VSO (Settlement Agreement) during illness: the complete explanation

Entering into a settlement agreement (VSO) during illness is a difficult issue. When you are sick, there are extra rules and protections that ensure that you cannot simply be fired. Nevertheless, in some situations, a VSO can be a good solution for both the employee and the employer. 

VSO during illness: but what is a VSO?

A settlement agreement (VSO) is a written agreement between an employer and employee to terminate employment under certain conditions, without the intervention of the UWV or the subdistrict court.

In a regular dismissal procedure, the employer has to prove a valid reason for dismissal to the UWV or the subdistrict court. With a VSO, this is not necessary because both parties agree voluntarily, making the process faster and more flexible.

A VSO must meet legal requirements: in writing, a 14-day cooling-off period for legal advice, and clear, complete agreements to avoid later disputes.

Contract types and illness

Difference between permanent and temporary contracts in sickness

During illness, it matters whether you have a permanent or a temporary contract. A temporary contract that expires during illness can be extended, but the employer often does not do this. You can in this case at the UWV apply for sickness benefit. With a permanent contract, you are better protected during illness and, in principle, the employer may not dismiss you.

What happens to a temporary contract that expires during illness?

If your temporary contract expires while you are ill, you can apply to the UWV for sickness benefit. From 1 January 2020, you will also be entitled to a transition allowance if your temporary contract is not extended. 

The amount of the transition allowance is one-third of a monthly salary per year worked.

Sample calculations of severance payments

• Six months worked: You are entitled to half of a third monthly salary, i.e. a sixth monthly salary.
• Three years worked: You are entitled to three times a third monthly salary, i.e. a whole month's salary.

Continued payment during illness

Employer's obligation to continue paying wages

During the first two years of illness, the employer is obliged to continue paying your salary. This is at least 70% of your usual salary. In some collective agreements or contracts, it may be agreed that the employer must continue to pay the full salary in the first year.

Continued payment on partial return to work

If you partially return to work, the employer must pay you in full for the hours worked and at least 70% of your salary for the remaining hours.

Wage sanctions for non-cooperation in reintegration

If you do not cooperate in your reintegration, the employer may stop your salary. This may happen, for example, if you are unavailable to the company doctor or fail to show up for surgery. 

Before stopping your salary, the employer must first warn you in writing and give you a chance to still cooperate.

Reintegration obligations during illness

The employer must make an effort to help you reintegrate. This means that he must draw up an action plan together with you. You as an employee have an obligation to cooperate in your reintegration.

The company doctor plays a central role in your reintegration process. If you disagree with the company doctor's opinion, you can request a second opinion from another company doctor. If you also disagree with this second opinion, you can request an expert opinion from the UWV.

May dismissal during illness?

During the first two years of illness, there is a ban on dismissal. This means that your employer may not dismiss you because of your illness. However, there are exceptions to this ban.

Exceptions to the ban on dismissal

• Redundancy permit with the UWV: The employer can apply for a dismissal permit from the UWV. This is rarely granted if you are sick, unless the sick notice was given after the application.
• Dismissal through the courts: The court can grant dismissal if there are other valid reasons, such as dysfunction, unrelated to your illness.
• Work refusal and insufficient reintegration: If you do not cooperate in your reintegration, the employer may eventually fire you.
• Company closure or reorganisation: In the case of a company closure or reorganisation, dismissal can sometimes be allowed, including during illness.

VSO during illness

Employers may offer a VSO during sickness for various reasons. For example, to avoid the cost of continued payment during illness or because they no longer have suitable work for you.

It is important that you are fully recovered before signing the VSO. If you report better while you are still ill, you risk not being entitled to benefits.

If you report sick again with the same complaints after signing the VSO, the UWV may judge that you have been continuously ill, which could lead to withdrawal of your benefits.

A VSO during illness can only be successful if all the terms are clear and meet the legal requirements. Have the settlement agreement checked by a employment lawyer to avoid problems.

Take contact at for advice and guidance on closing a VSO during illness.