Has your employer asked you to sign a Settlement Agreement or Termination Agreement? Should you accept and sign? Or negotiate more favourable terms and conditions? When entering into an agreement terminating your employment, it is important to be aware of the legal and financial consequences and any potential risks. Always keep in mind that the proposed terms and conditions are often negotiable.
What is a Settlement Agreement?
In general, an employer cannot simply terminate an employment contract unilaterally. If an employer wishes to terminate an employment contract, the employer must request prior permission from the government (the UWV) or ask the court to terminate the employment. However, the rules for dismissal are strict, and the dismissal processes can be time-consuming and costly for both parties. Therefore, many employers opt for termination by mutual consent. To achieve this, the employer usually offers the employee a financial incentive to leave the company voluntarily based on an amicable settlement agreement.
Should you accept a Settlement Agreement?
Whether you should accept the proposed Settlement Agreement depends on your situation and the details of the settlement offer. You may simply accept or reject the proposed Settlement Agreement, or you could choose to negotiate more favourable terms for the termination. Much depends on the alleged reason for termination, your legal position and your view on this – is there a redundancy situation, discussions about job performance or a sickness and/or conflict situation?
Legal advice and assistance – budget for legal fees provided by the employer?
When entering into a Settlement Agreement or Termination Agreement, it is important for the employee to be aware of the consequences and the potential risks. For this reason, employers often offer a budget for legal fees to have the proposed Settlement Agreement reviewed by a Dutch employment lawyer. The amount of the budget differs case by case and can also be further negotiated between the employer and employee.
Our legal advice can help you to understand:
- The conditions of the Settlement Agreement / Termination Agreement and the consequences for your situation
- How to ensure that your entitlement to unemployment benefits will not be jeopardized by signing a Settlement Agreement – and you can sign during sickness?
- Any risks and red flags you need to be aware of
- How to negotiate more favourable terms and conditions of the settlement agreement aiming for a better financial outcome. If you wish, we can also negotiate the conditions with your employer on your behalf, and
- If you are an expat, any potential impact on your residence rights and the 30% ruling.
How we work
If you wish us to review a Settlement Agreement / Termination Agreement and provide you with legal advice, we can arrange for an office meeting or a video call. During such meeting we can discuss your employment situation, the alleged reasons for termination, your legal position, the proposed Settlement Agreement and whether it may be worthwhile negotiating better terms and conditions. We can also discuss whether you prefer to negotiate the conditions yourself, or whether you wish us to negotiate the conditions on your behalf.
In order to assist you to review the terms and conditions and negotiate the optimal terms and conditions, we need to ask for the following information:
- The proposed Settlement Agreement / Termination Agreement
- Your employment contract(s) and addenda (if any)
- A recent salary specification (pay slip)
- An overview of bonuses received in the past three years (if any)
- Any information about shares, options or other equity rights
- An organisational chart, showing your team and management
- A Memo, preferably in a Word-document, describing:
- Your employment history
- The alleged reason for the termination
- Any specific questions and/or concerns you may have and wish to discuss
- Depending on your situation, we may request additional documents and information.
For our rates click here.
Contact us
We have extensive experience in advising expats on Settlement Agreements and negotiating better terms and conditions. Do you wish to contact us?
We would be pleased to assist you. You can contact us by using our contact form below or send us an email to info@noordamadvocatuur.nl.
All information you share with us will be treated strictly confidential.