If a work-disabled employee does not cooperate enough to a successful re-integration, the employer has the option to impose one of two different wage-related penalties. These are the suspension of wages (called ‘loonstop’ in Dutch) or holding back wages (called ‘loonopschorting’ in Dutch). It is important to choose the right penalty and provide the correct information about it to the employee. The exact details are all discussed in this in-depth article.
A suspension of wages means the employee in question is no longer entitled to wages. Only when (s)he meets his/her requirements will the employee receive wages again. When holding back wages, the employee is still entitled to receive wages but the payment of these wages is temporarily withheld until the employee meets his/her requirements. Holding back wages is therefore mostly a means for the employer to exert financial pressure onto an employee, i.e. to get leverage in a situation.
Duty to inform
Before an employer can impose one of the two penalties, (s)he must first fulfill the duty to inform. This duty requires the employer to notify the employee as soon as possible of the planned suspension or holdback of wages. This gives the employee in question the opportunity to still cooperate.
This is an important requirement. Strictly speaking, the notification needn’t be done in writing, but we recommend to do so. The employer will then have proof of fulfilling his/her duty to inform.
From time to time, it happens that employers confuse a suspension of wages with holding back wages. Especially in Dutch, the word ‘loonstop’ is frequently confused with ‘loonopschorting’ and the employer uses the latter word where the former was meant. This means an employer then enacts a holdback of wages instead of a suspension of wages. Such a mistake must be borne entirely by the employer. (S)he cannot take the position afterwards that a suspension of wages was meant. Rather, the employer will have to pay the employee the wages that were withheld. It is therefore important to use the correct term when notifying an employee.
Holding back wages
An employer may hold back wages in the event an employee fails to comply with reasonable regulations regarding the provision of information the employer needs to determine the employee’s right to wages. Those regulations must be laid down in writing, however, as stated in article 7:629, section 9 of the Dutch Civil Code.
The employer needs specific information to determine the employee’s right to wages. An example of such information is the degree of work disability. The employee in question must provide this information to the employer, for instance by means of a check-up with the occupational health physician.
Suspension of wages
The suspension of wages is regulated by article 7:629, section 3 of the Dutch Civil Code. Here, it is laid out that an employee is no longer entitled to wages:
- if the work disability is caused by the employee him-/herself or as a result of a(n) illness or disability about which the employee has provided false information in the context of a pre-employment examination and therefore the assessment of whether or not the employee could bear the workload caused by the job position in question could not be carried out correctly;
- for the time the employee obstructs or delays his/her own recovery;
- for the time the employee – despite being able to – does not perform alternative work for the employer (or a third party designated by the employer) without good reason and for which the employer gives the employee the opportunity;
- for the time the employee refuses, without good reason, to comply with reasonable regulations or measures implemented by the employer (or an expert appointed by the employer) intended to enable the employee to perform alternative work;
- for the time the employee refuses, without good reason, to cooperate in the preparation, evaluation and adjustment of a plan of action;
- for the time the employer applies for a WIA benefit later than prescribed without good reason to do so.
Work disability caused by intent
In practice, it is very rare for work disability to be caused by intent. Case law has already determined that any disability caused by practicing a danger sport or undergoing cosmetic surgery without medical necessity will not be ruled as ‘caused by intent’. After all, ‘intent’ here means that someone willingly and intentionally made him-/herself unable to work; something that is virtually never the case.
Amount in wages
The Supreme Court has ruled that an employer and employee may make agreements on extra-statutory pay during sick leave in the employment contract or through the collective labor agreement.
The minimal statutory pay an ill employee is entitled to during sick leave is 70% of the employee’s regular wages. However, on the basis of the collective labor agreement or by including alternative agreements in the employment contract, an employee can opt to pay the ill employee more than 70%. Other agreements can be made on the loss of the right to such extra-statutory pay; for example, that the employee loses the right to extra-statutory pay in the event of ‘fault or action of his/her own’.
The case in question dealt with by the Supreme Court involved an employee playing futsal. Several times, this caused him to become work disabled due to an injury. In response, the employer asked the employee to stop playing futsal; a request ignored by the employee. The collective labor agreement included a provision which states that an employee loses his/her right to wages if (s)he gets work disabled due to ‘fault or action of his/her own’. For that reason, the employer was legitimized to not pay the employee any extra-statutory pay, despite the fact the work disability was not caused by intent.
Supreme Court, March 14, 2008; ECLI (abridged): BC6699
Obstructing or delaying recovery
In principle, an employee has a great deal of freedom in choosing the way in which (s)he want to recover. This freedom is based on each individual’s fundamental right to bodily integrity and the human right to privacy. For this reason, a suspension of wages on the ground of obstructing or delaying recovery is not often the case.
According to the Court of Amsterdam, there are limits to the rights of employees.
If an employee exercises his/her rights to such an extent that it obstructs or delays recovery, the employer does not have to continue paying wages to the employee during that period of time.
Court of Amsterdam, August 9, 2012; ECLI (abridged): BX5906
Refusing to perform alternative work
In practice, refusal to perform alternative work regularly occurs as a reason for enacting a suspension of wages.
Alternative work here means all work which can be done by the disabled employee given his/her strengths and skills, unless it cannot be expected due to the physical, mental and/or social nature of the employee. In other words: the employee can have a good reason for refusing to perform alternative work. In that case, a suspension of wages may not be enacted.
By rule, it is the occupational health physician who determines whether or not alternative work can be performed by the employee. However, if the employee disagrees with the physician, (s)he may request a second opinion.
No more right to wages
If during the re-integration, an employee refuses to perform alternative work, (s)he loses any right to wages.
This loss also applies to the period in which the employee is not able to work but also not yet able to re-integrate. However, the employer must first inform the employee in question of the consequences of refusing to do alternative work before a suspension of wages can be enacted.
Supreme Court, June 6, 2014; ECLI (abridged): 1341
Reasonable regulations and measures taken
Not complying with reasonable regulations is in practice also frequently a reason for a suspension of wages. Such regulations include the rules for absenteeism or any measures taken to re-integrate the ill employee.
The regulations and measures must be ‘reasonable’ in order to warrant a suspension of wages in the event an employee does not comply with them. Moreover, the regulations must be laid down in writing.
It is possible for an employee to have a ‘good reason’ for not complying with reasonable regulations or measures taken. For example, an employee who repeatedly fails to see the occupational health physician may have a good reason for doing so. Before enacting a suspension of wages, always check with the employee in question the reason(s) for not complying.
A suspension of wages can only be enacted when the employee does not comply with regulations and measures implemented to enable to employee to perform alternative work. When the employee is in violation of any reasonable regulations about the provision of information necessary to determine the right to wages, a temporary holdback on wages is in order instead.
Preparing, evaluating and adjusting a plan of action
If an employee refuses to cooperate in the preparation, evaluation or adjustment of the mandatory plan of action, a suspension of the employee’s wages can be enacted. Again, always check with the employee in question the reason for refusing to cooperate.
Application for WIA benefit filed to late
If the employer applies for a WIA benefit later than prescribed without good reason(s) to do so, the employer may enact a suspension of wages. The application for the benefit must be filed at the latest in the 93rd week (1 year and 9 months) of sick leave.