Are you, in a reorganization a settlement agreement (VSO) offered? Then there is often more room for negotiation than you think. In this guide we explain when a VSO is used, which rules apply to dismissal due to reorganization, and which points you should always check and – where possible – improve.
Important: never sign immediately. Have your settlement agreement legally reviewed. A single sentence about the notice period or reason for dismissal can cost you your right to unemployment benefits or thousands of euros.
What is a reorganization?
A reorganization is a major change in the organization, for example due to:
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Financial problems or cost savings
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Merger or acquisition
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Technological changes/automation
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Strategic restructuring or outsourcing
Consequence: positions change or be eliminated and there may be dismissal follow.
When may an employer give dismissal due to reorganization?
The employer must business-economic necessity demonstrate (financial statements, forecasts, reorganization plan) and:
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Redeployment investigate (if necessary with re- or further training).
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The reflection principle apply correctly (objective selection, no arbitrariness).
Only if all of this is correct, dismissal comes into view (via UWV or VSO).
Reassignment obligation: first look for other work
Before dismissal, the employer must seriously assess whether you within a reasonable period to a suitable position can transfer. That could also be a nearby vacancy or a position with training be. If that doesn’t work? Then only dismissal.
Collective dismissal (WMCO), OR and trade unions
If there are ≥ 20 layoffs within 3 months in the same UWV work area the WMCO applies. The employer must then trade unions and – if present – the works council (OR) inform and consult. Often there is a social plan with agreements on compensation, support and priority rules.
Reflection principle: how is it determined who has to go?
Selection is conducted per interchangeable job group and per age category (15–25, 25–35, 35–45, 45–55, 55+). Within each category in principle the person with the shortest length of service first. Exceptions:
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Closure of entire company/branch
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Unique position that is completely eliminated
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Entire job group eliminated
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Deviating collective labor agreement provisions or hardship clause (indispensable expertise)
Two routes for dismissal in a reorganization
1) Dismissal via UWV
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UWV assesses: business economic necessity, redeployment, reflection principle.
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After permit: termination with statutory notice period (procedure time may be deducted, at least 1 month remaining).
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You are at least entitled to transition compensation.
2) Termination by mutual consent via settlement agreement
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Employer and employee make agreements in a settlement agreement.
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Negotiating about more than just severance pay is possible (garden leave, outplacement, training budget, additional compensation, end date, reference, legal costs).
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Pay attention to unemployment benefit eligibility (correct wording, notice period, end date).
Useful to factor into your considerations:
Disagree with a UWV dismissal? Here’s what you can do
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Check the reflection principle and justification by the employer.
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Present a defense in the UWV procedure.
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Does the UWV still approve? Then you can, within the deadlines, go to the cantonal judge (annulment, reinstatement of the employment contract or fair compensation – art. 7:682 BW).
More procedural background:
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Summary proceedings: what is it, when, and how does the procedure work?
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Appeal after a judgment: when, how, and what are your chances?
Settlement agreement in a reorganization: the main negotiation points
1) Severance pay
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Minimum: transition payment (art. 7:673 BW).
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Negotiate about a higher amount (goal: compensation for notice period, search period for a new job, special circumstances).
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Sometimes the employer invokes financial distress; have that justification assessed.
2) End date & notice period
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Must be correct regarding unemployment benefit entitlement (fictitious notice period).
3) Exemption from work with pay
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Immediately or from a fixed date, including retention of bonus/holiday allowance.
4) Neutral reason for termination
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Formulate business-economic reasons; avoid culpable wording → Unemployment-benefit safe.
5) Extras that are often possible
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Training budget or outplacement
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Positive reference / neutral employment certificate text
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Keep laptop/phone or agreements about non-compete/non-solicitation clause
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Legal fee reimbursement (customary)
6) Re-employment condition
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Will your (old) position within 26 weeks return? Then the employer must first contact you.
More about cost estimates and procedural choices:
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How much does litigation cost? Explanation of court fees and litigation costs
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Going to court without a lawyer: is that allowed and is it wise?
Examples from practice
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Additional compensation + leave: standard social plan was increased and the employee received job application leave with continued pay.
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Training budget: in addition to compensation also additional training negotiated → better job prospects.
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VSO-check pays off: colleagues signed immediately; one employee had the VSO checked and received better terms.
Checklist: Settlement agreement during reorganization
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📄 Reason for dismissal neutral (business-economic) and safe for unemployment benefits
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💶 Transition compensation calculated and room for extras utilized
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📅 Notice period correctly applied (fictitious notice period)
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📝 Release from work with pay (including bonus/VT)
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🎓 Training/outplacement agreed
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💻 Other points: non-compete/non-solicitation clause, company property, reference
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⚖️ Legal fees reimbursed by employer
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✅ Have the settlement agreement reviewed before signing
Common mistakes (avoid them)
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Thinking that a social plan binding is → often remains individual negotiation possible.
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Signing too quickly without unemployment-benefit check or correct notice period.
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No extras ask (training/outplacement).
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Transition allowance not recalculate and no legal check.
Frequently Asked Questions (FAQ)
1) Do I have to sign a VSO during a reorganization?
No. You can negotiate, or have your case reviewed in a UWV procedure. A VSO is voluntary – only sign when the terms are good.
2) Am I entitled to unemployment benefits with a settlement agreement?
Yes, provided the settlement agreement unemployment-safe is (neutral reason, correct dates/notice period, no fault). Have this always checked.
3) Will I get more than the transition allowance?
Often yes, especially in collective processes or if the employer wants quick clarity. Think of extra compensation, release from work, training/outplacement and attorney’s fees.
4) What is a social plan?
A set of agreements in case of (collective) dismissal about, among other things, compensation and support. Not always legally required, but customary in larger reorganizations.
5) Will my employer pay my lawyer’s fees?
Often yes – if part of the VSO,. It is customary to include a reasonable fee to include for legal review.
Why Arslan Attorneys?
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Specialized in layoffs and reorganizations
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Unemployment benefit-safe and maximum settlement agreement terms
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Negotiating for higher compensation and appropriate extras
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Speed & certainty: we put the right order in place, so you don’t miss anything
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