Signing a settlement agreement (VSO) is a big decision. Once you sign, your employment contract is terminated and the written agreements apply. Employers often present the agreement as a standard document, but in reality, there are many points to consider and negotiate.
In this article, we explain what you need to be aware of before signing a VSO, common mistakes often made, and how to prevent missing out on your rights or money.
What is a settlement agreement?
A settlement agreement is a written agreement between employer and employee to terminate the employment contract. This is also called dismissal by mutual consent.
The agreement includes, among other things:
-
The end date of your employment
-
The reason for termination
-
The amount of the severance payment
-
Potential agreements regarding covenants (such as a non-competition clause)
-
Regulations concerning vacation days, letters of recommendation, and company property
7 important points to check before you sign
1. Severance payment
-
Is there a transitional payment included?
-
Is the payment correctly calculated (including holiday pay and fixed surcharges)?
-
Can you negotiate for extra months of salary?
👉 Example: An employee was offered €6,000. After legal review, his transitional payment turned out to be €8,500. After negotiations, he also received an extra month’s salary.
2. End date and notice period
-
Does the end date match the legal notice period?
-
A wrong date can endanger your unemployment benefits.
👉 Example: An employee was given an end date that was one month too early. The UWV therefore refused his unemployment benefits. Thanks to correction by a lawyer, the correct notice period was applied, and he was granted benefits.
3. Non-competition and relationship clause
-
Is there a non-competition clause that impedes you in a new job?
-
Ask to have this removed or restricted.
-
If it remains, you can demand compensation.
4. Vacation days and holiday pay
-
Do you have remaining vacation days?
-
Agree that they either get paid out or fully used.
-
Also check if holiday pay was incorporated in the final settlement.
5. Certificate and reputation
-
Ensure the reason for dismissal is described as neutral (for example, “reorganization” or “in mutual agreement”).
-
Request a positive letter of recommendation or reference.
6. Exemption from work
-
Request to get exemption from work while keeping your salary during the notice period.
-
This way, you have time to apply for jobs while your income continues.
7. Legal cost reimbursement
-
Often, the employer covers (part of) the costs for a lawyer.
-
This is common practice and prevents you from paying out-of-pocket.
Checklist: What do you need to do before signing?
-
📄 Check if the reimbursement is correctly calculated
-
📅 Verify if the end date is in accordance with the legal notice period
-
📝 Review all covenants (competition, relationship, confidentiality)
-
🏖️ Make sure vacation days and holiday pay are included
-
🕑 Remember that you always have 14 days reflection time
-
⚖️ Get the agreement reviewed by a labor law lawyer
Common mistakes when signing a VSO
-
Signing too quickly under pressure from the employer
-
Forgetting that a non-competition clause applies
-
Accepting incorrect end date resulting in loss of unemployment benefits
-
Not including a fee for legal costs
-
Not ensuring neutrality in the reason for dismissal, which could lead future employers to have negative thoughts
Real life examples
-
Example 1: An employee signed too quickly. Later, it turned out that he could no longer claim unemployment benefits because the notice period was incorrectly applied.
-
Example 2: An employee forgot to claim his vacation days, cost him €1,200 less.
-
Example 3: An employee, only after getting legal assistance, got a neutral reason for dismissal in his VSO, enabling him to find a new job without issues.
Frequently Asked Questions (FAQ)
1. Do I have to sign a settlement agreement immediately?
No, always take time to reflect and have the agreement checked.
2. Do I get entitled to unemployment benefits if I sign?
Yes, provided the VSO is correctly drafted with a neutral reason for dismissal and correct notice period.
3. What if my employer doesn’t offer a payment?
Then you can negotiate. Often, more can be achieved than just the transitional payment.
4. Can my employer refuse to cover legal costs?
It is common to cover this. If not, this can be part of the negotiation.
5. What happens if I don’t sign?
Then your contract remains and the employer will have to ask the UWV or cantonal judge for dismissal.
Why Arslan Lawyers?
-
Expertise in settlement agreement and dismissal
-
Often obtain a higher reimbursement and better conditions
-
Check that your unemployment rights are secure
-
Costs often recovered from employer
