In these special times whereby everyone is battling against the Coronavirus, the news topics are completely covered by the Corona Crisis and new rulings, such as the Emergency Fund Employment Bridging (NOW). It is important to highlight other important rulings as well. As a result, the compensation ruling of the transitional remuneration will be discussed in this article.

Dormant employment

The employer is obliged to pay at least 70% of the salary to the employee during the first 104 weeks of illness. During this same period, the employer is in principle not allowed to terminate the employment contract. When the employee continues being sick after the 104 weeks, the employer is in general allowed to terminate the employment contract with the dismissal permit which is being issued by the UWV. In case the employer does not request a dismissal permit from the UWV, whilst the employee remains sick, you can speak of a dormant employment. The employment continues, however there is no obligation to pay salary. The employer prefers a dormant employment, because in that case the employer is not obliged to payout the transitional remuneration to the employee. When the employer terminates the employment contract with the dismissal permit, the employee is entitled to receive a transitional remuneration from the employer.

Compensation ruling transitional remuneration

A dormant employment among other leads to an accumulation of costs after 104 weeks of paying wages to sick employees and to uncertainty among employees. In order to prevent this from happening, the National Government has brought the compensation ruling transitional remuneration to life. Please be informed about the following: the amount of the compensation will not exceed the owed amount of the transitional remuneration that was due at the time that the 104 week wage payment obligation has ended. This shows that the compensation ruling is only meant as a indemnification for these costs. The compensation ruling applies to transitional remunerations that have been paid on or after July 1st, 2015. In case the sickness period of 104 weeks has ended before July 1st, 2015 the compensation ruling does not apply. In order to be eligible for the compensation ruling of the transitional remuneration, the following conditions apply:

  1. The employment contract has (partly) ended due to long-term disability;
  2. The employee remains ill after the employment has ended;
  3. The employer has paid the transitional remuneration to the employee.

The conditions mentioned above needs to be demonstrated in writing. This could include:

  • The UWV dismissal permit or the dissolution scheme of the cantonal judge;
  • Termination agreement showing the employee has been dismissed due to long-term sickness;
  • Information that has been used for the calculation of the transitional remuneration;
  • Proof that the transitional remuneration has actually been paid to the employee.

The Supreme Court decides

No, the compensation ruling of the transitional remuneration will not stop dormant employments. The decision of the Supreme Court on November 8th, 2019 will (at least more). The Supreme Court has decided that the employment must be terminated and the transitional remuneration should be paid, once the employee claims this. The employer must obey this claim due to being a good employer. Based on the Supreme Court’s decision, the transitional remuneration must be paid based on the situation on the date on which the payment obligation after 104 weeks has ended. Until this decision from the Supreme Court, they kept on counting when the dormant employment continued. As a result, the Supreme Court’s decision will end dormant employments, as long as employees actually claim to end the dormant employment and claim the payment of the transitional remuneration.

AAme at your service

The application for the compensation ruling of the transitional remuneration must be submitted using the E-recognition on the UWV website. If you have additional questions about the compensation ruling or need assistance with the application, please contact us at 015-2158815 or via payroll@aame.nl.


1ECLI:NL:HR:2019:1734

Scroll to Top