Have you been off sick for an extended period and has your employer offered you a settlement agreement? It is perfectly understandable if you are unsure where you stand. A settlement agreement during long-term illness touches on several legal matters at once, from protection against dismissal to benefit entitlements. It is wise to be thoroughly informed before you sign anything.
What does long-term illness mean in employment law?
In employment law, long-term illness refers to a situation in which an employee is unable to work for an extended period due to illness or incapacity for work. During the first two years of illness, you are in principle protected against dismissal. This is known as the prohibition on giving notice during illness.
However, that prohibition does not mean your employer is prevented from taking any action whatsoever. Your employer is perfectly entitled to approach you with a proposal to terminate the employment contract by mutual agreement through a settlement agreement. You are never obliged to sign such an agreement, though.
Why would an employer offer a settlement agreement during illness?
Employers sometimes opt for a settlement agreement because an official dismissal procedure through the UWV (Employee Insurance Agency) or the cantonal court is almost always blocked during the first two years of illness. With a settlement agreement, they can bypass that legal hurdle, provided you agree.
Reasons employers put forward include:
- The expectation that you will not return to your own role or to the company
- An upcoming reorganisation in which your position is being made redundant
- A breakdown in the working relationship that arose before or during the period of illness
- The costs associated with continued long-term sick pay
Bear in mind: the fact that an employer has a reason does not automatically make the offer fair or advantageous to you.
What should you look out for when you receive a proposal?
A settlement agreement during long-term illness has significant consequences, including for your financial situation after the termination. The most important points to consider are set out below:
- Transition payment check whether the compensation offered corresponds to the statutory calculation based on your years of service and salary.
- End date: the agreed end date must be at least equal to the notice period your employer is required to observe.
- Unemployment benefit (WW) in order to qualify for unemployment benefit following a settlement agreement, the termination must not be deemed your fault by the UWV. The wording in the agreement is decisive in this regard.
- Sickness benefit (Ziektewet): if you are still ill after the end date, you may be able to apply for a sickness benefit from the UWV. This depends on your circumstances and the timing.
- Full and final settlement many settlement agreements contain a full and final settlement clause. This means you will be unable to make any further claims afterwards. Make sure you understand exactly what you are giving up.
- Cooling-off period: you are legally entitled to a fourteen-day cooling-off period after you have signed. Use this time wisely and seek legal advice.
What are the most common mistakes when signing?
People who are off sick sometimes sign too hastily, simply because they are exhausted or feel pressure from their employer. That is understandable, but it can prove costly.
Arrange a no-obligation chat and discover how we can help you.
Plan a conversationCommon mistakes include:
- Signing without understanding the consequences for unemployment benefit
- Agreeing to a compensation amount that is too low
- Failing to check whether the notice period has been applied correctly
- Not using the cooling-off period to obtain advice
- Accepting an agreement without negotiating better terms
A fair offer is possible, but you will only know once you have had it assessed. For a complete overview of everything involved in this subject, read more on the page Settlement agreement during illness: everything you need to know.
How strong is your negotiating position?
Many employees believe they have no say in the matter, particularly when they are ill. But that is a misconception. The prohibition on dismissal during the first two years of illness actually gives you a strong position. Your employer needs your signature to terminate the employment contract.
This means you can negotiate over:
- A higher payment than the statutory minimum
- A longer notice period to give you more time
- Payment of outstanding holiday entitlement or a bonus
- Outplacement support or a training budget
- A neutral or positive reference
The stronger your case and the better prepared you are, the more scope there generally is to secure better terms.
When is a settlement agreement actually a sensible choice?
There are situations in which a settlement agreement is also the best outcome for the employee. Consider a working situation that had already broken down seriously before the illness, or a position that no longer exists following a reorganisation. If the realistic prospect of returning is slim, ending the employment relationship on agreed terms may bring more peace of mind than a lengthy legal process.
But even then, the same rule applies: always have the agreement assessed before you sign. What appears reasonable at first glance may still contain disadvantages that only become apparent later.
Why Labour Lawyer Eindhoven
At Arbeidsjurist Eindhoven, we help employees in the Eindhoven and Brabant region who are faced with a settlement agreement during or after long-term illness. We look at the content of the proposal together with you, explain the legal consequences clearly, and explore whether there is scope for better terms.
You do not have to face this alone. Contact us without obligation for an initial consultation, so that you can make a well-considered decision with peace of mind.
Frequently asked questions
Is my employer allowed to offer me a settlement agreement while I am off sick?
Yes, they are. An employer is always entitled to put forward a proposal for a settlement agreement, even during illness. However, you are never obliged to accept it. The prohibition on dismissal protects you against unilateral termination, but not against an offer that you are free to decline.
Will I lose my right to unemployment benefit if I sign?
Not automatically. If the settlement agreement is drafted correctly, with the right wording and a proper notice period, you may subsequently qualify for unemployment benefit. The UWV assesses whether the termination is not attributable to you. Always have the agreement checked before you sign.
How long is my cooling-off period after signing?
After signing, you are legally entitled to a fourteen-day cooling-off period. Within that period, you can dissolve the agreement in writing without needing to give a reason. If your employer has not informed you of this cooling-off period, a period of three weeks applies instead.
What if I am still ill after the end date?
If you are still ill on the end date of the employment contract, you may be able to apply for a sickness benefit from the UWV under the so-called safety net provision. Whether you receive benefit, and how much, depends on your individual circumstances. It is advisable to look into this in advance so that you are not caught off guard.
We're happy to help you brainstorm ideas. For advice tailored to your specific situation, we'd be happy to sit down with you. No rights can be derived from the content of this page and it may contain inaccuracies.
