Can a sick employee enter into a settlement agreement?

There may be times during illness when an employee and employer come to the conclusion that it is better to part ways under a settlement agreement. This may be for a variety of reasons, and sometimes an end of employment may even contribute to recovery. Nevertheless, sick employees and termination should be handled with caution and great care. In this blog, we explain the risks and what to watch out for (practical tips).

Main rule: a sick employee cannot consent to dismissal

The main rule is that a sick employee cannot consent to dismissal because it makes him "culpably unemployed." This is because a sick employee is entitled to wages during illness from the employer. If the employee agrees to the dismissal and then leaves sick, he loses this right. In doing so, he disadvantages the UWV, because he then becomes subject to the Sickness Benefits Act. Based on this "act of prejudice," the UWV can therefore reject the Sickness Benefits Act benefit. At the same time, a sick employee cannot claim WW benefit either, because for that you have to be available for work and to apply for it. Thus, a sick employee runs a great financial risk if he agrees to be fired.

Exception: short-term recovery expected

The only possibility in which a sick employee does agree to a settlement agreement is if the employee is certain that he or she will be recovered by the end date. This may be the case, for example, in the event of situational disability: the reason for the illness lies in the work situation with the current employer. Think, for example, of a labor conflict. Sometimes becoming detached from the employer can then even contribute to recovery. The employee then does not leave sick and can apply for unemployment benefits. So the employee must then be able to apply for and return to work from the end date.

Care required

Do not put pressure on a sick employee to agree to a settlement agreement. This is not in line with good employment practice and may even lead to culpable conduct. An employee can then (in the worst case scenario) claim equitable compensation through the courts. It is therefore important that such a process is approached with due care and not simply communicated that the employer wants to say goodbye. It is recommended that you seek guidance from an employment lawyer.

Practical Tips

- Handle sick employees and layoffs with restraint, and especially do not put pressure on a sick employee to agree to layoff.
- Involve the company doctor. Does he indicate that recovery can be expected in the short term and/or the illness is due to the work situation? Then a settlement agreement can be considered.
- The employee should be able to make an informed decision, for which reason the employee should be encouraged to seek legal advice. Offer a budget for this purpose.
- Agree that the employee reports recovered before the employee signs the settlement agreement

Questions about/need guidance on offering a settlement agreement during illness? Contact us, we are happy to think with you.