Partial Dismissal After Illness: When Are You Entitled to Compensation?
What employers need to know about UWV compensation and proper timing
Since 2020, Dutch employers may qualify for compensation from the UWV for transition payments made to long-term sick employees. But what happens if the employment contract is continued in a modified form, or partially terminated before the end of the two-year waiting period? In a recent ruling, the Central Appeals Tribunal (CRvB) offered important clarification.
The case: contract adjustment during long-term illness
The case involved an employee who reported sick in November 2017. During her reintegration, she started performing suitable alternative work. On 1 October 2019, her position was formally modified, but she remained employed by the same company. Then, on 19 November 2019, exactly two years after reporting sick, her working hours were substantially reduced from full-time to 0.6 FTE. Around that time, she began receiving a WGA disability benefit of 42.45%. The employer paid a transition allowance of over €26,000 and applied to the UWV for compensation.
UWV denied the request, court ruled in favour of the employer
The UWV rejected the application, arguing that the termination had occurred before the end of the waiting period. The district court agreed initially, but the CRvB reversed that decision on appeal. The Tribunal ruled that the employment contract had not been terminated on 1 October 2019, but continued in a modified form. A partial termination only took place on 19 November 2019, when the contract was structurally and substantially reduced.
Partial dismissal and the Kolom ruling
The CRvB referred to the so-called Kolom ruling by the Dutch Supreme Court, which confirmed that partial termination is legally possible if the working hours are reduced by at least 20% on a permanent basis, for example due to partial disability or illness. In this case, the reduction from 1.0 to 0.6 FTE met that threshold, meaning it qualified as partial dismissal. Therefore, the employer was also entitled to compensation under the transition payment scheme.
Practical tips for employers
This case illustrates the importance of carefully managing timelines and wording in settlement agreements involving long-term sick employees. Any adjustment or termination of the employment contract before the two-year period ends may disqualify you from compensation. To protect your rights, make sure:
Contract changes take place after the two-year waiting period
The reduction in hours is substantial and permanent
Documentation clearly distinguishes between continued employment and (partial) termination
Conclusion
This ruling from the CRvB offers clear guidance for employers dealing with partial reintegration or dismissal of long-term sick employees. Timing and legal accuracy are crucial. Terminating or altering the employment contract too early can lead to the loss of your right to UWV compensation. Only when the employment is structurally and substantially reduced after the waiting period can compensation be granted.
Always ensure that all agreements are clearly recorded, with accurate dates, and legally verified. Meticulous legal and administrative planning helps avoid unnecessary costs, lengthy procedures, and the risk of missing out on compensation you’re legally entitled to.
This blog was written by Mr. Stijn Blom
Employment law attorney at expatlawyer.nl B.V. Stijn has extensive experience in employment law and supports entrepreneurs on a daily basis with a wide range of employment law issues. From dismissal cases to drafting watertight agreements and regulations – with his practical and personal approach, he helps employers and employees move forward. Want to know more? Visit Stijn’s page.
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June 2025
