Final discharge and settlement agreement

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Final discharge Dutch settlement agreement

Our Dutch lawyer employment law and dismissal law in Amsterdam provides legal advice on settlement agreement by mutual consent and final discharge. What does final discharge mean in a settlement agreement? Any determination agreement or termination agreement in The Netherlands by which an employee is dismissed by mutual consent, for example because of Covid, ends with ‘final discharge’. Usually, a employment lawyer specializing in Dutch dismissal law assists an employee (expat) before he or she signs such an agreement. This Amsterdam employment lawyer can explain to you that if an expat signs for voluntary dismissal by means of a dismissal agreement, the parties grant each other a final discharge. This means, among other things, that afterwards, after the reflection period of 14 days has expired, you no longer have a claim against your employer. For example: due to unpaid salary, or compensation to which you are still entitled. After all, with a final discharge you renounce any claim.

Final discharge and accident

Does that also apply to compensation for a work-related accident according to Dutch law? Suppose you slip during work in Amsterdam and you become incapacitated for work. Normally, a Dutch employment lawyer then holds the employer liable for the consequences of the injury. Can your attorney still recover this damage from your employer in spite of a settlement agreement?

Rechtbank Limburg has made a statement about this. The Dutch Subdistrict Court concluded from the correspondence that the employee’s lawyer wishes to recover his damages from the employer. Nor had the Subdistrict Court read anywhere in the documents submitted that the employer had denied liability for the injury.

Termination agreement with final discharge in The Netherlands

The parties have entered into a settlement agreement. The content is that the employee agrees to a termination of employment on April 30, 2019 against receipt of a severance payment of € 10,000 gross and final discharge on both sides ‘of all claims that have arisen at the time of the employment or arise from it’.

Then the parties have had a difference of opinion about the final discharge, in particular whether the personal injury is covered by it.

The Dutch court determined that it is important what the parties have declared on both sides, what meaning they may reasonably attribute to this under the given circumstances and what they may reasonably expect from each other.

Description “final discharge concerning all claims from employment” from employer’s lawyer

In that context, the Subdistrict Court considered the following circumstances to be important:

  • the description “final discharge concerning all claims from employment” comes from the lawyer of the employer;
  • in the conversations held between the lawyers, the issue of personal injury claims has never been raised.

Final discharge also for the personal injury case?

On the other hand, according to the court, the circumstance that the employee had already raised the claim on the basis of the injury he had suffered with the employer, before the final discharge was agreed. Therefore, it may be obvious that the employer could understand the “yes” of the employee on the final discharge as also related to the personal injury case.

Employee’s consent to the final discharge

The judge considered that the employee was right. After all, the employer could not trust that the employee’s consent to the final discharge also related to the occupational accident. Further, the employee had not been made aware of the financial consequences of the discharge if he waived his right to compensation for the personal injury.

Employer must verify that an employee actually has the will to relinquish his rights

It is also established case law (jurisprudence) in The Netherlands that an employer verifies whether an employee actually has the will to surrender his rights or otherwise acts to his detriment. If the employer does not do so, he cannot later rightly rely on the fact that he has confidence in the employee’s expression in question.

Severance pay contains nothing extra

In the opinion of the subdistrict court, there is nothing extra in the severance pay for the claims based on the accident. As a result, it was the employer’s responsibility to check whether the employee really intended to have this matter covered by the discharge.
The court thus came to the conclusion that the final discharge does not relate to the accident.

Assessing dismissal with consent

What should you pay attention to when assessing dismissal with consent? Our Amsterdam lawyers advise and negotiate on dismissal law for employees on all issues that arise in the event of dismissal by mutual consent. Always let us assess and check your termination agreement or letter of dismissal in which the employer wishes to terminate the employment contract before you sign:

  • End date or termination date
  • transition fee
  • exemption from work
  • post-contractual terms (such as relationship clause and non-competition clause)
  • reimbursement of the legal and lawyer’s fees
  • unemployment benefits
  • final account: reimbursement of outstanding holidays and leave hours (leave balance), holiday pay
  • outplacement budget
  • bonus and thirteenth month or year-end bonus
  • commission scheme and share scheme
  • certificate, letter of recommendation and references
  • return or retain lease car, laptop, telephone, pension rights
  • final discharge.

Assessment of a settlement agreement according to Dutch Law

In the following events, an assessment of a settlement agreement is possible:

  • redundancy after reorganisation
  • a dispute of understanding or disturbed relationship
  • long-term illness for more than 2 years with no prospect of recovery.

Usually the first proposal from the employer is not a final proposal. Our Amsterdam lawyers check and assess your settlement agreement (vso) legally free of charge on all points, and we also negotiate the highest possible severance pay.

Severance pay in The Netherlands

After all, a severance payment is often agreed upon by mutual consent, but the offered legal transition compensation is not compulsory. However, this is often a guideline in termination agreements. Of course, we will check the amount of the severance pay offered and negotiate with the employer if this compensation is not sufficient.

Attorney’s fees and termination agreement

Usually, a fixed amount is included for the assessment of a settlement agreement as reimbursement of attorney’s fees. The lawyer sends the statement of legal costs of the termination agreement directly to the employer. In that case, the employer is not authorized to set off the VAT. After all, the legal work has been carried out for the employee. Our lawyers in Amsterdam provide free dismissal advice on all aspects of the termination agreements. This also applies to the costs of legal advice and the compensation thereof by the employer.

Contact with Dutch attorney labour law in Amsterdam on final discharge by mutual consent

settlement agreement and final discharge lawyer amsterdam discharge

Are you looking for involvement and a direct, personal contact with an experienced employment law specialist in Amsterdam? Call our specialized lawyer employment law and dismissal law for questions and legal advice on Dutch employment law, dismissal, settlement agreement, final discharge and other employment law issues.

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