When an employer and employee decide to terminate the employment, this can be done through dismissal with mutual consent. This almost always happens with a settlement agreement (VSO). The advantage is that both parties make arrangements in good consultation, without a judge or the UWV having to intervene.
But how does dismissal by mutual consent work exactly, what are the advantages and pitfalls, and what should you pay attention to before you sign?
What is dismissal by mutual consent?
Dismissal by mutual consent means that employer and employee agree together to terminate the employment agreement. This is recorded in writing in a settlement agreement.
It is voluntary: neither of the parties is obliged to agree.
How does it work in practice?
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Employer’s proposal
The employer prepares a settlement agreement containing the conditions for termination. -
Negotiation
As an employee, you can discuss and adjust the conditions, such as the compensation or end date. -
Signing
Both parties sign the agreement. -
Cooling-off period
The employee always has 14 days to reconsider in order to rescind the agreement.
Advantages of dismissal with mutual consent
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✅ Quick solution without a procedure at UWV or court.
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✅ More room for negotiation (for example higher compensation or exemption from work).
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✅ Preservation of unemployment benefits rights, provided the VSO is correctly established.
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✅ Less stress than a long legal procedure.
Risks and pitfalls
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❌ Accepting too low a severance pay.
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❌ Incorrect termination date causing you to lose your unemployment benefits.
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❌ Including a negative reason for dismissal (“poor performance”) → threat to your unemployment benefits.
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❌ Forgetting to delete or limit a non-competition clause or relationship clause.
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❌ Not including a compensation for legal costs.
Examples from practice
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Example 1: An employee received a VSO with only the transition compensation. After negotiations through a lawyer, he received two extra monthly salaries and exemption from work.
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Example 2: An employee signed too quickly. The UWV denied his unemployment benefits because the notice period was not correct.
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Example 3: During a reorganization, a group of employees received a standard VSO. One employee enlisted legal help and received a higher compensation than his colleagues.
Checklist: dismissal by mutual consent
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📄 Check the reason for dismissal (should be neutral).
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📊 Calculate your transition payment and see if you can ask for more.
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📅 Check the end date and notice period.
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🔒 Look at the clauses (competition, relationship, confidentiality).
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⚖️ Always have your VSO checked by a lawyer.
Frequently asked questions (FAQ)
1. Do I keep my right to unemployment benefits in case of dismissal by mutual consent?
Yes, provided the VSO is correctly established and the reason for dismissal is neutral.
2. Can I negotiate about the conditions?
Yes, almost all items are negotiable, from the compensation to the clauses.
3. Am I obliged to sign the agreement?
No, it is always voluntary.
4. What happens if I refuse?
Then your employment continues and the employer must choose another dismissal route.
5. Does my employer pay the attorney costs?
This is common. It is often explicitly included in the VSO.
Why Arslan Lawyers?
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We guide employees through dismissal by mutual consent
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We negotiate for higher compensations and better conditions
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We ensure that your unemployment benefits rights are secured
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Costs often recouped from the employer
Conclusion
Dismissal by mutual consent can be a good solution if you proceed with caution. With the right negotiations and a well-drafted settlement agreement, you can confidently take the next step in your career.
Important Legal Considerations in Mutual Consent Dismissal
While dismissal by mutual consent offers flexibility, it is crucial to understand the legal framework governing these agreements in the Netherlands. The settlement agreement must comply with Dutch labor laws and should not contain terms that are unfair or illegal. For instance, the agreement cannot waive the employee’s statutory rights or the right to claim unemployment benefits.
In practice, the agreement often includes a severance payment, known as a transition payment (transitievergoeding), especially if the employee has worked for the employer for at least 24 months. This payment is intended to support the employee during the transition to new employment. Employers are usually willing to negotiate this amount, sometimes offering a higher sum to reach an amicable settlement.
Examples of Common Clauses in a Settlement Agreement
- Mutual release of claims, ensuring neither party sues the other after termination.
- Confidentiality clauses regarding the terms of the agreement.
- Reference letter or statement of good conduct from the employer.
- Agreed end date of the employment.
- Provisions on unused vacation days or bonuses.
Practical Advice Before Signing
- Seek legal advice: Always consult a lawyer who specializes in Dutch employment law to review the settlement agreement before signing.
- Understand the consequences: Signing the agreement means giving up the right to challenge the dismissal or claim additional compensation later.
- Use the cooling-off period: Remember you have 14 days after signing to revoke the agreement without any penalty.
- Check for unemployment benefit eligibility: Ensure that the terms of dismissal do not affect your right to apply for benefits via the UWV.
Conclusion
Dismissal by mutual consent can be a smooth and efficient way to end an employment relationship in the Netherlands, but it requires careful consideration and negotiation. Both employers and employees benefit from clear agreements that protect their rights and interests. At Arslan & Arslan Advocaten, our experienced employment law specialists are ready to guide you through every step of the process, ensuring your settlement agreement is fair, legally sound, and tailored to your situation.
Contact Arslan & Arslan Advocaten today for expert advice and support on dismissal by mutual consent.
Frequently Asked Questions
What is dismissal by mutual consent and how does it work?
Dismissal by mutual consent is when both employer and employee agree in writing to end the employment contract, usually through a settlement agreement. The process involves negotiation, signing the agreement, and a cooling-off period of 14 days for reconsideration.
What are the main advantages of opting for dismissal by mutual consent?
The main advantages include a quick resolution without court or UWV intervention, more room for negotiation on terms like compensation, preservation of unemployment benefits if done correctly, and less stress compared to lengthy legal procedures.
What potential risks should I be aware of before signing a settlement agreement?
Risks include accepting too low a severance pay, incorrect termination dates affecting unemployment benefits, including negative dismissal reasons, forgetting to address non-competition clauses, and not securing compensation for legal costs.
Why is it important to have a lawyer review my settlement agreement?
Having a lawyer check your settlement agreement ensures that the terms are fair, your rights are protected, and that clauses like non-competition or confidentiality are properly limited or removed to avoid future issues.