Settlement agreement and unemployment benefit: avoid problems

A settlement agreement can affect your entitlement to WW, the Dutch unemployment benefit. Not because a settlement agreement (VSO) is forbidden in itself, but because UWV assesses two things separately: have you become culpably unemployed, and from which day are you entitled to benefit. The content and the end date of your agreement determine both.

WW is the reason a settlement agreement is such a fine-grained document: one badly worded reason or end date and the benefit is refused or granted later. So have the text checked in advance; that is what we do in our review of your settlement agreement.

So work through the checklist below before you sign. After signing you still have a fourteen-day cooling-off period, or three weeks if that right is not mentioned in the agreement (Article 7:670b of the Dutch Civil Code).

Checklist before signing

Point 6 is often forgotten. The agreement can contain all the right sentences and still produce no benefit, for instance because you have not worked enough weeks or are not available to the labour market. Check that separately.

End date and notice period: the calculation

Article 19(3) WW provides that you are not entitled to benefit for as long as the legally applicable notice period has not expired, where the employment contract ended by notice or because written agreement was reached on it. Three things matter here:

• Which period? Where employment ends by mutual consent, the applicable notice period is the one the employer would have to observe under Article 7:672 of the Dutch Civil Code. That is one month for employment of less than five years, two months for five to ten years, three months for ten to fifteen years and four months for fifteen years or more.
• From which day does it count? The date on which the employment is deemed to have been terminated by notice is the date on which the termination was agreed in writing.
• Against which day? Under Article 7:672(1) of the Dutch Civil Code notice is given as at the end of the month, unless another day has been designated in writing or by custom. So check your employment contract or collective agreement.

A calendar example

Assumptions. You have been employed for three years, so the employer’s notice period is one month. Your employment contract designates no different notice day, so the end of the month applies. There is no illness and your contract is for an indefinite period.

What happens if the end date is too early. If 1 April had been agreed as the end date in this example, the notice period would not have been respected. You would then have no entitlement to benefit for as long as that period had not expired: your WW starts later, while your salary has already stopped. You can only bridge that gap if the agreement provides compensation for it.

Always recalculate this with your own years of service and the notice day from your contract. The dates given apply only under the assumptions above.

A fixed-term contract without an interim termination clause

Here a different rule applies, and the usual monthly calculation does not work.

Article 19(4) WW provides that you have no entitlement to benefit until the fixed-term employment contract would have expired, where it was terminated early by mutual consent without an interim right of termination having been agreed in writing in that employment contract.

What that means in practice. If your fixed-term contract still runs until 31 December and contains no interim termination clause, a settlement agreement with an end date of 1 August will not get you WW from August: you have to wait until 1 January. That can create a gap of months.

So check above all whether your employment contract contains an in writing interim termination clause. If not, consider whether it would not be wiser to align the end date with the contract’s original end date, or to negotiate suitable compensation for it.

Illness: a route of its own

If you are ill at the moment a settlement agreement is offered, do not sign without advice. Illness brings different risks from WW: your claim may lie under the Sickness Benefits Act rather than under WW, and it may be held against you that you did too little to prevent unemployment or incapacity for work.

The full explanation of that, with the consequences for pay and reintegration, is in our article on the settlement agreement during illness.

Delaying the start date: entitlement or duration?

A later end date works out differently in two respects, and those two are often lumped together.

• Entitlement to WW does not arise before the notice period has expired or, in the case of a fixed-term contract without an interim termination clause, not before the original end date. So an end date that is too early only shifts the starting moment; it does not extinguish the entitlement.
• The duration of your WW depends on your employment history, not on the end date in the agreement.

A different matter is the claim that you get no WW if you "resign yourself". That is too absolute. The law looks at whether the employment was ended by you or at your request without continuation being subject to such objections that it could not reasonably be required of you. If those objections did exist, and you can substantiate them, then giving notice yourself need not automatically lead to culpable unemployment. That is, however, an exception you should have assessed in advance, and not something to gamble on.

How long will you receive WW, and when must you apply?

Two questions that almost always come up with a settlement agreement and that are separate from the question whether you are entitled to unemployment benefit at all. Together they determine how many months of income you actually bridge, and that is exactly what you need in order to judge whether the compensation on offer is sufficient.

The duration: at least three months, at most 24

Article 42(1) of the Unemployment Insurance Act (Werkloosheidswet, WW) sets the limits: the benefit period is at least three months and at most 24 months. Within those limits your employment history determines the length, and there is a kink in that calculation which many people are unaware of.

Under Article 42(2) WW, where the employment history is sufficient:

• For the first ten calendar years: one month of WW per calendar year of employment history.
• For the years above that: half a month per calendar year falling after 2015, and a full month per calendar year falling before 2016.

