Long-term sick people may no longer receive severance pay. Employers will no longer be compensated for this in the new year. On average, people miss out on thousands of euros, says CNV. The union also fears an increase in dormant employment contracts.
Anyone who is sick for a long period of time will remain employed by his or her employer for at least another two years. Afterwards, the employment contract is often terminated and someone receives a transition payment.
The Netherlands currently has tens of thousands of long-term ill people; Of these, 36,000 people received a transition payment last year of an average of 17,000 euros per case. But this group is in danger of losing this amount.
Necessary for subsistence or further training
Employers can now still make use of compensation for the costs of transition payments for long-term sick people. But the Jetten cabinet amended a bill at the end of last month, as a result of which the compensation will be canceled entirely as of January 1, 2027.
Initially, this would not be until January 1, 2028, but that change has been brought forward. The government is counting on a cutback of 831 million euros. But its disappearance may have major consequences for both employee and employer.
Dormant employment
The compensation for transition payments for long-term ill people was created in 2020. Many employers retained long-term sick people so that they did not have to pay a transition payment, the so-called dormant employment contract. The idea was that if companies get the amount back, they will no longer retain employees unnecessarily.
Now that is being reversed and the CNV union is anything but happy about that. “If you have been ill for two years, then something is seriously wrong,” says chairman Hans van den Heuvel. “You are often in a situation in which you receive less pay and need the transition payment: either for your own subsistence, or to train yourself and update your knowledge in order to make yourself attractive to new employers again after two years.”
Van den Heuvel also places the change in a broader context. “There are of course already plans to make significant cuts in benefits for employees who become ill. This will also be added.”
Entrepreneur needs the money
It also affects employers, especially small entrepreneurs and SMEs. They simply cannot always pay the transition payment out of their own pocket, says employment law lawyer Joop van Zijl.
“Employers continue to pay wages for two years in the event of illness and also have to pay a transition compensation if someone leaves employment. These are serious costs that can amount to an annual salary. Then you can decide whether it is not more beneficial to keep someone employed. You are insured for the wages and then you do not have to pay a transition compensation.”
Even the union says it is concerned about the small business owner. Van den Heuvel: “It was initially said that the compensation scheme would continue to exist for small companies. But now it is disappearing for all employers. This is much easier to afford for large organizations than for a small entrepreneur with only ten employees.”
In addition, the government will also stop compensating entrepreneurs who want to let their people go because they have reached state pension age and are stopping their business.
Van Zijl: “For example, this concerns the elderly bicycle repairman who wants to close down his business and has not been able to find anyone who can take over the place. He must pay his staff severance pay. The government states that these entrepreneurs have capital for this, but that money is often reserved for their own retirement provision.”
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