A lawyer may agree to a Dutch settlement agreement on behalf of the employee. What happens if, despite this agreement, the employee subsequently refuses to sign the termination agreement? Our Dutch employment and dismissal lawyer in Amsterdam provides legal advice on termination agreements / settlement agreements. A termination / determination agreement in The Netherlands is an agreement between an employee and an employer who together agree to terminate the employment under certain conditions. In this form of dismissal, a lawyer (authorised representative) specialising in employment law usually assists the employee.
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Settlement or separation agreement: does an agreement between the lawyers count as signature?
Is the settlement agreement still valid because there was already an agreement between the lawyers? And at what point, if the lawyers agree, does the statutory reflection period of 14 days start for the employee? After agreement of the attorney at law or only after signature of the termination agreement by the employee?
Dutch case law clarifies this.
Employee refuses to sign Dutch settlement agreement
In a case between an employee and her employer, there was a lack of clarity as to whether the employee was bound by a termination contract / settlement agreement with which her authorised representative (lawyer) agreed on behalf of the employee on 29 August 2019. Later on, on 12 September 2019, the employee herself explicitly refused to sign the termination / settlement agreement with her employer when she found out that her farewell would not be at her work.
Reasonable refusal to sign the settlement agreement?
The employer was convinced that a termination agreement / settlement agreement had been concluded after all. After all, the employer’s authorised representative (attorney) agreed with the employee’s dismissal on behalf of his client. The employer later asked for dismissal before the court. By refusing the employee to sign, the employer feared that he would miss out on a contribution from the UWV to the WW benefit costs, which would have to be paid entirely from the employee’s own resources. According to the employer, this is seriously culpable behaviour on the part of the employee and the employer therefore has an interest in a decision by the subdistrict court regarding the end of the employment contract concluded between the parties.
The employee argues that within her 14 day cooling-off period from the consent of her representative, she has dissolved the contract and is therefore not bound by the termination contract / settlement agreement.
Cooling-off period
The court in The Hague ruled that the employee was right. Article 7:670b of the Dutch Civil Code provides that an employee has the right to dissolve a termination agreement / settlement agreement without giving reasons in writing within a period of 14 days after the date on which the agreement was concluded. This cooling-off period is also included in the termination agreement / settlement agreement. The court’s arguments were as follows:
According to the court, the employee’s refusal to sign cannot be interpreted otherwise than that the employee invoked this cooling-off period in good time. In this situation, the employer could not and should not rely on the fact that the termination agreement / settlement agreement had been concluded after all. Her representative was also not present when the termination agreement / settlement agreement was signed. As a result, it cannot reasonably be objected that she did not make this refusal in writing.
A dissolution on the e-ground (culpable behaviour) is therefore not at issue in this situation. The fact is that the employee was not culpable by not signing the contract, so that the employer can simply be expected to allow the employment contract to continue. Account must also be taken of the fact that the employer did not request the compensation mentioned in the termination agreement in the event of termination.
Employee may dissolve a settlement agreement
The conclusion is that the employee was free not to sign the termination agreement and to dissolve/ terminate it without reason. The employer may therefore not blame the employee for this. Ultimately, the employment contract was terminated on the grounds of Section 6:671b (9) (a) of the Dutch Civil Code and the employee received severance pay.
Employee revokes consent to Dutch termination of contract
In another judgment of the District Court of The Hague, an employee’s wage claim was rejected. The employee was convinced that the settlement/ termination agreement had not been concluded because it had not been signed. For this reason, the employee should be able to resume her work and be entitled to pay. In her opinion, the e-mail exchange between the two agents could not be regarded as “a contract, with which the employment contract is terminated”. The last draft termination agreement drawn up by the employer dates from 15 February 2016. One day later, the employee, through her lawyer, withdrew her consent. The employee is thus convinced of the fact that she is still within her 14-day cooling-off period.
Is e-mail exchange between lawyers considered as a settlement agreement in The Netherlands?
The employer, on the other hand, is of the opinion that the e-mail exchange between the lawyers should be regarded as a settlement agreement, with which the employment contract is terminated. According to the employer, it is certain that the parties with:
- the sending of the termination agreement,
- subsequent correspondence
- and the agreement thereon expressly given by the authorised representative on behalf of the employee,
- have agreed in writing on the termination of the employment contract and the associated conditions. For this reason, the 14-day cooling-off period would have started on 29 January 2016, as a result of which the employee was too late in withdrawing her consent. Therefore, the employee is not entitled to resumption of work and pay.
Now that in the last e-mail exchange of 29 January 2016 between the two authorised representatives the content of the previous draft termination agreement/termination agreement had been explicitly negotiated and an agreement would have been reached after these amendments to the draft, the termination agreement/termination agreement must, according to the court, have been concluded on 29 January 2016.
When does the cooling-off period commence in the event of dismissal?
If you are assisted by an employment lawyer as an authorised representative to draw up a settlement agreement/termination agreement and you agree to the terms and conditions, then this agreement should be regarded as the date of ”signature”. From this moment on, the reflection period of 14 days will run and not from the moment you sign the termination agreement/termination agreement.
Contact a Dutch employment law lawyer in Amsterdam about settlement agreement or termination agreement
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