Dismissal after 2 years of illness

An employee who is unable to work, however unfortunate their personal situation may be, costs an employer a lot of time and money. Dismissal after incapacity for work is not possible in the first two years due to dismissal protection. The employee may not be dismissed on grounds of illness during the first two years. The employer is obliged to continue paying the employee’s salary during this period. Salary payments may be discontinued after two years. From this point onwards, it is also possible to proceed with dismissal after two years of illness.

Dismissal due to incapacity for work

Dismissal after two years of illness or dismissal of an employee due to incapacity for work – also after a period of two years – is legally permitted if the employee is no longer able to perform the work for which they were hired. In addition, the employer must have attempted to find another position or other work for the employee in question. An employer may also request to terminate the employment contract. The employer must comply with this request.

Dismissal application to the UWV

The employer is obliged to help the sick or incapacitated employee to reintegrate into the organisation. If no progress has been made after two years and the person in question is unable to return to work, the employer is free to dismiss the incapacitated employee. In the event of dismissal after two years of illness, the employer must apply for dismissal for the employee to the UWV, which will assess the application. The UWV must give an employer permission to terminate the employment contract.

When is an employee incapacitated for work?

An employee is incapacitated for work when he or she is no longer able to perform his or her work. The work may be impeded by a physical or mental illness. It depends on the nature of the work whether it can still be performed. A (company) doctor can provide clarity about the (physical or mental) condition of the employee.

In the event of dismissal after two years of illness, an incapacitated employee will generally receive WIA benefits. These benefits are awarded when the person is at least 35% incapacitated. If an employee is not eligible for WIA benefits after dismissal following two years of illness, the employee can apply for WW benefits.

Reflex effect of prohibition of termination due to illness

An employee is ill or incapacitated for work if, based on objective criteria, it can be established that they are unable or not allowed to perform their work.

If an employer wishes to terminate the employment contract of an incapacitated employee before dismissal after two years of illness on other grounds, the subdistrict court will assess the application for termination in accordance with the reflex effect of the prohibition of dismissal. In doing so, the court will examine whether the request for dismissal is related to the circumstances to which a prohibition of termination during illness applies.

Reintegration of sick employees

Together with the employee, the employer must do everything possible to get them back to work quickly. Within six weeks of the sick report, a meeting will take place between the sick employee and the company doctor or occupational health doctor. During this meeting, they will look at what work the employee is able to do. They will also discuss when the employee thinks they will be able to resume their own work. The doctor’s advice, the problem analysis, describes the employee’s options for returning to work.

Drawing up a reintegration plan

Within eight weeks of the sick report, the employer and employee draw up an action plan or reintegration plan. This plan outlines how both parties can work together to ensure a quick return to work. The employer must, among other things, consider whether the employee can work at their own workplace or what adjustments are necessary for this. If this is not possible, it must be investigated whether the employee can work at another workplace within the company. We call this first-track reintegration. Together with the employer, another workplace at another company can also be considered (second-track reintegration).

Maintaining the reintegration file

During the reintegration process, the employer and employee remain in contact with each other. At least once every six weeks, a status meeting must be held to assess whether the action plan needs to be adjusted. The employer keeps a reintegration file of these meetings, in which agreements are recorded. During the first two years of illness, the employer is responsible for the reintegration of the employee. After this period, the employee in question will be called for a WIA assessment. A reintegration process lasts a maximum of 104 weeks.

Suitable work in the event of illness

Suitable work is work that an employee who is on long-term sick leave can perform despite their illness. When an employer offers the employee suitable work, the employee must perform this work. However, the employer must take into account the work that the employee is required to perform under the employment contract, the work that the employee previously performed, the employee’s education and level of qualification, the employee’s health, the salary and the distance the employee has to travel to work. If an employee refuses to perform suitable work, the employer may decide to stop paying their salary.

Wage payment obligation ends after two years

After two years of illness, the employer’s wage payment obligation expires. If the employer or employee does not opt for dismissal after two years of illness, the employee remains in service. We refer to this as a dormant employment contract. An employer may opt for this if it can be assumed that the employee will recover in the short term or that suitable work will become available. In this case, the employee remains in service but does not receive a salary. Because the employee is not dismissed, no transition payment is made to the employee. The existing employment contract remains in force.

