Increasingly, dismissals are arranged through a settlement agreement (vaststellingsovereenkomst, or VSO). This is a written agreement in which employer and employee jointly agree on the terms for ending the employment contract. A VSO can be attractive, but it is important that you fully understand your rights before signing.
In this article, we discuss how a VSO works, what the advantages and disadvantages are, and how you can get the most out of such an arrangement.
What is a settlement agreement?
A VSO is an agreement in which employer and employee agree that the employment relationship will end. The dismissal therefore takes place by mutual consent, without involvement of the UWV (Employee Insurance Agency) or a court.
The provisions in the VSO typically cover:
The end date of the employment.
The amount of the severance payment (transition payment or more).
Exemption from work during the notice period.
A positive reference or letter of recommendation.
Communication towards colleagues and third parties.
Why do employers choose a VSO?
It is faster than a UWV or court procedure.
There is less uncertainty about the outcome.
Parties can negotiate customised arrangements.
Advantages for employees
Room for negotiation for a higher severance payment.
You retain (if properly documented) the right to unemployment benefits (WW).
You can negotiate extras, such as outplacement or a training budget.
You have influence over the manner in which you leave.
What should you look out for in a VSO?
Reason for dismissal
The reason must be neutral (for example, "reorganisation" or "difference of opinion"), so that your right to unemployment benefits is not jeopardised.Severance payment
You are entitled to at least the statutory transition payment, but you can often negotiate more.Notice period
The end date must align with the statutory or collective labour agreement notice period; otherwise, you risk a gap in your unemployment benefits.Exemption from work
Ensure that it is recorded that you are exempted from work with continued salary, so that you can look for a new position.Other provisions
Consider having a non-compete clause removed, retaining a company car or laptop, and reimbursement of legal costs.
Practical examples
Example 1: An employee received a standard VSO with only the transition payment. After negotiations, he received an additional three months' salary.
Example 2: An employee signed without legal advice and lost his unemployment benefits because the reason for dismissal had been formulated incorrectly.
Example 3: An employee negotiated the removal of her non-compete clause, enabling her to start with a new employer immediately.
Checklist for a VSO
Is the reason for dismissal formulated neutrally?
Is the severance calculation correct?
Does the end date align with the notice period?
Have arrangements been made regarding exemption from work and a reference letter?
Has the non-compete clause been removed or limited?
Always have the VSO reviewed by an employment law attorney.
Common mistakes
Signing without legal advice.
Agreeing too quickly to an insufficient severance payment.
Not paying attention to the consequences for unemployment benefits.
Failing to make arrangements regarding ancillary matters such as a reference letter or non-compete clause.
Frequently asked questions (FAQ)
1. Am I entitled to unemployment benefits after a VSO?
Yes, provided the agreement is properly drafted (neutral reason and correct notice period).
2. Do I always receive a severance payment with a VSO?
At minimum the statutory transition payment, but often more through negotiation.
3. Can I refuse a VSO?
Yes, you are never obliged to sign.
4. Does the employer pay my legal costs?
Yes, a contribution towards the cost of a legal review is often included (e.g. EUR 750).
5. How much time do I have to sign a VSO?
You have a statutory reflection period of 14 days.
Why Arslan Advocaten?
Specialised in settlement agreements and dismissal
We verify that your rights and unemployment benefits are safeguarded
We negotiate for higher severance payments and better terms
Fast and clear support during negotiations
Conclusion
A settlement agreement can be a good solution, but only if the terms are in your favour. Therefore, always have the agreement reviewed by a legal professional and negotiate for better terms where possible.