Reorganization and illness: your rights when you are sick

What does this mean for you?

While you are unfit for work due to illness, a statutory dismissal ban applies: in principle your employer may not give notice of termination during your illness (Article 7:670(1) of the Dutch Civil Code, BW). This ban applies during the first two years (104 weeks) of your incapacity for work. A reorganization does not change that in itself.

This does not mean that your position cannot be eliminated. Your employer may reorganize and may abolish your position. The dismissal ban concerns something else: it protects you against the actual termination of your employment during illness. If your employer wants to dismiss you for business economic reasons, permission from the UWV (the Dutch Employee Insurance Agency) is required, and the UWV will in principle not grant that permission for as long as the dismissal ban during illness applies.

In practice this means that, as an employee on sick leave, you have a considerably stronger position than a healthy colleague in the same reorganization. There are some exceptions to this protection, and there is one pitfall, namely signing a settlement agreement during illness, which can undo this protection in a single step. We discuss both below.

Your protection during illness

Dismissal ban during illness (Art. 7:670(1) BW), first 104 weeks
The UWV refuses a dismissal permit for as long as a dismissal ban applies, unless a statutory exception applies
Continued payment of wages during illness (Art. 7:629 BW)
Your employer's reintegration obligation continues
In most cases upon dismissal: entitlement to at least the statutory transition payment
You are included in the reflection principle
The right to legal advice before you sign anything

When the protection does not, or no longer, applies

The dismissal ban during illness is strong, but not absolute. On the following points your position may look different. Whether an exception applies in your case depends on the precise circumstances.

Falling ill after the UWV application

The dismissal ban does not apply if you report sick after the UWV has already received your employer's dismissal application (Article 7:670(1)(b) BW). If you report sick before that moment, you are protected. The order and timing are decisive here, and are not always easy to establish.

Full closure of the business

If the business is fully closed down, the dismissal ban during illness may lapse (Article 7:670a(2) BW). This concerns the cessation of the entire business activity, not a partial reorganization in which the company continues to exist. Whether the closure of only a department or location falls under this depends on the legal structure of the organization.

After 104 weeks of illness

In most cases the dismissal ban ends after 104 weeks, when the obligation to continue paying wages ends. If the UWV imposes a wage sanction or the wage payment period is extended, the dismissal ban continues as well. Once the ban ends, your employer can apply to the UWV for a dismissal permit on the grounds of long-term incapacity for work. Whether this arises depends, among other things, on the reintegration efforts made; insufficient effort can have consequences for the employer.

The reflection principle still applies

As an employee on sick leave you are simply included when the reflection principle (afspiegelingsbeginsel) is applied. You can therefore be designated as redundant. The dismissal ban subsequently only prevents your employment from actually being terminated by notice during illness; it does not prevent your position from being included in the selection.

The pitfall: do not sign a settlement agreement during illness

The dismissal ban does not protect you if you yourself agree to termination. If you sign a settlement agreement (vaststellingsovereenkomst) during illness, you give up that protection voluntarily, with potentially far-reaching financial consequences.

The most important risk is the loss of your benefit. The UWV can regard the termination of your employment during illness as a prejudicial act (benadelingshandeling): by ending the employment contract, your right to continued payment of wages during illness ends and the costs shift to the UWV. As a result, you may have no right to a Sickness Benefits Act payment (Ziektewet). During your illness you will usually also not qualify for an unemployment benefit (WW), because you are then not available for work; only after recovery can an entitlement to WW arise. As a result, you may temporarily be left without income.

In addition, a settlement agreement usually contains a full and final discharge (finale kwijting). This generally means that the parties waive further claims against each other, to the extent that these fall under the arrangements made. Moreover, when the employment contract ends, so does the protection you had during illness, such as the continued payment of wages, the reintegration and the dismissal ban. You do not simply get that protection back afterwards.

This does not mean that a termination arrangement during illness is never sensible. Sometimes there is a good reason and an arrangement can be structured carefully. It does mean that you should not sign such a proposal during illness without having the consequences for your benefit assessed beforehand.

Before you sign anything

Do not sign anything while you are on sick leave without a legal assessment
Have it checked what the proposal does to your Sickness Benefits Act (Ziektewet) and WW rights
Bear in mind that a full and final discharge cannot be undone later
Note that after signing you have 14 days of statutory reflection time (Art. 7:670b(2) BW)
Do you feel pressure to sign quickly? That is precisely a reason to seek advice first

Wages, reintegration and your place in the reflection principle

For as long as you are ill, your employer continues to pay your wages, in principle for a maximum of 104 weeks (Article 7:629 BW). How much this is depends on your employment contract or collective labour agreement (cao); the law assumes at least 70% of your wage, and in many cases more is paid during the first year of illness. A reorganization does not interrupt this continued payment of wages.

Your employer's reintegration obligation also continues during the reorganization. Your employer must keep making efforts to help you return to work, if necessary in other suitable work. The fact that your own position is being eliminated does not release the employer from that obligation; it may even make the search for suitable work more urgent. Insufficient reintegration effort can later be held against the employer by the UWV.

When it is determined who becomes redundant, you are, as an employee on sick leave, simply included. When the reflection principle is applied, illness in itself may not be a selection criterion. If you are designated as redundant, the dismissal ban subsequently prevents your employment from actually ending by notice during illness.

If your employment is ultimately terminated lawfully after all, for example once the dismissal ban has ended, then in most cases you are entitled to at least the statutory transition payment (transitievergoeding) (Article 7:673 BW). Room for a higher payment does not arise automatically, but may result from negotiation, a social plan, a settlement agreement, or seriously culpable conduct on the part of the employer.

Became ill because of the reorganization?

It happens that the announcement of a reorganization leads to complaints such as stress or overstrain, causing someone to report sick. Illness with a psychological cause is legally equivalent to physical illness: the dismissal ban and the continued payment of wages apply in that case as well.

The timing is, however, important. If you report sick before the UWV has received a dismissal application, you enjoy the protection of the dismissal ban. If you only report sick after that, that protection does not apply to that dismissal.

What you can do now

If you are on sick leave and your employer announces a reorganization, it is wise to take the steps below. The sooner you map out your position, the more options there are.

Keep cooperating with your reintegration and with arrangements with the company doctor; this remains important
Ask your employer for a written explanation of the reorganization and of what this means for your position
Keep all correspondence, meeting reports and documents you receive
Do not sign a settlement agreement or termination proposal without legal advice
Before signing, have it assessed what a proposal does to your Sickness Benefits Act (Ziektewet) and WW rights
Contact us before you agree to a proposal

ReorgLegal assesses your full situation: the reorganization, your illness and reintegration, any selection, and a proposed exit package. On that basis we determine what protection you have and what would be a reasonable outcome in your situation.

Frequently asked questions

Can I be dismissed while I am ill?
During the first 104 weeks of your illness a dismissal ban applies. In principle your employer cannot give notice of termination and the UWV usually does not grant permission for it, subject to a few exceptions.

Do I have to sign a settlement agreement?
No. And precisely during illness caution is called for: signing can lead to the loss of your Sickness Benefits Act (Ziektewet) and WW benefits. Always have a proposal assessed first.

Can my position be eliminated while I am ill?
Yes. Your employer may reorganize and abolish your position. The dismissal ban does not protect your position, but your employment against termination by notice during illness.

What happens after two years of illness?
In most cases the dismissal ban ends after 104 weeks, after which your employer can apply to the UWV for a dismissal permit. Even then you are, in most cases, entitled to at least the statutory transition payment.

Reorganization and illness