18 March 2024

Supreme Court clarifies Xella

Long-term illness of an employee can eventually provide a basis for termination of the employment contract, provided that: 

(1) the statutory (possibly extended) period of wage payment during illness has expired, and   

(2) it is plausible that recovery and performance of modified work are not reasonably possible.  

In case of such a termination, the statutory transition compensation is due. Employers may therefore be tempted not to terminate the employment contract and instead let it continue as ‘dormant’, in other words without paying any more wages and without settling with the employee financially by paying the transition payment.  

In 2019, the Supreme Court ruled that an employer must in principle agree to terminate the employment contract by mutual consent if the employee so requests, unless the employer still has a legitimate interest in the continuation of the employment contract, for instance if reintegration is still possible. An approaching retirement – which would end the employment contract without statutory transition compensation – does not constitute a legitimate interest in this context. 

The Supreme Court recently clarified that the existence of an exception must be assessed at the time the employee makes the request for termination. This assessment must include relevant facts and circumstances before and after the request. 

UWV often compensates the transitional compensation paid to a long-term sick employee. Such compensation should be calculated against the date on which the statutory period of wage payment during illness ended (and not, for example, against the actual termination date). Otherwise, the employer pays more than the maximum compensation. This regulation may change as part of the coalition agreement of 16 May 2024, but as of yet no initiatives have been taken to that end.  

How can La Gro be of assistance?  

Do you have questions about a sick employee or compensation of transitional allowance by UWV? Do you have a different question? Expertise in 18 legal fields enables La Gro to offer broad legal assistance. Feel free to contact me or one of my specialist colleagues.

Author
G.B.M. (Gerard) Zuidgeest

Attorney at Law & Partner

Call: +31 172 530 250