Continued payment of wages in the event of illness: 70% of what wages?

According to Article 7:629(1) of the Dutch Civil Code, an employee who is unable to work is, in principle, entitled to continued payment of 70% of their “wages determined on the basis of time worked” for a maximum period of 104 weeks in the Netherlands.

If an employment contract or collective labor agreement does not specifically provide for continued payment of wages in the event of illness, Section 7:629 of the Dutch Civil Code (BW) automatically applies. This section stipulates that an employee is entitled to 70% of their wages for a maximum of 104 weeks in the event of illness. The employer is obliged to continue paying this wage, unless there are exceptions. This is on the understanding that if the wage exceeds the maximum daily wage as referred to in Article 17(1) of the Social Insurance Financing Act (Wfsv), the employee is not entitled to 70% of the excess.

But what exactly does ‘wage’ mean? And what about bonuses or expense allowances?

What does wage mean according to Article 7:629 of the Dutch Civil Code?

According to paragraph 8 of Article 7:629 of the Dutch Civil Code, in conjunction with Article 7:628(3) of the Dutch Civil Code, wage in the event of illness means: the wage determined on the basis of time.

If the wages are not determined on a time basis, the average wages can also be taken as a starting point. This means that extras such as bonuses or allowances are not automatically included in the wages to be paid.

Exception: the ruling ECLI:NL:RBNHO:2021:11785

An interesting ruling on this matter was handed down by the subdistrict court in case ECLI:NL:RBNHO:2021:11785. This case concerned the question of whether employer MSD was obliged to continue paying the SIP bonus and expense allowance during an employee’s sick leave.

The court ruled that it was not. The employee was not entitled to these extras on the basis of the law, the collective labor agreement, or good employment practices (Section 7:611 of the Dutch Civil Code). The SIP bonus and expense allowance did not fall under the legally required concept of wages.

What is 70% of the maximum daily wage?

Furthermore, anyone who earns more than the maximum daily wage is only entitled to 70% of that maximum daily wage in the event of illness, and not to the excess. The question of what this covers depends on what the parties have agreed in this regard.

An example of this is ECLI:NL:RBZWB:2023:1309. The parties disputed the meaning of the phrase “last (daily) wage” as included in the employment contract. This seemed to refer to the daily wage within the meaning of Article 17 of the Wfsv, but the court took a different view:

“This means that, in the absence of other circumstances relevant to what the parties were entitled to understand, the text of the employment contract is decisive for the meaning that the parties may attach to it. In the preliminary opinion of the subdistrict court, [the claimant] was entitled to understand from that text that she would continue to receive 70% of her last salary in the event of illness. This is because Article 8.4 refers to the ‘last (daily) wage’ (underlined by the subdistrict court). Daily wages within the meaning of Article 17 of the Wfsv are not earned, but determined. It is therefore not obvious that the article refers to the maximum daily wage as referred to in Article 17 of the Wfsv. [The claimant] did not have to understand that the term (daily) wage refers to the maximum daily wage as used in this legislation and by the Uwv.”

Contact an employment lawyer in Amsterdam about continued payment of wages in the event of illness

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