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Settlement agreement, transition allowance, dismissal

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Dismissal and settlement agreements: what should you do?

Dismissal can be unexpected. Identify the ground relied upon, the applicable procedure and what you should check before agreeing to any proposal.

Facing dismissal can be unexpected

An employer cannot terminate an employment contract without a legally valid ground. The ground relied upon determines the requirements and whether the route involves UWV, the subdistrict court or negotiations about a settlement agreement.

Do not sign a proposal immediately. First check the stated reason, the supporting evidence, your position regarding Dutch unemployment benefits (WW), the termination date, compensation and any restrictive clauses.

UWVeconomic grounds or long-term incapacity for work
Courtemployee-related grounds for dismissal
VSOtermination by mutual consent
Discussing dismissal and a settlement agreement

Which dismissal route is your employer using?

UWV: primarily for dismissal on economic grounds and dismissal after long-term incapacity for work.

Subdistrict court: for example, in cases of underperformance, culpable conduct or a seriously and lastingly disrupted employment relationship.

Mutual consent: employer and employee record their agreement in a settlement agreement. The proposed terms remain negotiable.

The main grounds for dismissal

Common grounds include economic circumstances, restructuring, underperformance, a disrupted employment relationship and culpable conduct. Summary dismissal may be considered only in sufficiently serious and urgent circumstances.

The type of contract, the sector and special circumstances may also affect your legal position. Use the detailed page that corresponds to the reason or situation stated by your employer.

The requirements differ for each ground

Merely naming a ground is not enough. In an underperformance case, the employee must generally have been given a genuine opportunity to improve. In an economic dismissal, matters such as business necessity, the statutory selection order and redeployment are relevant. Where the employment relationship is disrupted, serious restoration efforts will usually be expected.

A settlement agreement avoids a formal dismissal procedure, but it does not make these substantive issues irrelevant. They often determine the employee’s negotiating position.

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:

Have you received a dismissal proposal?

Have the dismissal ground, proposed terms and consequences reviewed before signing. This helps prevent unnecessary loss of rights, compensation or entitlement to WW benefits.

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