From 1 January 2016, changes to legislation are set to remove the key obstacles that prevent people entitled to the Dutch state pension (AOW) from being appointed or continuing to work. Here are the changes at a glance:
Obligation to continue payment of wages shortened
The obligation to continue to pay wages to ill employees who are entitled to the state pension will be limited from 104 weeks to a maximum of 13 weeks.
Reduced protection against dismissal
The prohibition on terminating employment during illness will also be limited from 104 weeks to a maximum of 13 weeks. The employer must demonstrate within 13 weeks (instead of 26) that there will be no recovery and that the stipulated work cannot be carried out in a modified form.
For employees who are or become entitled to the state pension before 1 July 2016, the 104 weeks will continue to apply for continued payment of wages and protection against dismissal until 1 July 2016. After 1 July 2016, the 13-week period will apply, unless the total 104-week period has elapsed.
Return-to-work obligations less strict
The twin-track process (offering suitable work at an alternative employer) is no longer applicable. This also applies to the obligation to draw up a plan of action.
Shortened notice period
The statutory notice period that applies to the employer has been shortened to one month (regardless of the term of the employment contract). Of course, parties are free to depart from this if it benefits the employee.
Regulations concerning successive fixed-term contracts
The regulations governing successive fixed-term contracts (ketenregeling) will be less strict for employment contracts entered into after reaching the age of entitlement to state pension. As a result, employees who are entitled to the state pension will have to work longer before having the right to a permanent employment contract.
Remuneration and flexible employment
The Minimum Wage and Minimum Holiday Allowance Act (Wet minimumloon en minimumvakantiebijslag) will also apply to employees entitled to the state pension with effect from 1 January 2016. However, the Working Hours (Adjustment) Act (Wet Aanpassing Arbeidsduur) will no longer apply to such employees.
What action should you take?
We recommend that you update your legal documentation for employees entitled to the state pension to reflect the new statutory framework. For this, statutory obligations to consult any Works Council, trade unions and/or individual employees apply.