Where an employment contract is terminated at the employer’s initiative, the employer must pay the dismissed employee a transition payment. We set out the rules that have applied in this regard since 1 January 2018 in our article Increase and amendment to the transition payment for 2018.
Compensation
In this article, we also report that the Government intends to introduce a compensation scheme. This concerns transition payments made in the event of dismissal because the employee is no longer able to carry out their work due to illness or disability. At present, such employees are kept on the payroll solely to avoid paying the transition allowance. The Government considers these ‘dormant’ employment contracts to be undesirable.
The Ministry of Social Affairs has concept of the compensation scheme has been published. However, the scheme will not come into force until 1 April 2020 (!).
Past cases
Transition payments made between 1 April 2015 and 1 April 2020 may also be eligible for compensation. In such cases, the UWV will usually have issued a decision granting a WIA benefit or awarded a benefit under the Sickness Benefits Act.
Request
Upon dismissal, the employer “simply” pays the transition allowance to the employee. The employer must then apply to the UWV for compensation. This application can be made within 6 months of the transition payment being paid to the employee. If the transition payment was paid in instalments, the application can be made immediately after the final instalment has been paid.
The application for compensation in respect of past cases must be received by the UWV by 30 September 2020 at the latest.