Has your employer offered you a settlement agreement (VSO), but do you doubt whether the proposal is fair? Then it is important to know that a settlement agreement is almost always negotiable.
Many employees think the first proposal is fixed. In practice, we often see that there is room for improvement — sometimes significantly. In this article we explain in detail how negotiating a settlement agreement works, what you can demand, and where the limits lie.
This article belongs to our pillar: dismissal with settlement agreement.
Is a settlement agreement always negotiable?
Yes, in most cases it is. An employer chooses a settlement agreement because they want to avoid a dismissal procedure. This means the employer has an interest in your consent.
That is precisely what makes negotiation possible. The stronger your legal position, the greater the room for negotiation.
What can you negotiate in a settlement agreement?
When negotiating a settlement agreement, you can think of the following elements:
- the amount of the termination payment;
- the end date of employment;
- continued payment of wages;
- reimbursement of legal costs;
- exemption from work;
- non-compete or non-solicitation clauses;
- bonus, commission, or overtime;
- wording of the reason for dismissal (unemployment benefits).
Not everything is always achievable, but there is almost always something to gain.
What compensation can you demand?
There is no fixed rule for the amount of a settlement agreement compensation. In practice, the following factors are often considered:
- the statutory transition payment;
- the number of years of service;
- the employer's chances in proceedings;
- your age and position in the labour market.
With a weak ground for dismissal, compensation of several months' salary may be realistic.
Practical example: higher compensation
An employee with ten years of service is offered one month's salary. After negotiations, this is increased to six months' salary, partly because the employer had built up little documentation.
Lesson: your legal position determines the outcome.
Negotiating a settlement agreement and unemployment benefit security
A crucial part of negotiation is securing your right to unemployment benefits.
For this, it must be clear, among other things, that:
- the initiative for dismissal lies with the employer;
- you are not at fault;
- the correct notice period is respected.
Read more about this in: dismissal with settlement agreement.
Negotiating legal costs
In many settlement agreements, it is agreed that the employer reimburses (part of) the costs of legal assistance.
This is often defensible, as the employer also has an interest in a correct settlement.
What if the employer refuses to negotiate?
If the employer refuses to negotiate, this may mean that:
- the proposal is already relatively favourable;
- the employer is prepared to start proceedings;
- the employer underestimates your position.
Even then, it is wise to map out your legal position before making a decision.
Step-by-step plan: negotiating a settlement agreement
- Never sign immediately.
- Have the settlement agreement legally assessed.
- Determine your negotiating room.
- Formulate concrete counterproposals.
- Record agreements in writing.
Frequently asked questions about negotiating a settlement agreement
Can I always negotiate?
Yes, although the room for negotiation varies per situation.
What is a reasonable compensation?
That depends on your years of service and the ground for dismissal.
Can negotiating harm my unemployment benefits?
No, provided the wording is correct.
Should I negotiate through a lawyer?
That is not mandatory, but strongly recommended.
What if I demand too much?
The employer may withdraw the proposal, but this happens less often than expected.
Negotiating a settlement agreement? Let professionals handle it
Negotiating a settlement agreement requires a tailored approach. A small adjustment can make a difference of tens of thousands of euros.