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Wage costs losses

Wage costs losses

Wage costs losses are the losses that you incur as an employer due to having to pay your employee’s wages during his illness. In some cases you can recover your wage costs losses from a third party. This applies where your employee has become incapacitated as a result of an accident for which the person who caused the accident can be held liable.

For example, you may be able to recover wage costs losses if your employee is involved in a traffic accident or a violent crime. The person liable for the occurrence of the traffic accident or the violent crime should compensate not only your employee but also his employer.

The possibility of making such a claim is based on Article 6:107a, part 2 of the Dutch Civil Code: "If an employer (…) is required to continue the payment of wages to the injured person during sickness or incapacity to work and the injured person’s incapacity to work is the result of an event for which another person is liable, then the employer is entitled to claim compensation from this other person in the amount of the wages he has paid, but not exceeding the sum for which the liable person would have been liable if the employer had not had an obligation to continue to pay wages to the injured person, being an amount equal to the compensatory damages that the liable person is bound to pay to the injured person."

This provision means that in such situations the amount claimed cannot exceed the net wages paid to the employee.

If, as an employer, you want to recover these wage costs losses, it helps if your employee is prepared to cooperate. This is because you will need quite a lot of medical data for your employee. After all, you will have to prove that the employee’s incapacity to work was directly related to the unlawful action (for example the traffic accident or violent crime) by the person you are making a claim against.

It is also useful to assess in advance the financial situation of the person who is liable, in terms of income and capital. It would be a waste of time, energy and costs to discover after a difficult court case that the person liable did not have the financial means to actually pay the compensation. Liability as a result of a traffic accident is usually covered by an insurer, so in that case any compensation awarded is likely to be recoverable.

You can find more specific information about the recovery of sums awarded in court judgments under Debt Collection.

Information required

If you are an employer and would like an assessment of your legal options and the risks involved, you will need the following information and documents:

  • the employment contract and any applicable collective employment agreement
  • a specification of the net wage costs losses on a month-by-month basis
  • pay slips for the period for which wage costs losses are claimed
  • an extract containing the details of your company’s registration in the commercial register at the Dutch Chamber of Commerce
  • the name and address of the party who is liable
  • in the case of a traffic accident: if possible, a completed and signed accident report form
  • in the case of a violent crime: if possible, the complete police report
  • if available: a guilty judgment from the magistrates’ court
  • if the party liable is not known: date, time and location of the accident
  • medical reports (and progress reports) from the occupational health doctor
  • the names and addresses of the medical professionals treating the employee
  • the name and address of the employee’s GP
  • documents granting authority to obtain medical records signed by your employee (the same number as the number of medical treatment professionals indicated plus 1 for the occupational health doctor and 1 for the GP)
  • any correspondence with the employee and/or the party liable.

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