Suspension and Ceasing to Pay Wages During Illness; an Important Difference
Court of Appeal of Leeuwarden, 29 March 2011, LJN
BQ0686
The continued payment during illness has been regulated in
Section 7:629 of the Dutch Civil Code. The main rule is that during
illness an employee is entitled to continued payment of his salary.
The law stipulates that the employee is entitled to a certain
minimum. The amount that has to be paid in addition to the
statutory minimum, for instance 100% in the first year and 70% in
the second year, is often further regulated within the framework of
the employment contract or in a Collective Bargaining
Agreement.
In the event of illness, the employer and the employee have all
kinds of obligations, aimed at determining whether the employee is
actually unfit for work and at giving shape to the reintegration as
soon as possible. The law includes various sanctions which the
employer may (and must) apply if the employee does not meet his
obligations.
For instance, the law stipulates – briefly put – that the
employee has to cooperate in order to determine whether he is
indeed unfit for work. Usually, this means that after an adequate
call the employee will come to the company doctor's surgery, so
that he can give an advice. If the employee does not meet this
obligation, the employer will have the right (and often also the
duty) to suspend the payment of the salary and to inform the
employee of this fact immediately. In that case the term “suspend”
is used. If the employee still appears at the surgery at a later
time and the company doctor can determine that he was actually
unfit for work as of the date of the sick report, the salary will
have to be paid still and with retroactive effect. But because the
employer had good reasons to suspend the salary, he does not have
to pay interest or an increase over the late payment.
If next the employee – once it has been established that he is
unfit for work – does not meet his reintegration obligations, his
entitlement to salary will lapse for the period in which he is in
default. These obligations may vary, but often disputes arise about
the question of whether the employee is actually able to perform
other work he is ordered to do, whether or not in the second track
reintegration, or if he refuses to cooperate in the drafting and
adjusting of a plan of approach. The employer may (and usually has
to) stop the salary payments in these cases and, once again, has to
inform the employee of this fact immediately. If the employer is in
the right, he does not have to make supplementary payments and
therefore in these situations the term “suspend”, which, after all,
suggests something temporary, is not correct. In the event of a
decision in favor of the employee, the salary, with interest and
statutory increase, will have to be paid.
In a case that was adjudicated on appeal by the Court of Appeal
of Leeuwarden, the employer was of the view that the employee had
not met his reintegration obligations, i.e. cooperating in the
second track reintegration, and he informed him that the salary
would be suspended. The employee disagreed. The Court of Appeal
ruled that the employer could have concluded rightfully that the
employee had not met his obligations and therefore, in principle,
he was not entitled to wages over the period in which he did not
meet his reintegration obligations. However, the employer had a
rude awakening, since the Court of Appeal ruled that by using the
word “suspend” the employer had given the employee the confidence
that, after still meeting his obligations, he would receive the
salary over the past period after all. In the words of the Court of
Appeal: “It may be expected of an employer that he carefully
chooses his words, especially when he uses such a drastic means for
the employee as is a sanction of withholding wages. The employee
has interpreted the (suspension) letter and (...) could have
interpreted it in conformity with the normal and legal meaning of
the word suspend. The employee did not need to understand that this
way the employer intended to cease the continued payment of wages
(…).”
This terminological mistake has considerable consequences.
Therefore, it is of great importance in practice to keep a sharp
eye on the distinction between “suspend” and “cease”, and to use
the correct terminology for the correct situation.