compensation. Please note: the compensation must be requested within six months of payment of the transition compensation. If you paid transition compensation before 1 April 2020, you have to apply for compensation from the UWV by 30 September at the latest. Our blog of 1 April 2020: Transition Payment Compensation Scheme for employers in the event of dormant employment provides an overview of the scheme. Here are a few points for attention, in particular for the former cases.
An employer is only entitled to compensation if the employee is entitled to transition compensation. The reference date for the amount of the compensation is the date on which the employee was ill for two years. The entitlement to transition compensation has existed since 1 July 2015. If the employee had been ill for two years before that date, the employer is not entitled to compensation upon termination.
Because of the Compensation Act, the employer is obliged, upon request of the sick employee, to terminate the contract after two years and pay the transition compensation. If the employer fails to do so, the employee is entitled to damages. The amount of damages is equal to the amount of the transition compensation the employer would have had to pay in the event of termination on the day after the two-year waiting period in the event of sickness elapsed. If the waiting period ended before 1 July 2015, the employee is entitled to damages of EUR 0.
As of 1 January 2020, the calculation of the transition compensation has changed. For transition compensation paid after that date, the compensation will be calculated on the basis of the new calculation method. If the employer paid transition compensation after 1 January based on the old calculation method, he will thus not receive full compensation. An exception applies if the termination procedure was started before 1 January 2020.
This may result in limited compensation of damages in the event of termination of dormant employment. After all, they are calculated on the basis of transition compensation at the end of two years of illness. If that date is before 1 January 2020, the old calculation method applies, even if the new calculation method applies for the calculation of the compensation. In that case, it may be more beneficial for the employer to terminate the employment with transition compensation and not to wait for the employee to request termination with damages. We will be happy to advise you on your options.
The application period commences on the date the full transition compensation was paid. If you pay in instalments, this will be the date on which the last instalment was paid. The date on which the employment contract could have been terminated does not affect the application period.
In former cases, the UWV had six months to take a decision. This includes the situation in which notice could have been given before 1 April 2020, but the transition compensation was not paid until 1 April or later. Once the UWV has decided that you are entitled to the compensation, the money will be paid into your account within five working days.
Do you have any questions about the Compensation Scheme? Are you looking for advice on terminating a long-term sick employee. We will be happy to help you. Please contact us:
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