The article “Continued payment of wages during sick leave from a cross-border perspective”, as published in edition 22 of this magazine, extensively sets out the more complex theory on this topic.

Long story short, this is a grey area because in cases of continued payment of wages during sick leave in combination with cross-border work, the rules relating to labour law and social security are often overlapping and even contradictory. In the unruly practice of consultancy and payrolling in cross-border work situations, this leads to interesting situations that legal specialists could spend hours discussing. However, for employers and employees this isn’t interesting but instead frustrating.. If you employ a person, you simply want to know the rules that apply and do what is necessary to comply with all requirements, ensuring that everything is fully organised for all parties. Sometimes employers and employees can sort things out together, though often irritation and a lack of understanding rear their heads, putting pressure on the cross-border collaboration.

A particular point of attention that is justly mentioned in the article “Continued payment of wages during sick leave from a cross-border perspective”, is the fact that things still go awry if a foreign employer wants an insurance policy to cover the Dutch obligation of continued payment of wages during sick leave, in spite of all ambiguity. Insurers have the freedom to define their own acceptance policy in this respect. As a result, this target group of foreign employers is generally excluded from the option of an insurance policy covering the risk of having to continue payment of wages during sick leave due to not being registered in the Dutch Trade Register. This is mainly based on the fact that according to European rules, the law of the policy holder’s country of registration (i.e. of the foreign employer) applies in a cross-border situation, and Dutch insurers are unwilling to be confronted with foreign law.

This situation occurred a few years ago and was more challenging to resolve. A Belgian employer had employed someone who worked and resided in Belgium for many years, based on a Belgian employment contract. At some point, this employee decided to start working part-time (50%) and was employed by a Dutch university for the remaining 50% of his working hours to teach in the Netherlands. Normally, the employee would continue to have social insurance in Belgium as he would continue working there more than 25% of the time. However, as he became a Dutch civil servant for 50%, the Dutch social insurance was prioritised. This employee therefore was covered by Dutch social insurance from that date onwards. This also covered the employee for the employment contract in Belgium for the Belgian employer.

This Belgian employer was required to have a Dutch payroll for withholding and paying Dutch social insurance premiums and contributions. Even if, based on theory and jurisprudence, it was unsure whether the Dutch obligation of continued payment of wages during sick leave would apply, this employer pre-emptively chose to take out a Dutch sick leave insurance policy in order to cover the risk that a court would deem that the employer has an obligation of continued payment of wages during sick leave. And to ensure that the employee would continue to receive an income in the event of sick leave. Please note that this situation is set to change as per 1 January 2020 for certain Dutch civil servants due to the introduction of the Wet Normalisering Rechtspositie Ambtenaren (Wnra) (Harmonisation legal position civil servants Act), pursuant to which they are classed as an employee rather than a civil servant in the applicable social security system. In this example, the result would be that the Belgian social security system would apply for all of the work performance of this employee (he substantially works in Belgium). In this article, we do not go into further detail of the scope and application of this change.