A settlement agreement (vaststellingsovereenkomst) is a negotiated exit. Understanding its terms is essential to protect your rights.
A settlement agreement (vaststellingsovereenkomst) is a Dutch legal document that formalizes the termination of employment by mutual consent. It's different from dismissal - both parties agree to end the contract under negotiated terms.
If you're coming from another country, note that Dutch settlement agreements have specific requirements that differ from UK settlement agreements or US severance packages. The terms directly affect your unemployment benefits (WW-uitkering) and other rights.
It is important to always keep communicating with your employer during an employment conflict. This not only increases the chance of a good solution, but also strengthens your legal position.
Often the help of a mediator is engaged. Maintaining the employment relationship is initially the starting point.
However, if the employment conflict makes it no longer possible to work together in the future, the employment contract can be terminated by mutual consent. A settlement agreement is then drawn up.
A settlement agreement can be a good solution when continuing the employment is no longer viable - but only if the terms properly protect your interests.
When you and your employer agree to part ways, all terms are documented in the settlement agreement. This provides legal certainty for both parties about how the employment ends and what each side is entitled to.
The exact end date of your employment and the notice period (opzegtermijn). This is crucial for your unemployment benefits - see below.
Whether any non-compete clause will be waived, leaving you free to work elsewhere. It is often possible to have the non-compete clause waived or limited.
The final financial settlement including severance pay (transitievergoeding), accrued vacation days, and any bonuses owed.
As an employee, don't hesitate to protect your interests. You want to limit the financial consequences of your dismissal as much as possible.
Signing a settlement agreement means agreeing to end your employment. In the Netherlands, you may still qualify for unemployment benefits (WW-uitkering) - but only if the agreement meets specific requirements set by the UWV (Dutch Employee Insurance Agency).
The UWV assesses whether you qualify for benefits based on the terms of your settlement agreement and the circumstances of your departure. A poorly drafted agreement can result in denial or delay of benefits.
Having your settlement agreement reviewed by a professional is essential to protect your benefit entitlements.
Note: The UWV assesses each case individually. These are simplified guidelines.
One of the requirements for unemployment benefits is that you're not sick when signing. But what about situational incapacity (situatieve arbeidsongeschiktheid)? This is when you cannot work due to the workplace situation, not a medical condition.
With situational incapacity, a settlement agreement may still be possible, but requires careful handling. The UWV will assess whether you are genuinely available for work elsewhere.
This indicates that you are unable to work under the current circumstances, but could do so elsewhere under different conditions.
The transition payment (transitievergoeding) is statutory severance pay in the Netherlands. When leaving via a settlement agreement, employers typically include this payment. The statutory minimum is calculated based on your salary and years of service - but you may be able to negotiate more. Note: you may not be entitled to this payment if you committed serious misconduct (ernstig verwijtbaar handelen).
The amount of the transition payment is often negotiable. Make use of this opportunity.
No entitlement when resigning yourself, in case of summary dismissal for serious misconduct (ontslag op staande voet), or company bankruptcy.
At LegalBacking, we stand 100% on the side of the employee. We guide you through employment conflicts and can review your settlement agreement before you sign.
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