What is a settlement agreement (termination agreement) and what to do?

The settlement agreement also known as termination agreement is a document in which agreements are laid down between two parties and which must prevent a conflict in the future or resolve an existing conflict. In disputes, a solution is more often chosen through the court, but it is rare that this offers advantages. It is an energy-intensive and money-consuming process that does not benefit either party.

It is better to make agreements together or with the support of a professional and to include them in the settlement agreement. This agreement is binding. Free check settlement agreement.

Always have your agreement checked before signing it

It is important to read the information carefully when you, as an employee, are presented with a settlement agreement from the employer. Also get good advice about what is and what is not possible within dismissal law. An incorrectly drafted agreement can have major financial consequences.

As an employee, there are situations in which the right to unemployment benefit lapses when you sign the document. Prevent these risks by having your agreement checked .

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How does a settlement agreement work in 2021?

There are various areas of law in which use can be made of the settlement agreement. You can think of administrative law, tax law, insurance law and also employment law. When an employer and employee make agreements about the termination of the employment contract, a settlement agreement can be drawn up for this. On average, the agreement is used in 8 out of 10 dismissal cases. We want to focus online here on the settlement agreements that relate to employment law, i.e. the agreements that are drawn up upon dismissal.

What services can we offer you?

We advise employees when it comes to the settlement agreement in the event of dismissal. You can find the most diverse information about the agreement on our website. We will provide you with more information about unemployment insurance, whether or not the relationship and non-competition clause expires, about taxes, bonuses and holidays. In addition, we also advise on situations in which it may or may not be sensible to conclude a settlement agreement, on notice periods and on the amount of a possible transition payment.

Much confusion among employees

uwv In practice, there is a lot of uncertainty about the settlement agreement among employees. It is therefore true that you do not have to deal with such a document every day. It is important to know that you are under no obligation to sign the document. If, for whatever reason, you cannot fully agree with the agreements noted in the document, you do not have to sign this. The agreement must be drawn up to the satisfaction of both the employer and the employee.

As an employee, you want to be sure that you are still entitled to unemployment benefits from the UWV after signing the agreement. In addition, there is often the question of whether there is a right to a transition payment. You can contact us at any time to check your agreement. We can provide you with sound advice, so that you know whether it is wise to sign or not. You can also contact us to negotiate your dismissal proposal.

Which matters are included in the settlement agreement?

The settlement agreement must contain the details of both parties, the company details of the employer and the personal details of the employee. A drafting date must be stated and it is important that the employee’s position and date of entry into service are included.

Of course there are also optional matters that can be added to the settlement agreement. For example, it can be recorded which company property the employee must return on the last working day, such as a telephone, company clothing, car or laptop of the company. It can be stated how many vacation days are still outstanding and whether these will be paid, exemption from work or whether there is a competition or non-solicitation clause after the termination of the employment contract.

The employer wants to avoid dismissal proceedings

dismissal procedure Employers are not allowed to fire employees just like that. An employer must have a good reason for this. If it is desirable for an employee to leave the company, a dismissal procedure often has to be started. Depending on the situation, this can be done via the UWV or via the subdistrict court. There is a risk that the employer will ultimately not receive permission to dismiss the employee. In addition, such procedures cost a lot of time and money.

If the employer and employee can make mutual agreements about the termination of the employment contract, by means of a settlement agreement, then no dismissal procedure needs to take place. In many cases, the agreement is therefore drawn up to avoid lengthy and costly dismissal proceedings.

How much reflection time is there to dissolve a settlement agreement? reflection period for determination agreement

The settlement agreement is a binding agreement between employer and employee, but there is a reflection period for the employee. Once you have signed the agreement, you still have two weeks to reconsider this decision. It is important that the document states that there is a reflection period of two weeks.

If no reflection period is stated in the agreement, you have a total of three weeks to change your mind. If a new settlement agreement is drawn up after you have changed your mind about the first agreement, the reflection period will start again. Read more about settlement agreement and reflection period .

