In the case of ‘sleeping employment’, the long-term disabled employee is at home. He no longer receives wages but is still employed by the employer.
Over the past few years, there have been several judgments from lower courts who have considered whether the employer could be obliged to terminate the employment contract with a long-term employee unable to work. Financial interests are involved for both the employer and the employee. If an obligation to terminate the employment relationship is assumed, the employer is in fact obliged to pay the statutory transition payment to the employee.
It is true that the Transitional Compensation Compensation Act comes into effect from 1 April 2020. On the basis of this law, a compensation scheme has been set up to compensate the employer via the UWV – provided that the set conditions are met – if he pays the long-term incapacitated employee compensation equal to the transition compensation.
Earlier this year, the Limburg District Court asked the Supreme Court about whether or not there was an obligation on the employer to terminate a dormant employment contract and to pay a transition allowance.
The Supreme Court has now ruled that the employer is obliged to cooperate in the termination of employment.
On the grounds of good employment practices, an employer is obliged to agree to a proposal from the employee to terminate the employment agreement by mutual consent, while granting compensation to the employee equal to the legal transition compensation, according to the Supreme Court. In addition, this compensation does not have to be more than what would be due in the case of a transition compensation upon termination of the employment contract on the day after that on which the employer could (have) terminate the employment contract due to the employee’s incapacity for work.
An exception to this principle must be accepted if – on the basis of circumstances to be stated by the employer and, if necessary, to be proven – the employer has a legitimate interest in maintaining the employment contract. Such an interest may, for example, lie in real reintegration possibilities for the employee. Such an interest cannot be due to the fact that the employee has almost reached retirement age when he makes his termination proposal.
If the employer makes it plausible that this pre-financing leads to serious financial problems, the court can decide that payment to the employee takes place in instalments or is suspended until after 1 April 2020.
Curious about the consequences of the judgment for your company or for your personal situation? Then contact me.
Mr. Ingrid Warfman