A settlement agreement (VSO) is a proposal from your employer to terminate the employment relationship by mutual agreement. But what if you’re not satisfied with the offer and decide not to sign? Many employees fear that refusing will have 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.

Do you have to sign a settlement agreement?

No, a VSO is always voluntary. You are never required to sign. You may refuse, negotiate, or use the cooling-off period.

👉 Important: if you don’t sign, your employment contract simply continues. Your employer must then choose another dismissal route, such as through the UWV or the subdistrict court judge.

Reasons to refuse a settlement agreement

• Compensation too low: If only the transition payment is offered and you are entitled to more.

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

• Adverse clauses: Such as a strict non-compete clause that hinders you from finding new work.

• No neutral reason for dismissal: Can damage your reputation and put your unemployment benefits at risk.

• No reimbursement of legal fees: This should be included by default.

Real-world examples

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

• Example 2: An employee did not sign because there was a stringent non-compete clause in the VSO. After a lawyer intervened, the clause was removed and he was able to take new work.

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

What happens if you refuse?

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

1. You remain employed

   • As long as you don’t sign anything, your employment contract continues.

   • You retain your salary and your employment rights.

2. Employer starts a dismissal procedure via UWV or the court

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

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

3. Negotiations will still follow

   • Often the employer will still make a better offer to avoid legal proceedings.

Checklist: when to refuse a settlement agreement?

• 📉 Compensation is lower than you consider minimally acceptable

• ❌ The reason for dismissal is worded negatively or assigns blame

• 🔒 Non-compete or non-solicitation clause hinders your future

• 💶 No compensation for legal costs included

• ⚖️ You prefer to have a judge assess your case

Frequently asked questions (FAQ)

1. What happens if I refuse a settlement agreement?
You then remain employed. The employer must choose another dismissal route.

2. Am I at risk of dismissal without severance?
No, you always retain at least the statutory transition payment if you’re dismissed via the court or UWV.

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

4. Can refusing lead to a worse deal?
Sometimes the employer tries to increase the pressure, but often a better offer actually follows.

5. Can a lawyer help me?
Yes, a lawyer can assess whether refusing is wise and negotiate for a better outcome.

Pros and cons of refusing

Advantages

• You don’t sign an unfavorable deal

• Chance of higher compensation through negotiation or in court

• Your unemployment benefit rights are preserved with the correct procedure

Disadvantages

• Uncertainty: employer may initiate proceedings

• Possibly a longer period of tension and uncertainty

• A judge can sometimes award lower compensation than you could have negotiated

Why Arslan Advocaten?

• Assess whether your settlement agreement is favorable enough

• Advise whether refusing is the best option

• Negotiating for higher compensation or better terms

• Support with procedures via the UWV or the cantonal judge

Conclusion: sign or refuse?

Refusing a settlement agreement is sometimes the best choice, especially if the terms are not good or your unemployment benefits are at risk. Always have your settlement agreement legally reviewed before you decide. With good negotiation or proceedings, you can often achieve more than the first offer.