Have you been off sick for more than two years and is redundancy also looming? You find yourself in a situation that is legally quite complex. Fortunately, one thing is certain: in both cases you are entitled to a statutory redundancy payment. In this article we explain exactly how that works, what changes in 2026 and what to watch out for.
Right to a redundancy payment after 2 years of illness
After two years of continuous incapacity for work, your employer may apply to the UWV for a dismissal permit. If that permit is granted, you are entitled to the statutory redundancy payment. This applies regardless of whether you had a permanent or temporary contract. The law makes no distinction here.
An important detail: the payment is calculated on the basis of your full gross salary – not the potentially reduced sick pay of 70% that you received during the second year of illness. It is based on what you earned before you became ill.
In 2026, the maximum statutory redundancy payment is €102,000 gross, or one gross annual salary if that is higher. The calculation is straightforward: for each full year of service you accrue one third of a gross monthly salary.
The dormant employment contract and the Xella standard
In the past, employers sometimes deliberately allowed the employment contract to continue after two years of illness without paying wages — the so-called dormant employment contract — in order to avoid paying the redundancy payment. The Supreme Court put an end to that in 2019 with the Xella ruling. On the basis of good employment practice (Article 7:611 of the Dutch Civil Code), an employer must agree to a request from the employee to terminate the dormant employment contract with the award of the statutory redundancy payment.
An exception exists only where the employer has a legitimate interest in maintaining the employment contract — for example where there are genuine prospects of reintegration. Financial difficulties or the fact that you are nearly at retirement age are not valid reasons to refuse the request.
The level of the Xella payment equals the redundancy payment that would have been due at the moment the employment contract became dormant — generally the day on which the 104-week period expired.
What if a redundancy process is taking place at the same time
It can happen that your employer carries out a redundancy process whilst you are already on long-term sick leave. This raises an understandable question: what applies to you in that case? That depends on the specific circumstances.
If your role is made redundant during a restructuring while you are on sick leave, the prohibition on dismissal during illness still protects you in principle for the first two years. After those two years that protection falls away and the employer can apply to the UWV for a dismissal permit, even where the reason for the dismissal is a combination of illness and business-economic circumstances.
In both cases — long-term incapacity for work or dismissal on business-economic grounds — you are entitled to the statutory redundancy payment. The grounds for dismissal determine which procedure applies, but the entitlement to the payment remains.
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Plan een gesprekHow the redundancy payment after 2 years of illness is calculated
The calculation works the same as for any other dismissal. You add up the number of full years of service and multiply that by one third of a gross monthly salary. For the remaining part of a year you calculate pro rata. Fixed pay components are included in the calculation, such as holiday pay, a fixed year-end bonus and structural allowances.
Practical calculation checklist:
- Determine gross monthly salary including holiday pay and fixed allowances
- Count the number of full years of service from the first day of employment
- Multiply: years of service × 1/3 monthly salary
- Calculate remaining months and days pro rata
- Check the outcome against the statutory maximum of €102,000 gross (2026)
Have you been receiving a reduced sick pay for some time? That makes no difference to the basis for the calculation. Your payment is always based on your normal contractual salary.
Changes to the compensation scheme from 1 July 2026
Until now, employers could reclaim the redundancy payment made after two years of illness in full from the UWV. That changes from 1 July 2026. Larger employers — with 25 or more employees — are expected to be unable to apply for compensation after that date. Only smaller employers (fewer than 25 employees) retain that right.
As an employee, nothing changes for you in substance: your right to the redundancy payment remains fully intact. However, your employer — if a large organisation — may feel greater pressure to push ahead with the dismissal procedure before 1 July 2026 in order to still qualify for compensation. This makes it all the more important that you know where you stand in good time.
Practical tips if you are on sick leave and dismissal is looming
- Always have the dismissal letter or settlement agreement checked before you sign
- Check that the redundancy payment has been correctly calculated on your full contractual salary, not on sick pay
- Ask whether a wage sanction from the UWV is in force, as this can affect the calculation
- In the case of a dormant employment contract, submit a written termination request yourself so that the reference date for the payment is established
- In a redundancy situation: check that the correct dismissal route has been chosen and that the proportional selection principle has been applied correctly
- Do not wait too long: after the redundancy payment has been made, you have only three months to challenge any errors through the cantonal court
Why Arbeidsjurist Eindhoven
Long-term illness and dismissal at the same time — that is already hard enough. You do not want to risk the redundancy payment being too low or your rights being overlooked. At Arbeidsjurist Eindhoven we have an in-depth knowledge of the local labour market and the legal ins and outs of situations like these. Whether it concerns a dismissal procedure through the UWV, a dormant employment contract or a redundancy process while you are at home on sick leave: we are here for you.
Get in touch for a no-obligation initial consultation. We are happy to think through your situation with you, with no strings attached.
Frequently asked questions
Am I entitled to a redundancy payment if I am dismissed after 2 years of illness?
Yes. If your employer terminates the employment contract after two years of continuous incapacity for work, you are entitled to the statutory redundancy payment. The payment is calculated on the basis of your normal contractual salary, not on the potentially reduced sick pay you received.
What is a dormant employment contract and am I entitled to a redundancy payment in that situation?
A dormant employment contract arises when your employer keeps the contract in place after two years of illness without paying wages. Under the Xella ruling of the Supreme Court (2019), you as an employee in that situation are entitled to request your employer to terminate the employment contract with the award of the statutory redundancy payment. The employer is in principle obliged to cooperate with this, unless there is a legitimate interest in maintaining the employment contract.
How much is the redundancy payment after 2 years of illness in 2026?
The calculation is identical to that for any other dismissal: one third of a gross monthly salary per full year of service, with holiday pay and fixed allowances included. In 2026 a statutory maximum of €102,000 gross applies, or one gross annual salary if that is higher.
Can I be dismissed on grounds of redundancy while I am on sick leave?
During the first two years of illness a prohibition on dismissal applies, which in principle blocks dismissal. After those two years that prohibition falls away. If your role is subsequently also eliminated through a redundancy process, the employer can commence dismissal proceedings. In both cases you retain the right to the redundancy payment.
Does the change from 1 July 2026 affect my right to a redundancy payment?
For you as an employee nothing changes: your right to the redundancy payment remains fully intact. What changes is that larger employers (25 or more employees) are expected to be unable to apply to the UWV for compensation from 1 July 2026 for redundancy payments they have made following long-term illness. Smaller employers retain that right.
We are happy to think along with you. For advice tailored to your situation we would gladly sit down with you. No rights can be derived from the content of this page and it may contain inaccuracies.
