Dismissed, or a problem at work? Read this first.
As a rule you have two months to challenge a dismissal in court. After that the right lapses, even if the dismissal was unfair.
- Signed nothing yet? Do not sign anything before it has been checked.
- Signed a settlement agreement (vaststellingsovereenkomst)? You normally have fourteen days to reconsider.
- Send us your contract and your employer’s letter and we will tell you where you stand.
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Do not sign straight away. A settlement agreement is negotiable and, once you have signed, you have a two-week reflection period (Article 7:670b(2) of the Dutch Civil Code). Have the agreement checked first for WW-safe wording, the amount of the payment and the end date before you agree.
The first step is not negotiating but reading. What is missing from the text — or what appears in it that should not — you will hear within a day once you have your settlement agreement reviewed.
What is a settlement agreement?
A settlement agreement (in Dutch: vaststellingsovereenkomst, or VSO) is a written agreement in which employer and employee jointly make arrangements to end the employment in a proper and clear manner. This document contains all the important terms surrounding the dismissal, such as the official end date of the employment, the amount of the severance payment, any release from work and other relevant arrangements such as a non-competition clause or a duty of confidentiality. The purpose of a settlement agreement is to arrange the end of the employment without legal proceedings, which is often a faster and less costly solution for both parties.
Receiving a settlement agreement can come as a surprise and can therefore feel overwhelming. It is all the more important not to act in haste, but to be properly informed and to take the right steps to protect your interests.
First steps after receiving it
1. Take your time
After receiving a settlement agreement you have a statutory right to a reflection period of at least 14 days. This means that within this period you have time to go through the agreement calmly and, if necessary, to obtain legal advice. During this reflection period you can refuse the agreement or have it amended without giving reasons. It is important to take this period seriously and not to sign under pressure, even if your employer insists. This reflection period prevents you from taking hasty decisions that could have adverse consequences.
2. Check the most important terms
When reading the settlement agreement carefully, it is crucial to pay particular attention to a number of important points. Below we discuss the most essential terms that often appear in a settlement agreement.
- End date: Check whether the agreed end date of the employment matches the applicable notice period. Too short a notice period can affect your entitlement to unemployment benefit (WW), because the UWV often looks strictly at whether the notice period has been correctly observed.
- Severance payment: The severance payment, also known as the transition payment, must be calculated correctly. Since 1 January 2020 the statutory entitlement to the transition payment has existed from the first working day, but only where the employer terminates the employment or does not continue it (Article 7:673(1) of the Dutch Civil Code). Under a settlement agreement the employment ends by mutual consent and the payment is negotiable; in practice at least the amount of the transition payment is usually agreed: one third of a month’s salary per full year of service. Check whether this amount has been correctly included in the agreement and whether any additional arrangements have been made about a higher payment.
- Reason for dismissal: The reason stated in the settlement agreement is very important for preserving your WW rights. It must be worded in such a way that it is clear the initiative for the dismissal came from the employer and that there is no question of culpable conduct or an urgent cause (such as summary dismissal).
- Non-competition clause: Are you released from any non-competition or non-solicitation clause? This may mean, for example, that you do not have to work during the agreed period but remain bound by the clause. A release can also affect the accrual of your WW rights.
- Final settlement: Have all outstanding payments, such as untaken holiday days, holiday allowance, overtime and other salary components, been correctly included in the final settlement? Correct handling prevents later disputes about outstanding payments.
3. Obtain legal advice
A settlement agreement is a legally binding document with far-reaching consequences for your employment history and your financial situation. It is therefore strongly advisable to have a specialised employment lawyer review the agreement before you sign. An experienced lawyer can assess not only whether the terms are fair and in accordance with the law, but also whether there is room to negotiate on certain points, such as a higher severance payment, a more favourable end date, or additional arrangements on outplacement or training.
At Arslan Advocaten we are ready to help you with expert legal advice on settlement agreements and dismissal cases. We offer a free, no-obligation first consultation in which we discuss your situation and the settlement agreement in detail.
What should you look out for?
Safeguarding your unemployment benefit
One of the most important points when signing a settlement agreement is safeguarding your entitlement to unemployment benefit (WW). The agreement must clearly state that the dismissal takes place on the employer’s initiative and that there is no urgent cause for dismissal. This is essential, because otherwise the UWV may decide to refuse or limit your WW benefit. The notice period must also be correctly observed. Mistakes here can likewise affect your benefit.
Transition payment
The transition payment is intended as financial compensation for the dismissal and as support in finding a new job. Since 1 January 2020 this entitlement has existed from the first working day, regardless of the length of employment — provided the employer terminates the employment or does not continue it (Article 7:673(1) of the Dutch Civil Code). Under a settlement agreement the payment is negotiable. The amount is one third of a month’s salary per year of service. Make sure the correct definition of salary is used (including fixed components such as holiday allowance). In some cases it can be sensible to negotiate a higher payment, for example if you have been employed for a long time or if there are special circumstances.
Negotiation is possible
A settlement agreement is not a fait accompli but a proposal that is open to negotiation. You can negotiate on virtually all the terms, such as:
- The amount of the severance payment.
- The exact end date of the employment.
- Release from work during the notice period, so that you can start the next step in your career without obligations.
- Arrangements on preserving pension rights or additional payments.
- Any arrangements on outplacement support, training or other help in finding a new job.
It is therefore advisable never to agree straight away, but always to obtain legal advice first and to look at the options for improving the agreement.
Why choose Arslan Advocaten?
As a firm specialising in employment law and personal injury, we at Arslan Advocaten know better than anyone how far-reaching a dismissal can be. We understand that every situation is unique and that tailored work is essential. Our office is based in Amsterdam, but we serve clients throughout the Netherlands. We offer clear communication, personal attention and commit ourselves fully to achieving the best result for you.
Our lawyers have extensive experience in reviewing and negotiating settlement agreements and can help you safeguard your rights. Contact us today for a free, no-obligation intake meeting. That way you avoid missing out on money unnecessarily or accepting unfavourable terms.
Read also
- Right to wages during suspension or inactive status: what should you know?
- Work refusal and summary dismissal — your rights as an employee
- Signing a settlement agreement: what do you need to pay attention to?
Frequently Asked Questions
What should I do if I have received a settlement agreement?
Take the time to read the agreement calmly and seek legal advice if necessary. Make sure you use the full reflection period of at least 14 days before you sign.
Why is it important to check the end date in the settlement agreement?
The end date must match the notice period, because too short a period can affect your entitlement to unemployment benefit. Observing this period correctly is therefore essential for your social security.
How do I check whether the severance payment has been calculated correctly?
The transition payment must amount to at least one third of a month’s salary per year of service, from the first working day. Check whether this amount has been correctly included in the agreement and whether additional arrangements have been made.
What does the wording of the reason for dismissal mean for my WW rights?
The reason must clearly indicate that the initiative lay with the employer and that there was no culpable conduct or urgent cause. This matters for preserving your entitlement to unemployment benefit.
Need help? Our employment law lawyer is ready to assist you. Contact us without obligation for free initial advice.