Termination Agreement Upon Dismissal

If your employer wants to dismiss you without having to go through a procedure at the UWV or the subdistrict court, he can do so by means of a termination agreement. A termination agreement is also known as a settlement agreement. This is a written agreement in which the agreements regarding your dismissal are established. This includes all matters related to the settlement of your employment, such as the date on which you leave employment, the amount of your transition payment and the settlement of your holiday pay.

If you and your employer lay down the arrangements regarding your dismissal in a termination agreement, then there is dismissal by mutual consent. This is a commonly used way to terminate an employment contract in consultation. However, there are a number of conditions that are of great importance to you, especially in order not to forfeit your benefit rights.

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The reason for dismissal

The termination agreement must state when you will leave employment and the reason for your dismissal. For your right to unemployment benefits, it is very important that the initiative for the dismissal lies with your employer. This must be clearly stated in the termination agreement. You may agree to your dismissal and you do not have to object to it, but you must not have taken the initiative yourself. If you do, or if the wording in your agreement allows you to interpret it that way, the UWV can rule that you are culpably unemployed. This means that you are unemployed through your own doing and you forfeit your benefit rights. It is therefore important to state in clear terms in the termination agreement that your employer has taken the initiative to fire you.

In addition, you can also have it recorded that you were not fired immediately or through culpable acts. These are also reasons for the UWV to rule that you are culpably unemployed and therefore not entitled to benefits. To safeguard your benefit rights, you can therefore have it literally stated in the termination agreement that there has been no culpable act and instant dismissal.

Cancellation and reflection period

The termination agreement must state the end date of your employment. It is important for your financial situation that the notice period is carefully observed. This means that your employment only ends after the statutory notice period has expired. If the end date of your contract is before the end of the notice period, then you will not receive any benefits for the intervening period. The UWV assumes that the notice period is observed. After your employment contract has ended, you will no longer receive a salary, so that means that you will be without income during that period. That is why it is wise to check whether your end date is after the cancellation period.

As an employee, you have a 14-day reflection period after signing the termination agreement. During this period you can decide to withdraw your consent to the dismissal by notifying your employer in writing. It is advisable to record this reflection period literally in the termination agreement.

Transition payment

In the event of dismissal via a termination agreement, there is usually a right to transition payment. Every employee who has been employed for at least two years is in any case entitled to a so-called transition payment. This is a financial compensation for your dismissal, which is calculated on the basis of your monthly salary and the number of years you have been employed. It is good to know that this is the minimum amount you are entitled to. In the case of dismissal by mutual consent, however, a higher transition payment is often possible. In the event of dismissal via a termination agreement, your employer can avoid proceedings at the UWV or the subdistrict court, but he does need your cooperation for this. In other words, without your signature, your employer cannot fire you. That means you have a strong negotiating position,so there is a good chance that you can get a higher transition payment.

Financial settlement

The termination agreement also lays down how the financial settlement of your employment contract is arranged. This includes the severance pay, but also, for example, the settlement of credits such as your holiday pay, your remaining vacation days and any bonuses or a thirteenth month. To ensure that you are not drawing the short straw and that you have secured your benefit rights, we recommend that you always have a termination agreement checked by a legal advisor. We look forward to seeing you, making improvements to your agreement and negotiating better terms and conditions and a higher transition payment package. This way you can be sure that you will not be left empty-handed. Do you want to know what we can do for you? Please feel free to contact us.