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A wages sanction: not always payable by the employer


The employee is overdue with submitting the WIA (Work and Income According the Ability to Work Act) application. The UWV (Employee Insurances Implementing Agency) decides to extend the duration of the obligation to continue to pay wages. Is the employer entitled to stop paying wages?

Ruling of the Sub-District Court
The reply of the Sub-District Court in Utrecht to this question was affirmative. The case is as follows. The employee applied for WIA benefits well after the end of a two-year disability period. This application being overdue, the UWV imposed a wages sanction on the employer. The 104-week period was extended by the period that submission of the application was overdue: in this case 43 days. The employer stopped paying wages, as the employee was overdue with submitting the application.

The employee initiates interlocutory proceedings, claiming the ongoing payment of his wages. He asserts that the overdue WIA application was attributable to the employer, as the P&O consultant could allegedly not be reached by phone to help with the application. The employee failed to substantiate this assertion in court. Moreover, the employer alerted the employee to his obligation to submit the WIA application well before expiry of the statutory period. The employee nevertheless failed to submit said application on a timely basis. The Sub-District Court holds that employee's wait-and-see attitude resulted in the overdue submission of the WIA application. The employee is therefore not entitled to receive wages over the period in respect of which the wages sanction has been imposed. The Sub-District Court therefore found in favour of the employer.

Employee is responsible for submitting the WIA application
The employee receiving disability benefits is responsible for submitting the WIA application. If this application is not made on a timely basis then the employer's obligation to continue to pay wages is extended. However, an employee failing to submit the WIA application without offering proper substantiation does so at his/her own account and risk. In such an event, the employer is entitled to discontinue payment of wages for the duration of the wages sanction. A consequence of the wages sanction is obviously an extension of the period of the prohibition against termination.

Dispute Settlement clause in CAO
Abovementioned ruling is also relevant in view of the Sub-District Court's decision on a clause in a CAO (Collective Labour Agreement). The pertinent CAO contained a dispute settlement clause. Under this clause the Disputes Committee is competent to hear disputes between employer and employee about employment contract, standing rules or terms of employment. A Disputes Committee ruling is required before institution of proceedings. Therefore, the employer feels that the Disputes Committee, and not the Sub-District Court, is competent to hear the dispute.

The Sub-District Court does not agree with the employer in this regard. Rightly, the Sub-District Court holds that the wording of the CAO clause and the interpretation based on objective criteria of this wording are decisive in construing CAO clauses. The Sub-District Court acknowledges that construing a CAO does not hinge on the intentions of the parties regarding this CAO. The Disputes Settlement clause, therefore the Sub-District Court, regards the relationship under employment law as set forth in the Burgerlijk Wetboek (Dutch Civil Code) and is, moreover, set out in very broad terms. Additionally, the Disputes Settlement clause lacks an emergency option. Strict enforcement of the Disputes Settlement clause would therefore result in situations in which a person seeking justice is prevented from being heard before a Sub-District Court. The Sub-District Court holds this interpretation to be incorrect. The employee's claims are therefore allowed.

Even though the Sub-District Court judgement may make sense, the question is whether it is correct from a legal point of view. After all, the wording of the CAO is clear. Under the pertinent CAO clause, disputes are to be brought before the Disputes Committee. This ruling reaffirms that a check of the wording of the CAO is essential before a procedure can be started. One may after all find that the CAO in question contains a dispute settlement clause, on the basis of which the person seeking justice is prevented from bringing his claim directly before the Sub-District Court.

To avoid wages sanctions and an extension of the prohibition against termination, it is essential to alert the employee receiving disability benefits to his obligations and to help him apply for WIA on a timely basis. Where the WIA application is not submitted by the employee on a timely basis, an employer is entitled to take action against an employee who is unable to advance proper grounds for the delay.
Also, it is essential to check the wording of the CAO before a procedure is started. If the CAO contains a Dispute Settlement clause then the Sub-District Court may prove not to be competent.