What is a settlement agreement (vaststellingsovereenkomst)?
A settlement agreement (vaststellingsovereenkomst) (VSO) is a written agreement by which you and your employer agree to terminate the employment relationship by mutual consent. It is a commonly used way to end an employment relationship without requiring a procedure at the UWV or the subdistrict court. It may sound friendly, but it is essential to have the agreement carefully reviewed before you sign.
1. The reason for the dismissal
The VSO must contain a reason for the dismissal that does not endanger your WW rights. The reason must always lie with the employer, for example a reorganisation, business economic circumstances or a difference of insight. Avoid formulations that suggest that the dismissal is your own fault. An incorrect formulation may lead to the UWV rejecting your WW application.
2. The severance payment
Check whether the offered payment is at least equal to the statutory transition payment (transitievergoeding). The transition payment (transitievergoeding) amounts to 1/3 monthly salary per year of service. Often there is room to negotiate a higher payment, for example if the employer has a weak legal position or if you have many years of service.
3. The end date and notice period
The end date of your employment relationship is crucial for your WW entitlements. The fictitious notice period (fictieve opzegtermijn) must be taken into account. This means that the end date must lie far enough in the future to cover the notice period. If the end date is too early, you may have a period without income before your WW benefit commences.
4. The 14-day cooling-off period
After signing a VSO, you are legally entitled to a reflection period (bedenktijd) of 14 days. Within this period, you can terminate the agreement without giving reasons. If the reflection period is not mentioned in the VSO, it is extended to 21 days. Ensure that this provision is correctly stated in the agreement.
5. Final discharge
A VSO almost always contains a provision on final discharge (finale kwijting), which means that after performance of the agreement both parties have no further claims against each other. Check whether you have no outstanding claims that you would thereby waive, such as arrears of salary, untaken vacation days or expense reimbursements.
6. Exemption from work
Request exemption from work during the notice period with retention of pay. This gives you the opportunity to apply for a new job while still receiving your salary. Most employers agree to this because they are terminating your employment in any event.
7. Holiday days and holiday allowance
Ensure that the VSO contains a provision for the payment of accrued but untaken vacation days and the outstanding vacation allowance. These amounts can be significant and are sometimes overlooked in the negotiations.
8. Non-competition clause and relationship clause
If your employment contract contains a non-compete or non-solicitation clause, it is advisable to include in the settlement agreement (VSO) that these clauses will lapse. This gives you full freedom to work for a competitor or to maintain contact with clients of your former employer.
9. Certificate of service and references
Have it included in the VSO (vaststellingsovereenkomst) that your employer will provide you with a positive certificate of service (getuigschrift) and is willing to act as a reference. This can help you find a new job.
10. Legal costs
It is customary for the employer to contribute to the costs of legal advice. Many employers reimburse the costs of an employment law attorney in full or in part. This is an important point to discuss, because legal advice regarding a VSO (vaststellingsovereenkomst) is essential.
Have your settlement agreement (VSO) reviewed by a specialist
At Arslan Advocaten, we review settlement agreements (vaststellingsovereenkomsten) for employees on a daily basis. We ensure that your rights are optimally protected and that you do not run any unemployment benefit risk. Often, we can also negotiate a better compensation for you. Contact us immediately if you have received a VSO. Many employers reimburse our costs.