Signing a settlement agreement (VSO) is a big decision. As soon as you sign, your employment contract is terminated and the terms set down in black and white apply. Employers often present the agreement as a standard document, but in reality there are many points to watch out for and that are negotiable.
In this article we explain what to look out for before you sign a VSO, which mistakes are often made, and how to avoid 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 relationship. This is also known as termination by mutual consent.
The agreement includes, among other things:
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The end date of your employment
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The reason for termination
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The amount of the severance pay
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Any agreements regarding clauses (such as a non-compete clause)
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Arrangements regarding vacation days, reference letter and company property
7 important points to check before you sign
1. Severance payment
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Is there a transition payment in it?
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Is the compensation calculated correctly (including holiday allowance and fixed allowances)?
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Can you negotiate for extra months of salary?
👉 Example: An employee received an offer of € 6.000. After legal review, his transition payment actually turned out to be € 8.500. After negotiations, he also received an extra month’s salary.
2. End date and notice period
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Does the end date align with the statutory notice period?
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An incorrect date can put your unemployment benefits at risk.
👉 Example: An employee was given an end date that was one month too early. As a result, the UWV denied his unemployment benefits. Thanks to a correction by a lawyer, the correct notice period was applied and he received benefits after all.
3. Non-compete and non-solicitation clause
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Is there a non-compete clause that hinders you from finding new work?
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Ask to have this removed or limited.
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If it remains, you can claim compensation.
4. Vacation days and vacation pay
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Do you have any vacation days left?
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Agree that these will be paid out or fully taken.
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Also check whether the vacation pay is included in the final settlement.
5. Reference letter and reputation
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Make sure the reason for dismissal is described in a neutral way (e.g., “reorganization” or “by mutual agreement”).
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Ask for a positive reference or testimonial.
6. Exemption from work
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Ask for during the notice period exemption from work with continued pay.
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This way, you have time to apply for jobs while your income continues.
7. Reimbursement of legal fees
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Often the employer reimburses (part of) the costs for a lawyer.
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This is common and prevents you from having to pay yourself.
Checklist: what should you do before you sign?
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📄 Check whether the compensation has been calculated correctly
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📅 Check whether the end date matches the statutory notice period
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📝 Check all clauses (non-compete, non-solicitation, confidentiality)
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🏖️ Check whether vacation days and vacation pay have been accounted for
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🕑 Remember that you always have a 14-day cooling-off period
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⚖️ Have the agreement checked by an employment lawyer
Common mistakes when signing a settlement agreement
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Signing too quickly under pressure from the employer
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Forgetting that a non-compete clause applies
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Incorrect end date accept with loss of unemployment benefits
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No compensation include for legal costs
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No neutrality regarding the reason for dismissal, causing future employers to think negatively
Examples from practice
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Example 1: An employee signed too quickly. Later it turned out that he could no longer claim unemployment benefits because the notice period had been applied incorrectly.
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Example 2: An employee forgot to claim his vacation days. This cost him € 1.200.
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Example 3: An employee only received a neutral reason for dismissal in his VSO after legal assistance, which allowed him to find a new job without any problems.
Frequently Asked Questions (FAQ)
1. Do I have to sign a settlement agreement immediately?
No, always take time to consider and have the agreement reviewed.
2. Will I be entitled to unemployment benefits if I sign?
Yes, provided the VSO is drafted correctly with a neutral reason for dismissal and the correct notice period.
3. What if my employer offers no compensation?
Then you can negotiate. Often more is achievable than just the transition allowance.
4. Can my employer refuse to reimburse legal costs?
It is customary to reimburse this. If not, it can be part of the negotiation.
5. What happens if I don’t sign?
Then your contract remains in effect and the employer must go to the UWV or the subdistrict court to request dismissal.
Why Arslan Advocaten?
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Expertise in settlement agreements and dismissal
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Often obtain a higher compensation and better terms
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Check that your Unemployment benefit rights protected are
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Costs often recovered from the employer
Frequently Asked Questions
What should I consider regarding my severance payment before signing a settlement agreement?
You should verify if there is a transition payment included, ensure the compensation is calculated correctly (including holiday allowance and fixed allowances), and try to negotiate for additional months of salary if possible.
How important is the end date and notice period in a settlement agreement?
The end date should align with the statutory notice period to avoid risking your unemployment benefits; an incorrect date could lead to denial of benefits, so it’s crucial to verify this with legal help.
Can I negotiate restrictions like non-compete clauses in my settlement agreement?
Yes, you can ask to have non-compete or non-solicitation clauses removed or limited, and if they remain, you may be entitled to compensation for the restrictions imposed.
What should I check about my vacation days in the settlement agreement?
Make sure any remaining vacation days are properly paid out or fully taken before signing, and confirm whether vacation pay is included in the final settlement amount.