In practice, we often notice that employers are not well informed about the Act on Working after the State Pension Age. Therefore, we will discuss the main rights and obligations following from this Act in this blog.
The Act on Working after the State Pension Age entered into force on 1 January 2016. The purpose of this Act is to remove impediments for employers to employ persons who have reached the state pension age. For example, the Act implies that the employment contract with an employee that has reached the state pension age may be terminated without the approval of the UWV.
Obligations in case of illness
After the employee reached the state pension age, no second track (in Dutch: tweede spoor) reintegration needs to be followed and no Plan of Action needs to be drafted in case of illness.
In addition, the Act limits the period of the obligation to continued payment of wages, the prohibition of termination and the obligations to reintegrate the sick employee, to 6 weeks. However, based on the transitional provision that is included in this Act, a period of 13 weeks (and therefore not 6 weeks) applies to these obligations for now.
The transitional provision
The purpose of the transitional provision is to limit possible displacement between employees who have reached the state pension age and employees who have not yet reached the state pension age. The transitional provision was supposed to end on 1 April 2021. This indicated that as of 1 April 2021, the period of 13 weeks would be changed to 6 weeks in regard to the obligation to continued payment of wages, the prohibition of termination and the reintegration obligations during illness.
However, after the UWV expressed its objections against the implementation, the Minister of Social Affairs and Employment on 12 March 2021 announced that the transitional provision will not end before 1 January 2022. This means that for the provisions above, the 13-week period will still apply until 1 January 2022.
The notice period
The notice period for the employer is limited to one month, regardless of the length of employment.
The chain-regulation (in Dutch: ketenregeling) has been adjusted for those entitled to a state pension. After six fixed-term employment contracts or after four years of employment, the employment contract automatically becomes an employment contract for an indefinite period of time (instead of after three employment contracts or after three years of employment).
The Working Hours (Adjustment) Act
The Working Hours (Adjustment) Act no longer applies to those who have reached the state pension age. This means that the employer is not required to respond to requests to increase or decrease the number of working hours.
The Minimum Wage and Minimum Holiday Allowance Act
The Minimum Wage and Minimum Holiday Allowance Act also applies to employees who have reached the state pension age.
Benefits in case of illness
Benefits in case of illness (in Dutch: Ziektewetuitkering) have been introduced for certain employees who are entitled to a state pension, for the period of six weeks. The sickness benefits will be recovered from the employer because, as of the first day of the month in which the employee reaches the state pension age, the employee insurance contributions are no longer paid.
The employer does not owe any transitional payment if the employment contract is terminated on or after the day the employee has reached the state pension age.
Do you have any questions about (the transitional provision of) the Act on Working after the State Pension Age? Then please contact one of our lawyers.