Am I entitled to a transition payment (severance payment) with a settlement agreement?

euro We know the severance payment and the transition payment. There is often some confusion about this and we are happy to make the difference immediately clear. Until 1 July 2015, employees who were made redundant could receive severance pay. The transition payment has been in place since 1 July 2015. If you are dismissed with immediate effect or if you resign yourself, you are under no circumstances entitled to a transition payment. Are you employed by your employer and is he presenting you with a settlement agreement? Then in most cases you are entitled to this reimbursement, even if there is no permanent contract. The reason for the dismissal is also irrelevant, with the exception of summary dismissal, and you may also be entitled to a transition payment with a fixed-term contract that is about to expire.We can of course check this for you. Read more aboutsettlement agreement transition payment .

Am I entitled to unemployment benefit with a settlement agreement?

unemployment benefits Settlement agreement and ww? There are certain requirements that must be met to ensure that the settlement agreement is WW proof. In the first place, the notice period stated on the employment contract must be complied with . This notice period must also be stated in the document and must be observed. Secondly, it must be the case that the initiative comes from the employer. The employee may therefore not request an employer to draw up a settlement agreement if he himself wishes to resign.

The employer must be the party that wishes to terminate the employment contract. Finally, it must not be the case that the dismissal is related to an urgent dismissal reason caused by the employee. This could include, for example, being dismissed with immediate effect. Read more about settlement agreement and ww .

How does the agreement work in case of pregnancy or illness?

You may receive a settlement agreement from your employer when you are sick or when you are pregnant. In both cases, it is strongly recommended to have the agreement assessed by us first. This is because the settlement agreement can cause problems in such situations, such as the expiry of the right to unemployment benefits. If you are pregnant, it should also be taken into account that it is often more difficult to find a new job. Read more about settlement agreement in the event of illness.

What is the legal notice period?

In most cases a notice period is included in an employment contract. When a settlement agreement is drawn up for the termination of the employment contract, the stated notice period must be applied. Any unemployment benefit will only start after the notice period has expired. This means that an employee will not receive unemployment benefit until this date. If the employee leaves employment (much) earlier and cannot immediately start working elsewhere, there will be no income at all during this period.

If this is not observed by your employer, and the date stated in the agreement is much earlier than the official term of your employment contract, it is strongly inadvisable to sign the dismissal proposal. Read more about the notice period in the settlement agreement .

Negotiating the settlement agreement?

negotiate The employer is responsible for drawing up the settlement agreement. Naturally, the employer will do this with agreements that are desirable for the employer himself. This does not mean that these agreements are also desirable for you as an employee. You do not have to agree with the relevant agreements. There is room for negotiation.

In this way, agreements can ultimately be made that are to the satisfaction of both parties. In many cases, the parties will both have to compromise in order to reach proper agreements.

What if no agreements can be made?

Your employer and you may not be able to reach an agreement. Agreements remain in the settlement agreement that are not to the full satisfaction of either party. If these cannot be enforced, no agreement can be drawn up. In this case, dismissal proceedings will have to be started with the subdistrict court or the UWV. It is possible that you cannot and may not be fired. This often causes difficulties in the workplace. It is therefore strongly recommended, in the interest of both parties, to try to reach an agreement among themselves.

What is the final discharge?

In most cases, a discharge provision, or a final discharge, is included in the settlement agreement. If this is the case, and the agreement has been signed by both parties, this means that the employee may no longer demand anything from the employer once all agreed financial matters have been settled. The employer may also no longer demand anything from the employee. With the inclusion of the discharge provision, the parties are thus, as it were, indemnified from each other. If all financial agreements have been fulfilled, this means that no additional claims may be submitted. The dismissal is thus fully completed and properly completed.

Do you need immediate help and support with your dismissal?

When you have received a settlement agreement from your employer, you actually already know that there is a period in which a lot will change. With your dismissal, you not only lose your job, but you also lose financial stability, your permanent work environment and colleagues, for example. If you are fired, it must be properly arranged and this is what the settlement agreement is intended for. We have over 10 years of experience in checking and assessing these agreements. In addition, we have all the expertise in-house in the field of advice.

Always have your agreement checked before signing anything

It is advisable to always have a settlement agreement (= termination agreement dismissal) checked by an employment lawyer before signing anything. We will study your employer’s proposal and contact you today. This assessment in outline (whether or not to agree) is completely without obligation and free of charge.
9 best tips for dismissal through a settlement agreement

When you are faced with a dismissal, it is often a shocking statement. Your future suddenly becomes uncertain and you probably have a lot of thoughts about your future. If your employer submits a settlement agreement to you, it is important to take a good look at this. It is of course the intention that your dismissal is arranged under the most favorable conditions for you. With these 9 tips you will ensure that you get the best out of it.

