Unfit for work: Legal insights

Unfit for work: Legal insights

By Attorney-at-Law Suhendra Leon. This email address is being protected from spambots. You need JavaScript enabled to view it.

The cardinal rule in employment law is “no work, no pay”. But as with every cardinal rule, there are multiple exceptions – one of these being when the employee is unfit to work due to sickness or an accident. In this article, I will give some information regarding unfitness to work due to illness.

Article 7A:1614c of the Civil Code stipulates that the employee retains his entitlement to wages for a relatively short time if he has been prevented from performing his work as a result of illness or accident, unless the illness or accident is caused by premeditation or indecency or is the result of a physical defect, of which he intentionally gave the employer false information when entering into the agreement. Parties also have the possibility to agree in writing (or collective labour agreement [CLA]) to deviate from this article.

We could have philosophic discussions regarding when an illness or accident is premeditated, caused by indecency or if the employee provided false information when entering into the labour agreement. The employer would have to bear the burden of proof of such circumstances. As the employer is often not (totally) aware of the medical information of employees, because of the right to privacy of the employer, there is not much case law regarding this.

The phrase “retains his entitlement to wages for a relatively short time” is the part that entices more discussion. The case law does not specify how long a relatively short time is. There is some consensus that it is six weeks, but case law shows that it can vary from two weeks to one year depending on circumstances, for example, the duration of employment, and the age of the employee. In some employment agreements (and CLAs), parties have agreed that during illness the wages will be paid for a fixed period, for example one year. It is also legally possible for parties to exclude salary entitlement during sickness.

Most employers or employees will not see the significance of the phrase “retains his entitlement to wages for a relatively short time” when they are unfit to work. That is because most employees are insured for sick pay under the Health Insurance Ordinance (via Social and Health Insurances SZV). This ordinance stipulates that the employee is entitled to sick pay, consisting of 80 per cent of his salary. In practice, the employer advances the sick pay, and later claims this amount from SZV.

Employees who work less than five days and employees who exceed the SZV wage limit are not insured with SZV. For them, this simple phrase can have serious consequences if they are unfit to work due to illness for a longer period. They do not have a safety net of the Ordinance, and are only entitled to wages for a relatively short period, unless agreed otherwise with their employer.

These employees are advised to take out disability insurance. However, this is not affordable for every employee, as disability insurance can be expensive. Last year, Government announced that the SZV wage limit would be increased drastically. Employers may be opposed to this, because it will increase costs, as they suddenly would have to pay premiums to SZV for employees they did not have to before. I would plead for a revision of the Health Insurance Ordinance, combined with Article 7A:1614c of the Civil Code, in a manner that protects all employees (including part-timers) during vulnerable times such as illness, while also considering the labour costs for employers. Simply raising the wage limit for the Health Insurance Ordinance is insufficient to solve a structural problem.

The country package related to COHO speak of flexibilization of the labour market. In a flexible labour market, employees and employers must be able to agree to part-time or flexible employment, without adverse consequences, such as not having health insurance or income in the event of incapacity for work. So far, my personal ideas are about social justice.

A misconception is to think that an employee who is entitled to sick pay from the SZV, is not entitled to wages, and is only entitled the 80 per cent sick pay advanced by the employer. If parties do not agree in the employment agreement (or CLA) that no salary is due during unfitness to work due to illness, the employee is entitled to wages for a relatively short period of time. Article 7A: 1614c of the Civil Code therefore entails that the employer must pay 20 per cent salary for a relatively short period of time to supplement the 80 per cent sick pay advanced. Therefore, employers should take this into account when drafting employment agreements.

Finally, in accordance with Article 7A:1615h of the Civil Code, the termination of an employment contract with a sick employee within the first year of unfitness due to illness is null.

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