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Termination of employment due to a settlement agreement

What is a settlement agreement?

A settlement agreement is also referred to as a termination agreement or abbreviated to 'VSO'. It is a legal document in which agreements are made between an employer and an employee about the termination of your employment contract. You are not obliged to enter into a settlement agreement. Your employment will be terminated by mutual consent when you and your employer have signed the settlement agreement.

Can you still get unemployment benefit?

Do you lose your entitlement to unemployment benefit if you sign? This is not the case if the following matters are included in the settlement agreement:

  • Employer takes the initiative to terminate employment;
  • Employee is not culpable;
  • There is no urgent reason;
  • There is no other suitable position;
  • A neutral reason for the termination of the employment contract (for example, economic reasons or difference of opinion).

You are not entitled to severance pay, but you may receive it!

In certain situations, the law provides that you can claim a transition payment. A termination by means of a settlement agreement is not part of this. You are therefore not entitled to this. However, this does not mean that you will not receive severance pay. Because otherwise why would you agree to the settlement agreement? Whether you will receive compensation and how much it is, strongly depends on the situation. Therefore, please contact us if you are faced with a settlement agreement. Then we will advise you further.

The amount of the severance payment

Transition fee

This is a compensation that is regulated by law. A severance payment equal to the transition payment may be included in a settlement agreement, but may also be higher or lower. The amount of the transition payment depends on:

  • the duration of the employment (minimum 2 years to be eligible for the compensation);
  • age;
  • income.

Collective Labor Agreement & Social Plan

Does a collective labor agreement or social plan apply to you? If your employer offers you a settlement agreement for a reorganization, it is possible that your employer calculates the compensation according to the formula from the Social Plan. Do you have any questions about this? We can calculate the amount of your compensation for you on the basis of a Social Plan.

Are you ill?

It is not advisable to sign a settlement agreement if you are ill. Are you doing this right? Then you may lose your entitlement to unemployment benefits and sickness benefits.

Signed, but do you regret this?

Fortunately, the law provides a safety net for these types of situations. The settlement agreement should state that you have a reflection period of 14 days. If there is nothing about a reflection period in the agreement, the reflection period is 3 weeks.

Have you received a settlement agreement?

We can test the settlement agreement for you. Or do you have other questions? Then contact us. We are happy to advise you further. We can be reached by phone on 0345-851963, but you can also email us via