What are the key changes?
No automatic termination rule
Employers can no longer terminate employment contracts solely because an employee is declared permanently incapacitated (whether total, absolute, or severe). Now, before they terminate on the grounds of permanent incapacity, they must follow a set procedure:
- Employee 10‑day response period
Following declaration of their permanent incapacity, the employee has 10 calendar days to inform the employer in writing whether they wish to continue in employment. - Mandatory three‑month adjustment window
Employers then have up to three months to assess the possibility of maintaining the employment relationship by:- Implementing reasonable adjustments to the current position;
- offering a suitable alternative role; or
- Terminating the role: if adjustments are not viable due to excessive burden on the employer or there being no available vacancy; or if the employee rejects the adjustments proposed or the alternative job position.
- Employee 10‑day response period
The employer’s capacity to pay or make modifications is evaluated based on company size, financial resources, turnover, and access to public aid. For companies with less than 25 employees, the burden will be considered excessive when the cost of the adjustment(s) exceeds the greater of either six months’ salary of the employee or the compensation of a successful unfair dismissal claim.
Deliberation period
While adjustments are being considered (and implemented, if applicable), the employment agreement is suspended, and the job position is reserved.
What should employers do now?
This change removes the previous ‘automatic exit’ mechanism for permanent incapacity. Employers should review and align internal policies/processes governing permanent incapacity cases to ensure compliance. For further information on these recent changes or if you require support, please get in touch with a member of the MDR ONE team.
