Many employees with a temporary contract think that they are not entitled to severance pay when their contract ends prematurely. Yet even in that case there may be a right to the transition payment – and sometimes even more, especially if a settlement agreement (VSO) is concluded.

In this article, we explain how the rules work for temporary contracts, what your rights are, and what to watch out for with a VSO.

Are you entitled to a transition payment with a temporary contract?

Yes, employees with a temporary contract are also entitled to the transition payment when their employment contract:

• is not renewed by the employer, or

• ends prematurely via a VSO or dismissal procedure.

The transition payment applies even if your contract lasted only a short time: from 1 day of employmentyou become entitled to (pro rata) compensation.

How much is the transition payment for a temporary contract?

The compensation amounts to:

• 1/3 gross monthly salary per year worked.

• For shorter periods, this is calculated pro rata.

👉 Example: An employee with a salary of € 2.400 and a 6-month contract is entitled to approximately € 400 in transition payment upon early termination.

Settlement agreement for fixed-term contracts

When a fixed-term contract is terminated early, the employer may offer a settlement agreement (VSO). This often happens:

• In cases of underperformance or a strained relationship.

• If termination must occur earlier than the end date.

• When the parties wish to separate “by mutual agreement”.

Key points for a VSO with a temporary contract:

1. Notice period – check that the statutory period is applied correctly.

2. Unemployment benefit rights – the reason for dismissal must be neutral (“by mutual agreement”).

3. Transition compensation – temporary employees are also entitled to this.

4. Additional compensation – if the employer wants to terminate the contract early, you can ask for more than just the transition payment.

Real-world examples

• Example 1: An employee with a 1-year contract was offered a settlement agreement after 8 months. In addition to the transition payment, he received 2 extra monthly salaries to agree.

• Example 2: An on-call worker with a 6-month contract thought she was not entitled to compensation. Through a lawyer, she still received the transition payment.

• Example 3: An employee signed a settlement agreement without a notice period. As a result, he had to wait 1 month longer for his unemployment benefits.

Checklist: settlement agreement for a temporary contract

• 📑 Check whether your transition payment has been calculated correctly.

• 📅 Pay attention to the correct notice period.

• 📝 Make sure the reason for termination is neutral.

• 💶 Negotiate for extra compensation if the employer wants to end earlier.

• ⚖️ Have your VSO checked by an employment lawyer.

Common mistakes

• Thinking that temporary contracts do not entitle you to severance pay.

• Agreeing too quickly without asking for extra compensation.

• Forgetting that on-call workers and short employment periods also count.

• Losing unemployment benefit rights due to the wrong termination reason in the VSO.

Frequently Asked Questions (FAQ)

1. Am I entitled to transition compensation with a temporary contract?
Yes, also in case of non-renewal or early termination.

2. How is the compensation calculated?
1/3 monthly salary per year worked, pro rata for shorter periods.

3. What if my contract simply ends?
Then you are also entitled to transition compensation, unless you resign.

4. Can I get more than the transition compensation?
Yes, especially with a VSO, because the employer often wants to let you go sooner.

5. Must the employer reimburse my attorney’s fees?
Yes, that is customary and should be included in the VSO.

Why Arslan Advocaten?

• Specialized in dismissal and settlement agreements

• Also assist employees with temporary contracts

• Negotiate for extra compensation and secure unemployment benefit rights

• Costs often recovered from the employer

Conclusion

Even with a temporary contract you are entitled to severance pay. With early termination via a VSO you can often negotiate even more. Always have your agreement checked so you don’t miss out on money or rights.