Sickness leave and termination of your employment contract: what should you know?
If you are on sick leave in the Netherlands, your employer may propose a settlement agreement to terminate your employment. This can happen, for example, where there is a workplace conflict or where both parties believe that returning to work may be difficult. It could also be that your employer has decided to make your role redundant while you are on sick leave.
However, signing a settlement agreement while you are sick can have significant consequences. Before agreeing to termination, it is therefore important to understand the protection you currently have – and what you may be giving up.
Your rights during sickness
Under Dutch law, employees are generally protected against dismissal during the first 104 weeks of sickness. During this period, your employer must continue paying at least 70% of your salary, subject to the statutory rules and any more favourable arrangements in your employment contract or collective labour agreement.
Both you and your employer also have reintegration obligations. The company doctor plays an important role in this process and assesses your capacity for work and advises on when and how reintegration can take place.
As long as you have not fully recovered, the prohibition against dismissal during sickness generally continues to apply. This also applies if you have already partially returned to work.
Can your employer propose termination while you are sick?
Yes. The prohibition against dismissal does not prevent your employer from proposing a settlement agreement. However, your employer cannot force you to accept it.
By signing a settlement agreement, you voluntarily agree that your employment will end. This means giving up the employment-law protection you would otherwise have during your sickness absence.
This is particularly important because, without your agreement, your employer may not simply be able to terminate your employment. Dutch law requires a reasonable ground for dismissal and, depending on the circumstances, the employer may also need to demonstrate that sufficient efforts have been made to resolve the underlying problem.
What happens to your sickness benefits?
This is one of the most important considerations when contemplating a settlement agreement during sickness.
If you voluntarily agree to terminate your employment while you are still unable to work, this may affect your entitlement to sickness benefits (Ziektewetuitkering) after your employment ends. By cooperating with termination, you may effectively be giving up both your continued salary entitlement during sickness and the protection that the Dutch social security system would otherwise provide.
Unemployment benefits (WW) may not provide an alternative either, as these generally require you to be available for work.
For that reason, signing a settlement agreement while sick can create a substantial financial risk. The fact that an employer offers a severance payment does not necessarily compensate for the salary and potential sickness benefits you may be giving up.
What should you consider before accepting?
If your employer proposes a settlement agreement during sickness, the financial offer should be assessed against your actual legal position. Relevant considerations include how long your employer might otherwise have to continue paying your salary, your expected recovery period, your reintegration prospects and the reason why your employer wants to terminate the employment relationship.
The settlement agreement itself should also be carefully reviewed. Important subjects include the termination date, severance payment, continued salary and benefits until that date, outstanding holiday entitlement, exemption from work, non-competition restrictions and legal fees.
For highly skilled migrants, the consequences for residence rights and the available period to find a new qualifying employer also require particular attention.
Should you accept a settlement agreement during sickness?
There is no general answer. In some situations, an agreed termination can provide a suitable solution, particularly where the employment relationship has become difficult and the employee does not envisage returning to the employer.
However, accepting termination during sickness is fundamentally different from accepting a settlement agreement while fully fit for work. You may be giving up valuable dismissal protection, continued salary during sickness and potential sickness benefits.
You can therefore accept the employer’s proposal, reject it, or negotiate better terms that adequately compensate for the rights and financial security you are giving up.
Before signing, it is advisable to have the agreement and your individual position reviewed by an employment lawyer. Many employers include a contribution towards legal fees in their settlement proposal.
And remember: after signing a settlement agreement, you generally have 14 days to reconsider and withdraw your consent without giving a reason.
More information
Do you have questions about your settlement agreement? Or other employment law questions? Please feel free to contact us for advice. We are happy to assist.
