Termination by mutual consent: what do you need to know?

Dismissal is never easy, but a settlement agreement can offer a solution. How does this work exactly, what should you pay attention to and what does it mean for your unemployment benefit? Read on and discover everything about dismissal by mutual consent.

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What is a settlement agreement?

A settlement agreement, also known as a termination agreement, is a legal document in which you and your employer record agreements about terminating your employment contract. This is done on the basis of mutual consent, which means that legal proceedings at the subdistrict court are not necessary.

This agreement includes, among other things:

• The end date of your employment.
• The amount of the severance payment.
• Agreements on exemption from work and on the final settlement

This form of dismissal is often faster and less conflictual, but it does require careful coordination.

What should you pay attention to in a settlement agreement?

While a settlement agreement can be beneficial because you can establish agreements on many topics, it's important to be critical. Pay attention to the following points: and always have the agreement checked by a lawyerdish specialist: 

1. Right to unemployment benefits
Check whether the agreement explicitly states that the initiative for the dismissal lies with the employer and that there is no question of culpable behavior. This is essential to qualify for unemployment benefits.

2. Severance pay
Although this is not required by law, in practice, in the event of dismissal by mutual consent, there will be a severance payment of at least the transition payment. You can have the offered compensation checked by us, so that we can determine whether the amount offered is reasonable in your situation. We can also negotiate this on your behalf.

3. Effective Date
The end date of your contract must correspond to the first day on which you are entitled to unemployment benefits. This is often the day after the end of the notice period that your employer would normally have.

4. Other agreements
Also look at agreements about:

• Outstanding vacation days.
• Any training opportunities.
• Non-competition clause: will it be (partially) withdrawn?

Settlement agreement and your unemployment benefit

If you have carefully drafted the settlement agreement, this will usually not have any negative consequences for your unemployment benefits. Please note the following:

1. No blameworthiness
For your right to unemployment benefits it is important that you have not been dismissed because you have done something wrong. The reason for dismissal must be neutral. Examples of this are a difference of opinion between parties or business economic reasons. This must be clearly stated in the agreement.

2. End of your employment contract
The notice period must be used correctly. If the employment contract ends earlier than the statutory notice period for the employer, this may mean that you are only entitled to unemployment benefits later.

3. UWV checks
In order to qualify for WW, the UWV will review the settlement agreement. Make sure it is complete and correctly drawn up to prevent problems.

What does De Unie for you?

At De Unie we understand how complex and sometimes emotional a dismissal by mutual consent can be. Our legal specialists will help you:

• To legally check the settlement agreement.
• Negotiate better terms.
• To secure unemployment benefits.

Do you have any doubts or questions? Please contact us via our Service Center. Call us on weekdays between 8:30 and 17:00 on 0345 851 963 or send an e-mail to sc@unie.nl. You can also contact us for direct assistance.

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