Common mistakes in settlement agreements

Recognize the errors that can impact unemployment benefits, severance pay, and future rights.

A small mistake can have major consequences

Settlement agreements are often presented under time pressure. It is precisely then that agreements regarding unemployment benefits, the termination date, financial terms, or restrictive covenants are easily misunderstood or overlooked.

Listed below are the errors that pose the greatest risk in practice. The solution is usually simple: review the entire proposal and ensure necessary corrections are included before signing.

Use the full checklist

The basics: what is a settlement agreement?

Important

Do not assume that a standard template automatically suits your situation.

Get it checked for free

1. Agreeing too quickly

The employee signs before the full implications and negotiation possibilities are clear. As a result, errors or unfavourable terms remain in the agreement.

Prevention:ask for time, gather information, and respond only after a thorough review.

2. Incorrect reason for dismissal

The text suggests voluntary resignation, culpable conduct, or urgent cause for dismissal. This can cause problems when applying for unemployment benefits.

Prevention: State the initiative and the reason for termination factually, neutrally, and correctly.

3. Incorrect end date

The agreement does not take the correct notice period into account. Consequently, salary payments might cease before unemployment benefits can begin.

Prevention: Check the statutory, contractual, or collective labour agreement (CLA) notice period and align the end date with it.

4. Focusing only on the compensation

Holiday entitlement, bonuses, expense reimbursements, pension contributions, or legal costs are overlooked, even though these items can collectively represent significant value.

Prevention: Check the full final settlement and record both the amount and the payment date.

5. Allowing clauses to remain in effect

Non-compete, non-solicitation, or study cost repayment clauses may remain in force unnoticed, hindering the employee after departure.

Prevention: Explicitly agree on which clauses will lapse, be limited, or remain in effect.

6. Relying on verbal promises

For example, the employer promises release from duties, a bonus, or a positive reference, but this is not included in the final agreement.

Prevention: Ensure every important promise is recorded in writing before signing.

7. Underestimating the full and final discharge

A full and final discharge clause means that unknown or forgotten claims can no longer be asserted later.

Prevention: First, identify all potential claims and check whether exceptions are necessary.

8. Ignoring special circumstances

A standard settlement agreement is used in cases of illness, pregnancy, a fixed-term contract, or a serious employment dispute. Different risks and rules may apply in these situations.

Prevention: Seek specialist advice and do not use generic standard wording without verification.

Found an error: what should you do?

Not yet signed

Have the error corrected and review the entire new version before signing.

Already signed

Immediately check if the statutory cooling-off period is still in effect and, if necessary, rescind the agreement or propose amendments in writing.

Cooling-off period expired

Have the situation assessed to see if any legal options remain; rectification is often more difficult and depends on the specific circumstances.

Check the risk areas

Use the checklist to systematically review facts, unemployment benefits (WW), deadlines, financial terms, work arrangements, and future restrictions.

Go to the checklist

Negotiate corrections

Correcting an error may affect other terms as well. Therefore, view the proposal as a single, cohesive package.

Read about negotiating

About the author

Mr. Edwin van Jaarsveld

Edwin van Jaarsveld has over 20 years of experience with dismissal cases and regularly publishes about them.

Edwin’s expertise can also be found on:

Avoid a costly mistake

Have your settlement agreement reviewed before agreeing to it.

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Frequently asked questions

What is the most common mistake made with a settlement agreement?

Signing too quickly without checking the full legal, financial, and practical consequences.

Can an incorrect end date affect unemployment benefits?

Yes. If the notice period is too short, UWV may base its calculations on the statutory notice period, potentially delaying the start of benefit payments.

Are verbal agreements sufficient?

No. Always record important commitments in writing in the final agreement.

Can I correct an error after signing?

You can generally rescind the agreement in writing within the statutory cooling-off period. After that, rectification is more difficult and depends on the circumstances.

Should I only have the severance pay checked?

No. Unemployment benefits, the end date, the final settlement, clauses, the full and final discharge, and special circumstances are also important.

Reviews

Professional advice

Rishico

Your dismissal specialists helped me very well with professional advice following a labor dispute I had with my employer. They clearly have experience with settlement agreements. I definitely needed their assistance to reach a good agreement with my employer. Thank you for the clear communication and all the help!

