Settlement Agreement During Illness Sickness



Can I agree with a Settlement Agreement or Termination agreement During Illness?

Settlement Agreement or Termination agreement During Illness

Can a settlement agreement be made during illness? Is it advisable? Is it secure for unemployment benefits (WW)? Read on below and seek advice and legal assistance from our dismissal specialists.

Employer and employee can mutually terminate the employment contract by mutual consent without affecting the employee's entitlement to unemployment benefits (WW), provided that everything is properly arranged by both parties. Read more about this in the article on the settlement agreement. But what about entering into a settlement agreement during illness?

Unemployment Rights when Entering into a Settlement Agreement During Illness

An unemployment benefit (WW) after entering into a settlement agreement is only possible if the employee is 'temporarily' sick, and they have recovered by the date of termination of the employment contract, allowing them to meet their job-seeking obligations and be available for work (obligations set by the Unemployment Insurance Act). There is often 'temporary illness' when the incapacity for work is related to work-related stress and/or excessive work pressure. When the employment relationship ends, many of these temporarily sick employees have recovered sufficiently to be available for other work and to apply for jobs.
If the employee falls back into sickness from unemployment and can no longer meet the conditions of the WW, they can successfully claim the Sickness Benefits Act (ZW) if they have received a WW benefit for more than 28 days.

Does a Sick (Former) Employee Have the Right to Sickness Benefits After Entering into a Settlement Agreement?

A sick employee who becomes unemployed because the fixed-term contract expires usually has the right to Sickness Benefits Act (ZW) benefits. But is this also the case if the employee agrees to the termination in mutual agreement with the employer, such as through a settlement agreement?
A regulated termination (e.g., through a settlement agreement) of the employment relationship during illness has consequences for the entitlement to ZW benefits. The general rule is that an employee who cooperates in the termination of their employment relationship at any time during the first 2 years of their illness will not be entitled to ZW benefits upon the end of the employment relationship. The employee's conduct is considered a 'detrimental act' according to Article 45, paragraph 1, subsection j of the ZW. It is considered 'detrimental' because during the first 2 years of their illness, the employee is entitled to continued payment of wages by their employer. If the employee gives up that right, they are disadvantaging the Employee Insurance Agency (UWV) by applying for substitute income (benefits) there.

Sickness Benefits Act Benefits May Still Be Possible with a Settlement Agreement

An exception to the above-mentioned general rule could be termination by mutual consent due to underperformance, a disrupted employment relationship, or blameworthy actions by the employer, and where it is highly likely in advance that a dissolution request will be granted in dissolution proceedings before the subdistrict court. The reason for dismissal must not be related to illness and must be unavoidable, making it more difficult for the UWV to take the position that they are disadvantaged. However, this is a risky path. The sick employee (advised by a lawyer or legal expert) will need to assess whether agreeing to a termination arrangement would result in forfeiting their right to Sickness Benefits Act benefits.
Often, the lawyers for both parties in such situations agree to process the agreed termination of the employment contract through a short procedure (a so-called 5-minute session) before the subdistrict court, thereby increasing the chance of receiving Sickness Benefits Act benefits.

Settlement Agreement After 2 Years of Illness

During the first 2 years of illness, an employer usually cannot terminate the employee. The prohibition on termination (opzegverbod) applies during that period. However, it does not apply after 2 years of illness. After 2 years of the employee's incapacity for work, the employer can apply for a termination permit from the UWV. After obtaining that permit, the employment contract can be terminated.
The employer will not obtain the dismissal permit if the employer has not made sufficient efforts for reintegration and the UWV has imposed an extended wage payment obligation. In that case, it is not advisable for the employee to enter into a termination agreement with the employer, as they will not be eligible for a social benefit.

Severance Pay After Two Years of Illness

When an employer terminates the employment contract of an employee, the employer is usually obligated to pay the employee a severance pay (transitievergoeding). Because the severance pay can be a substantial amount, many employers chose to not terminate the employment contract after 2 years of illness but to keep it 'dormant.' However, following a ruling by the Supreme Court (Hoge Raad), that is no longer allowed (with some exceptions). Based on the principle of 'good employment practices,' an employer must terminate the employee's contract upon request, after which the severance pay becomes due. Given this legal precedent, it is better for both employer and employee to enter into a settlement agreement in which it is agreed that the severance pay will be paid to the employee. Employers can then obtain reimbursement for this severance pay from the UWV.

Advice for Entering into a Settlement Agreement During Sickness or Illness

As you have read, entering into a settlement agreement during illness is not always advisable and can be complicated. Therefore, seek timely legal assistance from a specialist. The lawyers and legal experts at Dismissal Specialist can help you avoid mistakes and negotiate a favorable settlement agreement for you, if possible. Call 0900-123 7324 or email. The first consultation is FREE.

Sample Settlement Agreement After 2 Years of Illness

If you wish to enter into a settlement agreement after 2 years of an employee's illness, you can order a legally correct sample agreement from us. The model is drafted by our experienced lawyers and attorneys and is provided in an editable format so that you can easily customize it to your situation. Order through this link: sample settlement agreement link.

Are you facing dismissal or a settlement agreement during illness? Seek assistance from our specialists

If you are suffering from burnout or illness and are offered a settlement agreement, do not hesitate. Seek assistance from our specialists. We can prevent your dismissal or help you secure the best dismissal arrangement. Call 0900-123-7324 or email us. The first consultation is FREE."


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