Final discharge as a condition in a termination agreement


settlement agreement attorney  AmsterdamEmployer may not make final discharge a condition of a termination agreement

In the Netherlands, an employee may not be fired if he or she is ill. For a period of two years the prohibition on dismissal applies. After those two years, the employment contract may be terminated due to long-term occupational disability. If the employee then makes a proposal to terminate, it is usual for the employer to go along with this without setting further conditions.

In this article, our Amsterdam employment lawyer, Ms Krystle Aaron-de Bies, discusses a judgment in which the Dutch Supreme Court confirmed the above.

Obligation to continue to pay wages for two years

An employee had become ill and incapacitated for work. For her Dutch employer, this meant that he had an obligation to continue to pay wages for two years. At the end of those two years, the employee proposed entering into a termination agreement. She was still employed by the employer, but he was no longer obliged to continue paying her wages.

Final discharge and termination agreement, our Amsterdam employment law attorney explains

The employer only wanted to agree to the contract and the transitional compensation if the employee granted him final discharge from any other claims. This means that if the woman signed the agreement, she would also agree that she would no longer have the right to sue the employer for other matters at any time.

The employer and employee litigated on up to the highest court in the Netherlands, the Supreme Court. The Supreme Court cited the 2019 Xella judgment. In it, the following was decided:

– if an employment contract is terminated due to long-term occupational disability, the starting point is that an employer is obliged on the grounds of good employment practice to agree to a proposal by the employee to terminate; and
– subject to the granting of a transitional payment in the amount up to the day on which the contract cannot be terminated due to illness.

Employer only wants to agree against final discharge

Subsequently, the Dutch Supreme Court ruled in the present case that an employer is not acting as a good employer if an employee makes a proposal for termination and he only wants to agree against final discharge.

On the basis of this judgment, our labour lawyer therefore concludes that: employers may never impose final discharge as a condition for terminating an employment contract.

Contact with a lawyer in Amsterdam for employment law advice on transition pay and settlement agreements

Are you looking for commitment and direct, personal contact with an experienced employment law specialist in Amsterdam, the Netherlands? Call our specialized lawyer in employment and dismissal law for questions and legal advice on employment law, termination agreements, dismissal, transition pay and final discharge.


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