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Settlement agreement, transition allowance, dismissal

What is a termination agreement?

What is a termination agreement?

A termination agreement contains the arrangements by which an employer and employee terminate the employment relationship by mutual agreement.

Termination by mutual agreement

A termination agreement is a written agreement in which the employer and employee mutually agree to terminate the employment contract. This eliminates the need for a dismissal procedure involving UWV or the sub-district court.

The employee is not required to agree immediately. The content specifies, among other things, the end date, the financial settlement, and the consequences for any potential unemployment benefits.

Main explanation

Brief explanation

The employer and employee agree on the dismissal and the terms and conditions.

Only sign once the agreements are complete, clear, and legally sound.

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Difference from a settlement agreement

In the context of dismissal, both terms are often used for the same document. However, they carry a different legal emphasis.

Termination agreement

Emphasizes the objective: the employer and employee are terminating the employment contract by mutual consent.

Settlement agreement

The broader legal term for agreements used by parties to resolve uncertainty or a dispute. In the case of dismissal, this usually refers to the termination agreement as well.

What is a VSO?

What does a termination agreement contain?

The exact content varies depending on the situation. The arrangements below should, at the very least, be considered deliberately.

  • The reason for the termination
  • The correct end date and notice period
  • Severance pay and other payments
  • Release from work duties and holiday entitlement
  • Non-competition and non-solicitation clauses
  • Certificate of employment, company property, and final discharge

The title is not decisive

A document might also be called a “settlement agreement,” “dismissal agreement,” or “dismissal by mutual consent.” Always look at the full content and consequences.

Key components

Consequences for unemployment benefits (WW)

A termination agreement does not automatically entitle you to unemployment benefits. The text must clearly state that the initiative came from the employer, that there was no urgent cause for dismissal, and that the employee is not at fault.

The statutory notice period and the chosen end date are also important. Ultimately, UWV assesses eligibility for benefits.

WW and settlement agreements

Check before signing

  • Initiated by the employer
  • No urgent cause or culpable conduct
  • Correct statutory notice period
  • Clear and neutral reason for dismissal
  • Agreements that reflect the actual situation
Notice periods

Should you sign the agreement?

No. A termination agreement is based on mutual consent. You may reject a proposal or negotiate better terms.

After signing, a statutory cooling-off period of fourteen days normally applies to the employee. If this cooling-off period is not stated in writing, it can be extended to 21 days.

Cooling-off period

Leave room for negotiation

Don't just check the severance pay. The end date, release from work duties, holiday entitlement, bonuses, legal costs, and restrictive covenants can also have significant financial implications.

View checklist

What should you do after receiving it?

1. Don't sign yet

Take your time and don't let yourself be pressured.

2. Check all the consequences

Assess unemployment benefits, the end date, compensation, and restrictive clauses.

3. Negotiate and document

Ensure necessary changes are included before signing.

View example

An example shows the topics often included in a termination agreement. Use a template only as a starting point: the exact wording and terms depend on the specific circumstances of the dismissal.

View example

Note

Do not copy a sample verbatim, and do not sign a proposal from the employer without reviewing its content.

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:

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Frequently asked questions

What is a termination agreement?

A written agreement in which the employer and employee agree that the employment contract will end and specify the conditions under which this will happen.

Is a termination agreement the same as a settlement agreement?

In the context of dismissal, the terms are usually used to refer to the same document. "Settlement agreement" is the broader legal term.

Do I have to sign a termination agreement?

No. The agreement is only concluded if both parties consent. You are free to refuse or negotiate.

Do I have a cooling-off period after signing?

The employee is generally entitled to a statutory cooling-off period of fourteen days. If this right is not stated in writing, the period may be 21 days.

Do I retain my right to unemployment benefits (WW)?

That is not automatically guaranteed. Factors such as the reason for dismissal, who initiated it, culpability, the end date, and the notice period are important. The UWV makes the final decision.

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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