Page - FAQ
1. What is a settlement agreement (vaststellingsovereenkomst)?
A settlement agreement is a legally binding contract between an employer and an employee to terminate the employment relationship by mutual consent. It outlines the terms of the exit, such as the termination date, severance pay, and exemption from work, preventing the need for a court procedure or UWV permit.
2. Am I obligated to sign a settlement agreement?
No, you are never legally obliged to sign. Signing is voluntary. If you do not sign, your employment contract simply continues, unless your employer has valid grounds to fire you through the court or UWV. Always consult a legal expert before signing.
3. Why is my employer offering me a settlement agreement?
Employers typically offer this to avoid the lengthy, costly, and uncertain process of requesting a dismissal permit from the UWV or the sub-district court. It allows for a faster and more amicable separation.
4. Can I negotiate the terms of the agreement?
Yes, almost all settlement agreements are negotiable. The first draft is merely an opening offer. You can negotiate the severance amount, the notice period, legal fees, and post-contractual clauses.
5. Do I need a lawyer to review my settlement agreement?
Yes, it is highly recommended. Dutch dismissal law is complex, especially regarding unemployment benefit rights (WW). A specialized employment lawyer ensures your rights to benefits are protected and that you receive the maximum compensation.
6. Does signing a settlement agreement mean I was fired for bad performance?
No, not necessarily. A settlement agreement is a neutral way to end employment. It does not imply guilt or dysfunction unless specifically stated. We ensure the text confirms there is no “urgent cause” for dismissal.
7. Will I still get unemployment benefits (WW) if I sign?
Yes, provided the agreement is drafted correctly. The contract must state that the initiative for termination came from the employer and that there is no “urgent cause” (such as theft or fraud).
8. What happens if the notice period is not respected in the agreement?
If the proper notice period is not observed, the UWV will enforce a waiting period before your unemployment benefits start. We ensure the termination date aligns with the statutory notice period so you have no gap in income.
9. Can I receive WW benefits if I agree to the dismissal?
Yes. Under Dutch law, agreeing to a mutual termination (via a settlement agreement) does not disqualify you from unemployment benefits, unlike in some other countries where “quitting” or “agreeing” disqualifies you.
10. What is the "fictive notice period"?
This is the period that the UWV considers you should have still been employed. If your settlement agreement ends your contract sooner than this period, you will not receive benefits immediately.
11. What is a transition payment (transitievergoeding)?
The transition payment is the statutory minimum severance pay an employee is entitled to upon dismissal. It is roughly equal to 1/3 of your monthly salary for every year of service, from the first day of employment.
12. Is the severance pay in a settlement agreement the same as the transition payment?
Often it is higher. Since the employer avoids court costs and risks, we can usually negotiate a severance package that exceeds the statutory transition payment.
13. How is the severance payment taxed in the Netherlands?
Severance pay is considered income from previous employment and is taxed at the special rate for strict remuneration (Box 1). You do not pay social security premiums on it, but you do pay income tax.
14. Can I use the legal budget for something other than a lawyer?
Usually, the legal budget offered by the employer is specifically for legal assistance. However, sometimes budgets for outplacement or schooling can be negotiated separately.
15. What is the "Bill of Final Discharge" (finale kwijting)?
This clause means that after the execution of the agreement, neither party has any further claims against the other. It is crucial to ensure all outstanding payments (holiday pay, bonuses) are settled before agreeing to this.
16. Will I get paid for my unused holiday days?
Yes. Usually, outstanding holiday days are paid out with the final salary payment. Alternatively, you might agree to use them up during a garden leave period.
17. What happens to my year-end bonus or 13th month?
These should be paid out pro-rata up to the termination date. We check your contract to ensure these are not forgotten in the final settlement.
18. What happens to my 30% ruling if I lose my job?
Your 30% ruling ends on the final day of your employment. However, if you find a new job within three months that meets the income requirements, you can transfer the ruling to your new employer.
19. Does the severance pay count towards the 30% ruling income threshold?
No. Severance payments do not count towards meeting the income requirement for the 30% ruling. This is a critical pitfall for expats.
20. Will I lose my Highly Skilled Migrant visa immediately?
No. You generally have a “search period” of three months after your employment ends to find a new job as a Highly Skilled Migrant. This period usually starts on your actual termination date.