Worked example. Suppose you worked from 2006 up to and including 2025, so twenty calendar years of employment history. The first ten years (2006 up to and including 2015) yield ten months. The ten years above that (2016 up to and including 2025) all fall after 2015 and therefore yield half a month each, five months in total. Your benefit period therefore comes to fifteen months, not twenty. Anyone who only knows the rule of thumb “one month per year worked” overestimates it by five months.

The UWV makes the final calculation on the basis of the policy administration. Request your employment history before you sign, so that you know which period you are counting on.

The application: one week, and that week starts on the end date in your agreement

Article 26(1)(b) WW obliges you to submit an application to the UWV within one week of becoming unemployed. With a settlement agreement that is the day after the end date you have agreed. So the end date you negotiate immediately sets your application deadline running.

Applying late has two consequences, and they are independent of each other:

• A sanction. Article 27(3) WW gives the UWV the power to refuse the benefit temporarily or permanently, in whole or in part, where an obligation under Article 26 is not complied with.
• A hard limit on retroactive effect. Article 35 WW provides that the benefit is not paid over periods lying more than 26 weeks before the date of application. The UWV may depart from this in special cases, but do not count on it.

What to do in practice: put the end date from the agreement in your diary with a reminder for the day after, and submit the application even if there is still a discussion about the compensation or a final settlement. Making the application dependent on an unfinished negotiation is one of the ways in which people let this deadline pass.

Have the agreement and the contract assessed together

The end date, the interim termination clause and the notice day are not in the settlement agreement itself but in your employment contract and collective agreement. Without those documents the calculation cannot be made. So send them in together.

If you are considering not signing, first read what the consequences are in our article on refusing a settlement agreement. If you want to compare the UWV route with termination by mutual consent, see dismissal via UWV or a settlement agreement. For the compensation itself, see the transition payment.

Is there a proposal on the table and is the cooling-off period running? Contact us without obligation and send both the settlement agreement and your employment contract with it.

Frequently asked questions

From which day does the notice period count with a settlement agreement?

From the date on which the termination was agreed in writing. Article 19(3) WW provides that this date counts as the day on which the employment is deemed to have been terminated by notice. Where employment ends by mutual consent, the calculation uses the notice period the employer would have to observe under Article 7:672 of the Dutch Civil Code: one month for employment of less than five years, rising to four months for fifteen years or more. Notice is moreover given as at the end of the month, unless another day is designated in your contract or collective agreement.

What if my fixed-term contract has no interim termination clause?

Then a separate rule applies and the usual monthly calculation does not work. Under Article 19(4) WW you have no entitlement to benefit until the fixed-term employment contract would have expired, where it was terminated early by mutual consent without an interim right of termination having been agreed in writing. If your contract still runs until 31 December and you agree an end date of 1 August, WW only starts on 1 January. So always check first whether your contract contains a written interim termination clause.

Do I never get WW if I resign myself?

That claim is too absolute. Article 24(2)(b) WW provides that you have become culpably unemployed if the employment was ended by you or at your request without continuation being subject to such objections that it could not reasonably be required of you. If those objections did exist, and you can substantiate them, then giving notice yourself need not automatically lead to culpable unemployment. It is, however, an exception requiring heavy substantiation, so have it assessed in advance and do not gamble on it.

How much cooling-off time do I have after signing?

Fourteen days from the date on which the agreement was concluded. Within that period you can rescind the agreement without giving reasons, by a written statement to your employer (Article 7:670b(2) of the Dutch Civil Code). If your employer failed to mention this right in the agreement, the period is three weeks. Any clause excluding or limiting this right is void. Note the exception: if you sign again within six months of an earlier rescission or revocation, the cooling-off period does not apply.

When does my WW start after the agreed end date?

In principle on the first day after your employment contract ends, provided the legally applicable notice period has expired by then and you meet the other WW conditions. If the end date was chosen too early, then under Article 19(3) WW you have no entitlement to benefit for as long as that period has not expired: your salary does stop, but WW starts later. With a fixed-term contract without a written interim termination clause the entitlement only starts at the moment the contract would originally have ended.

How long does WW last after a settlement agreement?

At least three months and at most 24 months (Article 42(1) of the Unemployment Insurance Act). Within those limits your employment history determines the length: one month per calendar year for the first ten years, and above that half a month per calendar year falling after 2015 and a full month per calendar year falling before 2016 (Article 42(2)). Twenty years of employment history from 2006 to 2025 therefore gives fifteen months, not twenty.

When do I have to apply for WW after a settlement agreement?

Within one week of becoming unemployed, which with a settlement agreement is the day after the agreed end date (Article 26(1)(b) of the Unemployment Insurance Act). Applying late has two separate consequences: the UWV may refuse the benefit temporarily or permanently, in whole or in part (Article 27(3)), and the benefit is not paid over periods lying more than 26 weeks before the date of application (Article 35). Submit the application even if the compensation is still under discussion.

---

Related Legal Services

• Learn more about Employment Law
• Learn more about Insurance Law
• Learn more about Personal Injury