If the employee is still unable to work after two years of illness, the employer is in principle no longer required to pay a salary. If the UWV’s assessment shows that the employer has made insufficient efforts with regard to the reintegration obligation, the UWV may determine that the employer must continue to pay the salary for a maximum of one additional year.

Dismissal after two years of illness: prohibition of termination

With a few exceptions and specific situations or agreements, an employee may not be dismissed during the first two years of illness. During this period, there is a prohibition on termination of the employment contract. The statutory notice period expires after two years of illness. Dismissal after two years of illness is possible if both parties agree or by applying for a dismissal permit from the UWV.

Justified interest of the employer

An employee may also request dismissal themselves. If the employee requests termination of the contract, the employer is obliged to comply. An exception to this obligation applies if the employer has a legitimate interest in continuing the employment relationship. This provision applies, for example, in situations where the employer offers or sees opportunities for reintegration for the person in question.

Compensation for continued payment of wages

In the event of dismissal after two years of illness, the employee is entitled to a transition allowance, despite the continued payment of wages during the employee’s absence. A compensation scheme for transition allowances is available to employers. This scheme from the national government prevents employers from being faced with an accumulation of costs after two years of continuing to pay wages to a sick employee. This scheme, which came into effect in October 2020, also applies to transition payments already made after the termination of an employment contract after two years of illness.

Contribution towards transition allowance

Various conditions have been set in order to be eligible for compensation for the transition allowance. It goes without saying that a transition allowance must have been paid to the employee and that the employee was legally entitled to this transition allowance. In addition, the employee must have been dismissed after two years of illness. An employer must also be able to present a dismissal permit from the UWV, have received a termination order from the court or, in the case of dismissal by mutual consent, provide evidence of the termination agreement.

Applying for compensation from the UWV

In order to be eligible for compensation for the transition allowance in the event of dismissal after two years of illness, an employer must apply to the UWV for compensation no later than six months after paying the full transition allowance. The UWV will assess whether the employer is entitled to compensation for the transition allowance paid.

Terminating an employment contract during illness

In a number of cases, it is permissible to terminate the employment contract during illness or before dismissal after two years of illness applies. It is important that the incapacitated employee is not dismissed because of the illness. Dismissal during illness is permitted in the case of an agreement in the collective labour agreement, probationary period or bankruptcy. Termination of the employment contract during the employee’s illness is also permitted if the employee does not cooperate with reintegration or behaves in such a way that summary dismissal is appropriate.

The same conditions apply to employees with a temporary contract as to employees with a permanent employment contract. If an employee with a fixed-term contract falls ill, the employer will continue to pay 70% of the salary for a maximum of two years. When the temporary employment contract expires during the period of continued salary payment or the maximum term of two years has been reached, the UWV will take over the salary costs after the end date of the contract. From this point on, the UWV is also responsible for supporting the employee’s reintegration.

UWV gatekeeper test

In the event of dismissal after two years of illness, the UWV will assess whether an employer has made sufficient efforts to return a sick employee to work. If the UWV’s investigation shows that an employer has failed to do so, it may be determined that the employer must continue to pay the employee’s salary for an additional year. This check is called the gatekeeper test and ensures that an employer does everything possible to get a sick employee back to work.

Reassignment within the company

During the Gatekeeper Test, the UWV checks, among other things, whether an employee can return to work within 26 weeks, possibly with adjustments. If an employee can return to work within 26 weeks, dismissal after two years of illness will not proceed.

The UWV also looks at whether redeployment to another position is possible. To this end, the UWV not only looks at vacant positions within the company, but also at structural work currently being carried out by a temporary worker, self-employed person or employees with a temporary employment contract.

Frequently asked question about: dismissal after two years of illness

Is an employer obliged to call in a company doctor?

According to the Gatekeeper Improvement Act, the employer is obliged to call in a company doctor in the event of an employee’s illness. This must be done within six weeks of the first report of illness, so that the company doctor can draw up a problem analysis and, together with the employer and employee, draw up a plan of action for reintegration.

Legal advice on dismissal during illness

Illness is an unpleasant situation for both the employee and the employer and can arise without warning. Are you unsure about what action to take or what steps to take next? Every situation or termination of an employment contract is different and can be very complex. We therefore recommend that you seek legal advice on dismissal after 2 years of illness. Our specialists in employment law have extensive experience in entrepreneurship, dismissal law and dismissal procedures. For no-obligation advice, please contact one of our solicitors.

Authors: Employment law solicitors Judy Sliepen and Myrddin van Westendorp