The Working beyond the State Pension Age Act came into effect in the Netherlands on 1 January 2016. The purpose of this Act is to make working beyond the state pension age more attractive for persons who are eligible to receive state pension.
Impact on employers
Firstly, the obligation for employers to continue to pay salary to employees during illness who have reached the state pension age, will be reduced from up to 104 weeks, to up to 13 weeks.
Secondly, in the case of persons who are eligible to receive state pension, the prohibition against termination of employment during an employee’s illness, is now just for six weeks, instead of the usual 104 weeks. However, a period of two years will apply if the illness has commenced before reaching the state pension age.
Thirdly, reduced rehabilitation requirements apply for persons who are eligible to receive state pension.
Finally, for persons who are eligible to receive state pension, there is a maximum of six temporary employment agreements that may be concluded within a period of up to four years (before it automatically changes into an employment agreement for an indefinite period of time), instead of the usual three contracts within a period of up to two years. After an interim period of more than six months, a new chain will start to run.
For employers, it is now more attractive to employ employees and keep them employed after they have reached the state pension age. The employer will, however, have to take the following steps:
- terminate the employment agreement when the employee has reached the state pension age (this can be done without the consent of the employee), and subsequently
- enter into a new employment agreement for a fixed term.
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Van Hall Arbeidsrecht (The Netherlands)
Christianne E. Bouma, Partner