As of 1 April 2020, employers can receive an amount from the UWV to compensate for the transition payment paid to long-term sick employees. The compensation is good news for employers.
Payment of transition payment termination of employment contract
Since the introduction of the Work and Security Act on 1 July 2018, employers have been obliged to pay a transition payment when terminating the employment contract with an employee who has been ill for two years.
For many employers, this meant a major blow. Especially since the transition payment followed a period of two years of continued payment of wages in the event of illness.
Dormant employment relationship
For cost reasons, many employers chose to keep the employment relationship ‘dormant’. This means that after the duration of the obligation to continue paying wages of 24 months, the employment contract was continued, with all the associated risks and obligations.
Finally, on 10 July 2018, the Senate adopted the Transition Compensation Bill. As of 1 April 2020, employers can be compensated retroactively to 1 July 2015 for the transition compensation paid to long-term sick employees.
Transition compensation amount
The compensation for the two-year illness compensation is equal to the transition compensation paid, capped at the salary amount that was paid during the two years of illness.
For a ‘dormant employment relationship’, no compensation is given for the salary period during which the employment relationship was kept dormant. This is the period during which the employee was still employed, without an obligation to continue paying salary.
Requirements for applying for transition compensation
The employer must apply for compensation digitally at the UWV. The following documents must be uploaded.
- The employment contract of the employee;
- The termination agreement;
- Documents showing that the employment contract has been terminated due to long-term incapacity for work by means of:
- The decision of termination with permission from the UWV;
- The dissolution decision of the Subdistrict Court;
- The settlement agreement/termination agreement;
- The pay slips showing the amount of continued salary payment;
- The calculation of the transition compensation;
- Proof of payment of the transition compensation.
Terms for processing transition compensation compensation
The Transition Compensation Compensation Act will be effective on 1 April 2020. Employers then have six months to apply for compensation from the UWV.
All compensation applications relating to the period from July 1, 2015 to April 1, 2020 must be submitted by October 1, 2020 at the latest.
For new cases after April 1, 2020, the application must be submitted within six months after payment of the transition payment.
If you have any questions about the due date or the possibility of compensation for the transition payment, please contact us. Send an email to info@transportrechtadvocaat.nl or contact us at 076 – 5204044.
Mr. Otto Lenselink
Breda, August 2018
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