If your Dutch employer wants to fire you, you may be offered a settlement agreement. This document is used to record the conditions of your dismissal in writing. What does it contain and can you negotiate about a better proposal?
🇬🇧 For expats or non-Dutch speakers
This page is written for people that are employed by a Dutch company, but don't speak Dutch themselves. The information could also be useful if you are Dutch, but the working language of your business is English. If you prefer a Dutch version, we refer to the page Vaststellingsovereenkomst.
What is a settlement agreement?
A settlement agreement (vaststellingsovereenkomst) is a written agreement in which the conditions regarding the termination of your employment contract are recorded. In The Netherlands a settlement agreement can be used in the event of dismissal by mutual consent (ontslag met wederzijds goedvinden). The dismissal conditions laid down in a settlement agreement should meet both your wishes and those of your employer. Once you and your employer have signed the settlement agreement, your employment contract can legally be terminated.
Synonyms for settlement agreement
It might be a bit confusing when you are looking at a dismissal proposal that has a slightly different name. The terms severance package, final settlement, mutual agreement, termination proposal (beëindigingsvoorstel), termination agreement (beëindigingsovereenkomst) or termination employment contract are also being used. Legally speaking, they all indicate a settlement agreement and contain the same clauses.
When use a settlement agreement?
It might take some time to get used to a new job, a different language and your new employer. But a lot of expats or people who work for a Dutch employer feel completely at home at some point. In some occasions though, there is just no fit. This might be due to your tasks, business circumstances (bedrijfseconomische omstandigheden), the working ethos or the relationship with your new boss. Conflict of characters or a serious event in the workplace might stir up friction. But what can your employer do when he or she intends to fire you without a clear indication or reason to do so?
No apparent reason for dismissal
If there is no valid reason for dismissal (gegronde ontslagreden) or your personnel file is inconclusive, an employer often tries to avoid a dismissal process through the Employment Insurance Agency (ontslag via het UWV) or the subdistrict court (ontslag via de kantonrechter). These dismissal procedures require a clear dismissal reason, a better preparation, they take longer, are more expensive and the outcome is uncertain. If you are still 'on speaking terms', dismissal by mutual consent (ontslag met wederzijds goedvinden) is the obvious way forward. And that requires the use of a settlement agreement.
Conditions in a settlement agreement
A settlement agreement contains the conditions you agree upon with your employer regarding your dismissal. According to the Dutch government, a legally binding settlement agreement must record the following information in any case.
Mandatory conditions settlement
Your employer can add additional conditions to the (draft) settlement agreement. But so can you! It is common practise to negotiate about them. Dutch labor law doesn't oblige you to sign any proposal you don't agree with, so we suggest you make good use of it. Voluntary conditions we often see are summed up below. You can click on the term to read more about it.
Voluntary conditions settlement
We don't advise you to draft a settlement agreement yourself. It is smarter to let your employer come up with a first proposal. If you are curious to see what a settlement agreement for a Dutch company looks like, you can download an example in English below.
Download settlement agreement example
Do you want to know what a settlement agreement looks like that complies with Dutch labor law? You can download a free example here in English.
Improve your settlement agreement
It might not instantly appear so, but it is very common to negotiate about the contents of your settlement agreement. If your employer lacks a valid dismissal reason or has a weak personnel file, your legal position is strong.
In this video mr. Jos de Ridder (labor lawyer and owner of Juridisch Platform) talks about the questions employees usually have when they are presented with a settlement agreement. It is in Dutch, but you can turn on English subtitles.
Check your settlement agreement
To ensure that your settlement agreement is drawn up fairly, that you will receive a realistic severance payment and you are entitled to (subsequent) unemployment benefits, it is wise to seek advice from an independent labor lawyer. We can tell you exactly what to look out for and ensure you that you will part under the most favorable conditions possible.
Settlement agreement questions
Most employees that receive a (draft) settlement agreement, are inundated with questions. We have included the frequently asked questions below and provided them with answers.
Free legal advice about dismissal
Fill our the form below, so one of our labor lawyers can call you about your (intended) dismissal. We will discuss one-sided clauses, missing parts and room for negotiation. That is free of charge!
Bel 020-4689114 (gratis)
Laat je gratis terugbellen
Wij bellen je kosteloos op een dag en tijd waarop het jou schikt.