Some developments under Dutch dismissal law for people in the field of HR to take into account in daily business

1. Update Dutch
dismissal law
(WWZ)
Financial implications under
Dutch dismissal law of
(1) termination of the
employment for long-term
illness;
(2) termination for urgent
cause; and
(3) Partial transition pay
BY BOUDEWIJN KANEN

2. @boudewijnkanen

3. Boudewijn Kanen
Partner HR & Pension Law, Liber Dock
@Boudewijnkanen
Boudewijn is a seasoned Dutch employment & pension lawyer. He
specializes in employment-related aspects of change processes, such as
reorganizations, acquisitions and collective amendment of employment
conditions, including pension conditions for a two-tier board company and
multinationals. He is a Certified Pension Lawyer (CPL).
In light of his expertise, Boudewijn is the permanent author of the alerts in
the employment law journal and comments on pension case in journals. He
also regularly publishes in professional journals. Boudewijn also is member
of the dispute committee of the mandatory pension fund for public
pharmacists.
Boudewijn has been recommended by Legal 500.

4. Content
Financial implications under Dutch dismissal
law of
1. termination of the employment for long-
term illness;
2. termination for urgent cause; and
3. Partial transition pay in case of partial
termination

5. 1. Transition pay in case of long-term illness
reimbursed by social fund
Prior to revision of Dutch dismissal law in 2015, employers could terminate an
employment contract due to long-term (i.e. two years of) illness without any
obligation to pay a severance.
This changed by introduction of the new dismissal law (WWZ) per 2015. As of that
moment the so-called transition payment is due.
This was considered an undesirable side-effect of WWZ and resulted in dormant
employments as after two years of illness no salary is due anymore.
The changes that now also have been accepted by the Senate do not affect eligibility
of ill employees to the transition pay, but as of (probably April) 2020 employers can be
reimbursed for the transition payment (not any voluntary excess) by a social fund.
Requests to that extent must be submitted within six months.

6. 1a. Retroactive reimbursement for period
2015-2020
More important, employers who paid the transition payments
between 2015 and 2020 can also be reimbursed after all, provided that
they submit a request to that extent within six months after the law
coming into effect, so probably ultimately by September 30th 2020.

7. 2. Termination for urgent cause.
(No?) Salary payment after successful summary dismissal in appeal
(but declared invalid in first instance)
WWZ included a flaw resulting in an obligation to pay salary whilst a
summary dismissal (termination for cause) upheld in appeal.
• The court of appeal cannot terminate the employment
retroactively.
• Because a summary dismissal was considered invalid in first
instance, this resulted in an obligation to pay salary between the
summary dismissal and the decision in appeal.
Very unsatisfactory in practice as the summary dismissal eventually
was considered legitimate.

8. 2a. Flaw corrected by Supreme Court
This flaw now has been corrected by the Supreme Court.
In this case the court of appeal ruled, and this has been confirmed by
the Supreme Court, that there is no obligation to pay salary during that
period because it is attributable to the employee that (s)he has not
performed work so that there is no entitlement to salary.

9. 3. Partial transition pay
Dutch legislation does not provide for partial termination of an
employment agreement or for a partial transition payment in
case of a reduction in working hours
However in Sept 2018 the Supreme court ruled differently, i.e in
specific cases involving a reduction of working hours.
The reduction in working hours must be ‘substantial’ (at least
20%) and reasonably be expected to be permanent.

10. 3a. Partial transition pay
What specific cases?
1. Partial redundancy due to business economic reasons
2. When an employee suffers partial and permanent disability
for work
Employee should claim partial transition pay within 3 months
after the contract has ended.
Still open is whether it would also apply in other cases such as
reassignment in a lower paid job (-20%) in case of redundancy.

11. .
Questions?
Boudewijn.kanen@liberdock.com
Disclaimer:
The information provided in these slides, is purely intended as general information and must not be considered to be legal advice.
No rights may be derived from this information. Neither Liber Dock B.V. nor its shareholders and/or employees are liable for any
damage that may arise as a result of inaccurate or incomplete information provided in these slides. All liability in relation to the
accuracy, completeness and currency of the information offered and use of the website is hereby explicitly excluded. The law of