What is a Settlement Agreement?
A settlement agreement or termination agreement (Mutual Termination Agreement, in Dutch: vaststellingsovereenkomst), also sometimes called separation agreements or severance packages, governs the rights, responsibilities and benefits between an employer and an employee arising from the termination of the employee. Employee termination is the process by which an organization ends an individual’s employment. Our Dutch specialist employment solicitors based in Amsterdam deal with settlement agreements (termination agreements) throughout the Netherlands every day.
Fast (free) advice on settlement agreements in The Netherlands
We give fast advice on settlement agreements and Mutual Termination Agreements wherever you are in the Netherlands or abroad on:
- severance payment, transition compensation,
- mandatory notice period,
- business economic reasons or a disturbed employment relationship,
- exemption from work, untaken vacation days, garden leave
- non-competition clause and non- solicitation clause,
- final discharge, final financial statement,
- company resources,
- unemployment benefit (WW).
Employee layoffs: Check termination agreements
Our Amsterdam employment lawyers are specialists in employment law and dismissal law. We give legal advice on dismissal, we draw up settlement agreements and check (assess) termination agreements for employees. We are specialists in negotiating settlement packages. We always try to have the costs for legal help reimbursed by your employer.
Mutual consent to terminate an employment agreement
A severance agreement is a contract. If the parties have mutually agreed to terminate an employment agreement, the agreements made between the employee and the employer are often laid down in a settlement agreement. Settlement agreements are an increasingly popular way to resolve employment disputes and are frequently used when an employer needs to terminate a person’s employment.
Settlement agreement: advice in Amsterdam
An agreement and release is another term for a severance agreement. Mutual Termination Agreements can be used at any stage of an employment relationship:
- Settlement agreements in The Netherlands are typically given to employees when they are being made redundant, in case of reorganisation and business closure,
- agreements are also offered to employees if they are performing badly (unsatisfactory performance),
- or in case of a damaged working relationship.
Independent legal advice
When you sign an agreement, your employment is terminated. Once the settlement agreement is signed, an employer cannot bring any claim against the employer. With a termination agreement, you will have more control over the outcome of your dispute and avoid the risk of a judge deciding against you. A settlement is usually a compromise where both parties give and take. Because of this, an employer needs to take independent legal advice on the agreement before signing.
Settlement agreements usually involve a benefit to the employee by way of a compensation payment. Our Amsterdam lawyers can help you negotiate a better deal, which may include a bigger pay-out (transition fee), in order to ensure that the payments you receive compensate you as much as possible for your future loss of earnings until you find a new job. Effective 1 January 2020, a transition payment is mandatory whenever an employer terminates or fail to renew a temporary employment contract. The duration of the employment contract makes no difference.
Details in Dutch settlement agreements
Our employment law solicitors are also well versed in the finer details in termination agreements. There are also non-financial aspects which can be good to negotiate, such as the termination date, an agreed reference, post-contractual clauses, non-solicitation, non-competition clauses and the possibility of garden leave.
Employer will usually pay the legal costs
Our lawyers are experienced at guiding our clients through the process of ending their employment with an agreement. For a termination agreements it is essential to take legal advice before signing. An employer will usually pay the legal costs for an employee to see a solicitor or qualified adviser or pay a contribution towards your legal fees. This amount is normally sufficient and so there is no extra cost payable by the employee, unless the matter becomes very complex.
Confidentiality provisions in Mutual Termination Agreements
Termination agreements usually contain strict confidentiality provisions to ensure that the contents of the settlement agreement remain under wraps. The employee must have a suitable amount of time to consider the terms of the agreement. A minimum of 14 calendar days after the agreement has been concluded is generally considered to be reasonable.
UWV and unemployment benefits
Agreeing to a correct settlement agreement does not constitute a ground for the UWV to refuse unemployment benefits. However, in some cases the UWV can (partially) refuse unemployment benefits:
- in case of an an urgent cause (immediate dismissal),
- if the initiative comes from the employee,
- if the notice period has not been observed.
Applications for unemployment benefits (Werkloosheidswet: Unemployment Insurance Act) have to be submitted to the Government’s Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen or UWV). Unemployment benefit is granted by the UWV under the following conditions:
- you worked at least 26 weeks out of the last 36 (if you worked for 1 day in a given week, that week is counted);
- you are available for a new job;
- you became unemployed through dismissal as mentioned above (termination agreement or settlement agreement).
Contact our employment lawyers in Amsterdam
It is important to have a severance agreements attorney determine if the agreement is fair and reasonable. Severance agreements are often negotiable. Our Dutch employment law solicitors in Amsterdam, the Netherlands, have a huge amount of experience of negotiating and advising on redundancy and termination agreements. Contact our lawyers to arrange an appointment for specialist advice on your settlement agreement.