21. Can I travel abroad after signing the agreement?
Yes. Once you are exempted from work (garden leave), you can travel. However, once your unemployment benefits (WW) start, you must be available for the Dutch labor market and need permission from the UWV to go on holiday.
22. Does a settlement agreement affect my application for permanent residency?
It can. To apply for permanent residency, you often need a valid contract at the time of application. Being unemployed or on a short-term interim contract might delay your eligibility.
23. Can I take my pension with me if I leave the Netherlands?
Yes. You retain your accrued pension rights. Depending on the fund and the country you move to, you might be able to transfer the value or simply receive payouts when you reach retirement age.
24. What is the reflection period (bedenktijd)?
By law, you have a 14-day reflection period after signing the settlement agreement. Within this time, you can withdraw your consent without giving a reason.
25. What is "Garden Leave" (vrijstelling van werk)?
Garden leave means you remain employed and paid until the termination date, but you are not required to work. This allows you time to find a new job.
26. Can I start a new job while on garden leave?
Yes, usually. However, we must include a clause allowing this. Often, income from the new job might be deducted from your salary during the garden leave, but this is negotiable.
27. What happens to my non-competition clause?
We typically negotiate that the non-competition clause is waived entirely in the settlement agreement, giving you the freedom to work for any employer.
28. Who pays for the legal costs?
The employer almost always pays. It is standard practice for the employer to offer a budget to cover your legal fees. At settlement-agreement.nl, we work within this budget so there is no cost to you.
29. What happens to company property (laptop, phone, car)?
You usually have to return these on the last day of work. However, we can sometimes negotiate for you to keep the phone or laptop, or purchase them at a reduced book value.
30. How long does the negotiation process take?
On average, finalizing a settlement agreement takes between 1 and 3 weeks, depending on the complexity and how willing the employer is to negotiate.
31. Do I have to go to court?
No. A settlement agreement is specifically designed to stay out of court. It is a private contract.
32. Can I sign a settlement agreement while I am sick (burnout/illness)?
Be very careful. If you sign while sick, you may be denied sickness benefits (Ziektewet) and unemployment benefits (WW). Never sign during illness without specialized legal advice.
33. What is the "prohibition of termination" during illness?
Employers cannot unilaterally fire employees during the first two years of illness. A settlement agreement bypasses this protection, which carries significant financial risks for the employee.
34. Does the employer have to help with outplacement?
It is not mandatory by law, but an outplacement budget is a common negotiating point in settlement agreements to help you find a new role.
35. Can a pregnant woman sign a settlement agreement?
Yes, but similar to illness, the prohibition of termination applies. Signing it might affect maternity benefits. Legal advice is essential here.
36. Why should I choose the lawyers at Settlement-Agreement.nl?
We are fully specialized in dismissal law and settlement agreements. Unlike general practitioners, we deal with this every single day. We know exactly what the maximum achievable result is for your specific situation.
37. Do you have experience with Expats?
Yes, extensive experience. We understand the specific challenges expats face, such as the 30% ruling, HSM visa requirements, and the complexity of international tax treaties. We have helped hundreds of expats navigate Dutch dismissal law.
38. How much experience do your jurists have?
All our leading jurists have more than 20 years of experience in Dutch employment law. You are not dealing with juniors, but with seasoned negotiators who know every trick in the book.
39. Is the first advice really free?
Yes, absolutely. You can upload your agreement or call us for a free initial assessment. We will tell you immediately if your agreement is safe to sign or if there is room for improvement (which there usually is).
40. What if my employer refuses to pay the legal fees?
In the rare case an employer refuses, we will discuss this with you upfront. However, in our experience, we almost always negotiate that the employer covers our invoice as part of the final deal.
41. Do I have to visit your office in person?
No. We work entirely digitally and by phone/video call. We assist expats all over the Netherlands and even those who have already returned abroad.
42. Can you help if I don't speak Dutch?
Yes. All our communications and advice can be provided in English. We can also provide a certified translation of the settlement agreement if you wish (though the legal binding version is usually Dutch).
43. What is your success rate?
We successfully improve the terms of the settlement agreement for our clients in over 95% of cases. Whether it’s a higher severance, a better reference, or securing WW rights.
44. How fast can you help me?
We understand that time is of the essence. If you contact us today, you will receive an initial assessment within 24 hours (on business days).
45. What is the next step I should take?
Don’t sign anything yet. Upload your settlement agreement on our website or call us directly. Let our experts check it for free to ensure your financial future and residence rights are secure.