Termination by mutual consent in the Netherlands
What is a termination agreement? A termination agreement is an agreement between Employee and Employer and governs the rights and duties of the parties arising from the termination of the employee. Our Dutch specialist employment solicitors based in Amsterdam deal with termination agreements throughout the Netherlands every day. We give fast advice on termination agreements wherever you are in the Netherlands or abroad.
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 settlement agreements for employees. We are specialists in negotiating settlement packages and redundancy package.
Advice on termination agreements in Amsterdam
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.
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.
Mutual consent to terminate an employment agreement
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 termination 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. When you sign an agreement, your employment is terminated. Once the termination 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.
Termination of employment contract in the Netherlands: 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. Advice on a settlement agreement is always provided by our qualified employment law solicitor.
Compensation payment in a settlement agreement – transition payment
Settlement agreements usually involve a benefit to the employee by way of a compensation payment (compensation for loss of employment). 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.
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.
Redundancy: UWV and Dutch unemployment benefit
Agreeing to a correct settlement agreement does not constitute a ground for the UWV to refuse unemployment benefit. However, in some cases the UWV can (partially) refuse unemployment benefit:
- in case of an an urgent cause (immediate dismissal),
- if the initiative comes from the employee,
- if the notice period has not been observed.
How much does legal advice on a settlement agreement cost? Employer will usually pay the legal costs in full
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. There is no legal obligation on the employer to pay for the employee’s legal costs but it is usual to make a contribution towards the costs. An employer will therefore usually pay the legal costs for an employee to see a solicitor or qualified adviser or pay a contribution towards legal fees. The proposed settlement agreement probably contains a clause confirming that your employer will pay your legal costs. This amount is normally sufficient and so there is no extra cost payable by the employee, unless the matter becomes very complex.
Contact our employment lawyers in Amsterdam on termination agreements (mutual termination agreement)
Our Dutch employment law solicitors in Amsterdam, the Netherlands, have a huge amount of experience of negotiating and advising on termination agreements. We can provide you with the advice you need quickly and easily by telephone and email, or contact our lawyers to arrange an appointment for specialist advice on your settlement agreement.