Continuing to work after reaching state pension age
With the introduction of the Work and Security Act (WWZ), covered in earlier news bulletins, a number of rules have been relaxed with regard to the dismissal of employees who have reached retirement age. One of the new rules is that these employees can be dismissed without permission from the Employee Insurance Agency (UWV) if they reach retirement age after entering into the employment. Another important rule is that no transitional payment is due if the employment of a person entitled to state pension is terminated.
The Senate has adopted the bill on the Working Beyond State Pension Age Act (Wet Werken na AOW-gerechtigde leeftijd) )after the Statutory Pension Age Act. The objective of this act is to remove obstacles to employing or retaining persons who are entitled to a state pension. The bill will enter into effect as of 1 January 2016.
What will change?
Incapacity for work
In the first place, the obligation to continue to pay wages will be limited to 13 weeks once employees reach the age at which they are entitled to a state pension. This period is 104 weeks at the moment. Furthermore, supporting the employee in finding suitable work externally or formulation of an Action Plan (Plan van Aanpak) will no longer be required for employees who have reached the state pension age. In 2018 an evaluation will take place to assess whether this period can be reduced to 6 weeks.
Limitation of the notice period
The notice period for employers will be reduced to one month. Currently, the statutory notice period for employers is between one and four months.
Successive fixed-term employment contracts
The provisions on succession of fixed-term employment contracts (chain rule) will be amended for employees entitled to a state pension. Since 1 July 2015, no more than three fixed-term employment contracts may be entered into during a 24 month period. The legislative proposal states that in the case of employees entitled to a state pension, an indefinite employment contract will only be obligatory after six fixed-term employment contracts. The maximum duration has also been increased to 48 months instead of the current 24 months.
Adjustment of working hours
The Working Hours (Adjustment) Act (Wet aanpassing arbeidsduur) no longer applies to those employees entitled to a state pension with regard to number of hours of work. Therefore, employers are no longer obliged to comply with requests to extend or reduce the number of working hours.
The Minimum Wage and Minimum Holiday Allowance Act will also apply to employees entitled to a state pension.
Introduction of sickness benefit
Entitlement to Sickness Benefits Act (Ziektewet) will be introduced for certain employees entitled to a state pension for a maximum period of six weeks. Sick pay will be covered from the employer, as these employees no longer have to pay employee insurance premiums from the day on which they reach the state pension age.
These changes also apply to the public sector. The Central and Local Government Personnel Act (Ambtenarenwet) will therefore be amended
The obligation to continue to pay wages and prohibition against terminating employment in case of incapacity for work for 104 weeks will continue to apply for six months after the Working after the Statutory Pension Age Act comes into effect if:
- the employee has reached state pension age by the time the act enters into effect, or will do so within 6 months, and
- the employee is unfit for work on the date on which it enters into effect, and
- the 104 week period applies to them at that time.