Employment Contract Does not End by Performing Suitable Work for Another Employer

An employer was ordered to cooperate in terminating the employment contract with a long-term labour incapacitated employee and to payment of the transitional allowance. The employer's defence that the employment contract had already ended from the moment when the employee had entered into an employment contract with another employer to perform suitable work there was rejected, because the employment contract had not ended as its result.
Since 1998, an employee had worked for an employer as a concrete pump operator for 36 hours a week. In 2016 he had fallen ill for this work.
In 2018, when he applied for a WIA benefit, the UWV refused to grant the WIA benefit because the employee was considered to be labour incapacitated for less than 35%. The UWV expected no change in the employee's medical situation. No suitable work for the employee was available in the employer’s company, but suitable work had been found in the company of another employer. Initially he was seconded there as a handyman for 20 hours a week. After the WIA examination, he was offered an employment contract there.
In 2021, the employee asked his original employer to terminate the employment contract by mutual consent and to pay him the transitional allowance. According to the employee, the employment contract was a dormant one, which, according to the case-law of the Supreme Court, should be terminated by mutual consent at the employee’s request and by payment of the transitional allowance.
The employer rejected his request.
According to the employer, the employment contract had already been terminated. The employee had started working for another employer in 2017 and a final settlement of the employment contract had been made in 2018. The employer also pointed out that the employee had a business of his own as a furniture manufacturer, and that the employee had never offered his services again.
The employee then claimed before the Sub-district Court that the employer should be ordered to cooperate in the termination of the employment contract and to payment of the transitional allowance.
The Sub-district Court stated that it had to decide whether there actually was a so-called dormant employment contract: an employment contract in which an employee has been ill for more than two years, had no longer received wages and in which the employer had failed to terminate the employment contract, although he was legally authorized to do so.
The Sub-district Court rejected the employer's defence that there was no dormant employment. The Sub-district Court also pointed out that the various ways in which an employment contract can be terminated are regulated by law. The employer had not specified in which of the ways, set out in the law, the employment contract would have been terminated, but it was certainly not by the employer with the employee’s consent, since the law requires the consent to be given in writing.
Even if that would have been otherwise, according to the Sub-district Court, the consent could not be derived from the circumstances. The final settlement by the employer did not terminate the employment contract, nor did the mere fact that the employee complied with it. Entering into an employment contract with another employer also did not imply that the employment contract had ended, certainly not if it took place in the context of a reintegration.
And finally, working in your own company does not terminate an employment contract either.
The Sub-district Court ordered the employer to cooperate, in conformity with the case-law of the Supreme Court, in the termination of the employment contract by mutual consent, whereby the employee should be paid the transitional allowance that would have been due in the event of termination on the first day on which the employer could have terminated the employment contract for the employee's long-term labour incapacity (which was at the end of the two-years of prohibition on termination during illness).

Termination of an employment contract with an long-term labour incapacitated employee continues to cause problems in practice, even though it has become clear by now that the employer has to cooperate in terminating the employment contract by payment of the transitional allowance and that the employer subsequently can ask the UWV for the compensation of the transitional allowance. If there may be reasonable misunderstanding over the amount of the compensation of the transitional allowance the UWV has to pay to the employer, it may make sense for an employer to have himself ordered to pay a certain amount for the transitional allowance at the request of the employee. In that case, when applying for compensation of the transitional allowance, the employer can point the UWV to the decision of the Sub-district Court in which the amount of the transitional allowance has been determined. Reasonably, the UWV should comply with it when it determines the amount of the compensation.
In the above case, however, there mainly seems to be a lack of understanding on the part of the employer. The employer's arguments were leading nowhere. The employment contract cannot be terminated on entering into an employment contract with another employer for the performance of suitable work, because the law explicitly stipulates that an employment contract will not end in that case. And the law expressly stipulates that both in case of termination of an employment contract by mutual consent and in case of a notice of termination by the employer with the employee’s consent have to be done in writing.
This was certainly not the case here.