My thanks

Carla ten Bulte

My thanks to Mr. Geradts,

With great professionalism, decisiveness, speed, and effectiveness, I was able to conclude a good settlement agreement. If your first counteroffer hadn’t been so strong, I wouldn’t have been able to secure even half of it.
Not only because of the money, but certainly also to be able to close my employment history with dignity.
I wish every employee in such a situation could have such a skilled lawyer!

Good severance payment

Metternich

I want to sincerely thank you for the excellent help I received when my employer wanted to terminate my employment contract with a settlement agreement.
You advised me not to sign the agreement and, through negotiations, secured my unemployment benefits and severance payment.

Good advice

Louman

We are an employer in a cyclical industry. Sometimes there is plenty of work, other times too little.
Therefore, we regularly have to part ways with employees for “economic reasons.”
We use the services of vaststellingsovereenkomst.org for this. They know exactly how a dismissal request to the CWI or the subdistrict court should be prepared.

Even in cases where an employee underperforms or behaves inappropriately, we have had good experiences with the lawyers at vaststellingsovereenkomst.org.
They are always available to us with sound advice and have never disappointed us.

Difficult situation

Singh

A dismissal specialist helped me in a very difficult situation. I had been so foolish to sign a letter in an emotional state, resigning myself. Because of this, I lost my salary and wasn’t entitled to unemployment benefits. Vaststellingsovereenkomst.org managed to reverse this. They were able to prove that I signed under pressure and didn’t fully understand what I was doing.
In the end, I left with a good severance payment and now I have another job. Without the help of Vaststellingsovereenkomst.org, I would be in serious financial trouble right now.

Higher severance payment

Gast

I would like to sincerely thank you for the quick and professional assistance.
My employer unexpectedly presented a settlement agreement to terminate my employment contract, but thanks to your help, I received a higher severance payment and compensation for my vacation days.

Excellent assistance provided

Thijssen

Recently, you helped me with my dismissal case. I am very satisfied with the assistance provided. The lawyer was very involved and well-versed in dismissal law. He understood well that I didn’t want a long procedure but wanted the matter resolved quickly.
That solution came swiftly and to my full satisfaction. I didn’t even have to visit your office. Communication was handled by phone and email, so you were always accessible.
My rating: a solid 10.

Dismissed but still well helped

A. van den Berg

Because of a conflict at work that got seriously out of hand, I was dismissed immediately (summary dismissal). I had behaved badly during that conflict, so I could understand why my boss took such a harsh measure.
But I still had to fight the dismissal, because I had no job and no right to unemployment benefits. Fortunately, the dismissal specialist dared to take the risk and started a procedure against my employer on a No Cure No Pay basis. Without the possibility of No Cure No Pay, I wouldn’t have dared to do it myself.
In the end, after two procedures, the lawyer from vaststellingsovereenkomst.org succeeded in securing my right to unemployment benefits and even a severance payment.

Dismissal assistance

van Vliet-Houtman

I worked with great pleasure from the age of 18 at a flower exporter in Aalsmeer.
When I was 54, my employer applied for dismissal through the CWI for economic reasons. At that time, I engaged Mr. Edwin van Jaarsveld from Ontslagspecialist for dismissal assistance.
A dismissal permit could not be avoided because my employer was really in financial trouble. Since my employer offered only a very small severance payment, Mr. van Jaarsveld advised me to start proceedings at the subdistrict court.
That turned out to be successful. The court awarded a severance payment of €94,000.
Thanks to the dedication and excellent legal knowledge of vaststellingsovereenkomst.org, I achieved this great result. Kudos!

Very pleasant experience

Rachel Waki

We are an international company based in Amsterdam. We have engaged Vaststellingsovereenkomst.org as our regular legal counsel and legal assistance for business matters. They successfully concluded our first legal case immediately.
I have found the collaboration with the lawyers at Vaststellingsovereenkomst.org to be very pleasant. We complement each other well regarding key issues and evidence.
Rarely have I experienced such excellent legal service and attention. I would definitely recommend Vaststellingsovereenkomst.org in every respect; their rates are also very reasonable!

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Common mistakes in settlement agreements