Have you received a settlement agreement? Upload your agreement for a free check .

Tip 1: Never sign the agreement immediately

sign a settlement agreement The most important thing is that you never sign a settlement agreement directly. Even if your employer tries to pressure you. Receive the agreement and indicate to your employer that you first want to read it thoroughly and have it tested before you sign it. Using coercion to sign the agreement is illegal and you can challenge it in court if it does happen. In addition, you always have the right to revoke a signed settlement agreement in writing without stating a reason. The term for this is 14 days after the signing date.

Tip 2: The employment will remain in effect until you sign

Recall that on the basis of the law remains employed by your employer until you sign a settlement agreement. Even then, the dismissal does not take effect immediately, there are legal rules for this. You have the right to thoroughly study the agreement and have it checked by a lawyer before you agree to this. If you do not agree with the conditions, this must be discussed before signing can be done.

Tip 3: Have it checked whether you are entitled to unemployment benefits

If you are fired, you are entitled to benefits if you do not find a new job in time. In most cases you are entitled to unemployment benefits. In the event of illness, you are entitled to benefits under the WIA after dismissal. The nature and amount of this benefit depends on the percentage of incapacity for work. Your employer may only fire you if you have been ill for 2 years and are not yet able to resume all or part of your work. If you are not entitled to benefits due to an error in the agreement, you may immediately fall back on social assistance. This benefit is almost always lower than another benefit. It is therefore important to have this properly checked by us.

Tip 4: What does the Social Plan say?

When a large company goes bankrupt or during a major reorganization , a Social Plan is usually drawn up in consultation with the trade unions for the employees who will lose their jobs. The schemes in the Social Plan are generally more favorable than with an individual dismissal. If you find yourself in such a situation, always have your settlement agreement checked against the agreements in the Social Plan to prevent you from being disadvantaged.

Tip 5: Avoid a gap in income

euro Keep in mind that you are only entitled to unemployment benefit if it meets the legal requirements. So make sure that your settlement agreement includes the date up to which your employer will continue to pay your salary, even if you immediately resign from your activities. If this is not properly arranged, you run the risk that the UWV will only start your unemployment benefit and you will therefore have no income for that period.

Tip 6: Check the accrued pension

If you are employed, you almost always accrue pension rights. Check how much pension you have accrued and check whether the employer has paid the pension contribution in full. Once you have chained the settlement agreement and the statutory withdrawal period has passed, you cannot change it again. This is because almost all settlement agreements include an article on ‘final discharge’, whereby the employer and employee declare that they have nothing to claim from each other outside this agreement.

Tip 7: Are there things missing from the agreement?

Check whether all aspects that are important have actually been included in the settlement agreement. This includes the payment of overtime, any outstanding days of leave and the right to bonuses and a 13th month. But the use of a company car, telephone or laptop must also be included in this. When do you return the car, can you possibly take over the business telephone because the mobile number is also used privately? When must keys and / or access cards be returned? What about the non-competition clause when looking for another job? Make sure that good and clear agreements are made about this and that these are also included in the settlement agreement.
Tip 8: Have a reimbursement for legal costs included

It is always wise to seek legal advice during dismissal proceedings. It is advisable to include in the settlement agreement that you will receive compensation for engaging us.

Tip 9: Have your agreement checked by us for free

Unless you have legal training yourself, there is a good chance that you will overlook something when going through the settlement agreement. That is why it is always advisable to engage us. Even if you think you can arrange it yourself, this is recommended. Dismissal often involves emotions and there is a good chance that you will overlook something essential. So make use of the opportunity to obtain legal assistance. Never sign a settlement agreement before having it reviewed by us. We specialize in employment law.

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Should I sign the settlement agreement or not?

The basic principle of a settlement agreement is that the employer and employee come to termination of the employment relationship in consultation. Both employer and employee must therefore agree to the content of a settlement agreement before signing it. Employers often want to put pressure on an employee to sign the agreement quickly. After all, they have an interest in the employment contract ending as soon as possible because the salary must continue to be paid up to the formal end date. However, don’t let that pressure you. Indicate that you first want to read the agreement thoroughly and submit it to us before deciding whether or not to sign it. Remember that you will remain employed as long as you have not signed the settlement agreement.