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Dormant Employment Relationship
A dormant employment relationship is an employment contract that is not terminated after two years of illness, allowing the employer to avoid paying a transition allowance.
A dormant employment relationship arises when an employee remains fully work-disabled after 104 weeks of illness, but the employer does not terminate the contract. Wages have been stopped, no work is performed — the contract "sleeps".
Employers did this primarily to avoid paying a transition allowance.
The Supreme Court largely ended this practice in the Xella judgment (2019): in accordance with good management practices, an employer must generally cooperate with termination at the employee's request and pay the transition allowance.
Employers can subsequently recover the paid transition allowance through the UWV's compensation scheme. A dormant employment relationship is generally no longer worthwhile.
“Following the Xella judgment, the employer had to terminate the dormant employment relationship upon request and still pay the transition allowance.”
Source: handmatig
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