A settlement agreement (VSO) is a proposal from your employer to end the employment contract in mutual agreement. But what if you are not satisfied with the offer and decide not to sign? Many employees are afraid that refusal has negative consequences. In reality, you often have more options than you think.

In this article, we discuss when it may be wise to refuse a VSO, what the risks are and what alternatives exist.

Should you sign a settlement agreement?

No, a VSO is always voluntary. You are never obliged to sign. You can refuse, negotiate or use consideration time.

👉 Important: if you do not sign, your employment contract remains in place. Your employer must then choose a different dismissal route, such as through the UWV or the subdistrict court.

Reasons to refuse a VSO

• Too low compensation: If only the transition compensation is offered and you are entitled to more.

• Unemployment insurance risk: If the reason for dismissal is incorrectly formulated or the notice period is missing.

• Disadvantageous clauses: Such as a strict non-compete clause that hinders you in new work.

• No neutral reason for dismissal: Can damage your reputation and endanger your unemployment benefits.

• No compensation for legal costs: This should be included by standard.

Practical examples

• Example 1: An employee received an offer with only the transition compensation. He refused. The employer then offered an additional compensation of three months’ salaries to reach an agreement after all.

• Example 2: An employee did not sign because a heavy non-compete clause was in the VSO. After the intervention of a lawyer, the clause was removed and he was able to accept new work.

• Example 3: An employee in a reorganization received a standard VSO. By refusing and bringing the case to the subdistrict court, he received a fair compensation on top of the transition compensation.

What happens if you refuse?

When you refuse a VSO, these are the possible scenarios:

1. You remain employed

   • As long as you do not sign anything, your employment contract continues.

   • You retain your salary and employment rights.

2. Employer starts dismissal procedure via UWV or court

   • In case of economic dismissal or after 2 years of illness → UWV.

   • In case of underperformance or a disrupted employment relationship → subdistrict court.

3. Negotiation follows nevertheless

   • The employer often makes a better offer to avoid a procedure.

Checklist: when to refuse VSO?

• 📉 Compensation is lower than the minimum you find acceptable

• ❌ Dismissal reason is negative or culpably formulated

• 🔒 Non-compete or relation clause hinders your future

• 💶 No compensation for legal costs included

• ⚖️ You prefer a judge to judge your case

Frequently Asked Questions (FAQ)

1. What happens if I refuse a VSO?
Then you remain employed. The employer has to choose another dismissal route.

2. Do I run the risk of dismissal without compensation?
No, you always retain at least the transition compensation for dismissal via the court or UWV.

3. Will I receive unemployment benefits if I refuse?
If your employer terminates your contract via the UWV or subdistrict court, you retain your right to unemployment benefits.

4. Can refusal lead to a worse deal?
Sometimes the employer tries to exert pressure, but often a better offer comes along.

5. Can a lawyer help me?
Yes, a lawyer can assess whether refusal is smart and negotiate for a better result.

Pros and cons of refusal

Advantages

• You don’t sign an unfavorable deal

• Chance for higher compensation through negotiation or court

• Your unemployment insurance rights are maintained with the correct procedure

Cons

• Uncertainty: employer can start procedure

• Possibility of prolonged stress and uncertainty

• Court can sometimes award lower compensation than you could have negotiated

Why Arslan Lawyers?

• Assess whether your VSO is favorable enough

• Advise whether refusal is the best option

• Negotiate for higher compensation or better conditions

• Guide through procedures via UWV or subdistrict court

Conclusion: sign or refuse?

Refusing a settlement agreement is sometimes the best choice, especially if the conditions are not good or your unemployment benefits are in danger. Always have your VSO legally tested before you decide. With good negotiation or a procedure, you can often achieve more than the initial offer.