Working after retirement age

Retirement or General Old Age pension is for many people the moment to stop working. Working after this age is not a problem, but how does this work legally?

Working after reaching the retirement age

That many things have changed after the introduction of the Work and Security Act (WSA) on the 1st of July 2015 is commonly known. A less discussed topic in this respect, although very important, is the willingness of the government to stimulate that employees keep on working after reaching the retirement age. Over the past years the legislator has been easing the (fiscal) rules, but after the introduction of the WSA and the Act on working after retirement age (in place since the 1st of January 2016) the position of older employees only has been improved more and more.

No transition compensation

When an employer has an employee in his company who reaches the retirement age and decides to stop working, the employer does not have to pay a transition compensation.

No prohibitions to dismiss

The WSA stipulates furthermore that the majority of the regular prohibitions to dismiss, like illness and membership/candidacy of a Works Council, do not apply to dismissal in the case of reaching the retirement age. The only restriction which still does apply is the prohibition to dismiss in case of illness. This however can become hard to prove by an employee in court, if this occurred in his particular case.

Illness and reintegration

An employer only has to continue with payments to an ill worker, who has reached retirement age, for a maximum of 13 weeks (instead of the regular 104 weeks). Also the period for reintegration obligations as the period for which the prohibition to dismiss applies in case of illness has been shortened to 13 weeks. The reintegration obligations which remain

on the employer are less burdensome. Examples of this are the obligation to find suitable labour at another employer and the obligation to draft an action plan. For the older employees this does not have to happen any longer.

No permission by a judge or the Employees Insurance Agency

After the 1st of July 2015 it is no longer necessary for certain dismissals related to retirements that judges or the EIA give their prior permission. The law stipulates that the employer is authorised to rescind the labour agreement when, but also after the day on which an employee reached his/her retirement age (art. 7:669 paragraph 4 CC). An employer can use this article therefore once when his/her employee reaches this age in order to dismiss him/her.

Watch out: this only applies to labour contracts which were in force before reaching the retirement age. When the employer uses the mentioned article once and rehires the employee afterwards again, the normal dismissal protection applies once again. This means that prior permission of a judge or the EIA is then again necessary in order to dismiss the employee.

Period of notification

The period of notification of the termination of a labour agreement, when retirement age is reached, is always one month.

Working after retirement is not a right

The employer does not have to accept the request of an employee who wants to work after reaching the retirement age. When there is no place left in the company, a refusal to keep the employee in service is legit.

Incentive

Employers are stimulated by the mentioned measures to keep older employees in service. The obligations and risks are reduced for employers and on the fiscal level many advantages are created for both employers as employees. When the situation occurs that an employee requests to stay after reaching retirement age, this is something to consider as employer.

More information

When you are confronted with such a situation and would like advice, please contact our attorney, Suzanne van Dijsseldonk LLM.