Are you unwell and has your employer offered you a settlement agreement? Then it is important to understand your legal position before you sign anything. In Eindhoven and the wider Brabant region we see this situation arise regularly, and the consequences of making the wrong decision can be significant — particularly when it comes to your right to benefits or your redundancy payment.
What the ban on dismissal during illness means for you
Once you are ill, a statutory prohibition on dismissal applies. During the first two years of illness your employer cannot, in principle, unilaterally terminate your employment contract. This period of protection runs from your first day of sick leave and places you as an employee in a strong position. If you nonetheless sign a settlement agreement (VSO), you do so of your own accord — and that has consequences.
There are a few exceptions to this prohibition on dismissal. These include situations where an application for dismissal had already been submitted to the UWV before your first sick-leave notification, where a business is being wound up, or where summary dismissal occurs due to an urgent reason. Outside those exceptions, you as a sick employee are in a strong legal position.
Risk to your unemployment or sickness benefit
Signing a settlement agreement while you have not yet recovered can jeopardise your entitlement to benefits. The UWV assesses whether you, as a sick employee, are available for the labour market – a requirement for unemployment benefit (WW). If you are not, because your recovery is expected to take too long, the UWV may refuse the WW benefit. The same applies to sickness benefit under the Ziektewet: by voluntarily agreeing to leave, you are forfeiting the very protection the law affords you.
If you expect to make a recovery within the foreseeable future and are indeed available for the labour market, a settlement agreement might be worth discussing under certain conditions. Even so, having the agreement reviewed by a legal professional is indispensable before you sign.
Offered a settlement agreement after two years of illness
Once the two-year period has elapsed, the prohibition on dismissal lapses. Your employer may then apply to the UWV for a dismissal permit, or offer you a settlement agreement. In the latter case you are entitled to a statutory redundancy payment (transitievergoeding). The accrual of that payment ceases, in principle, on the day you have been ill for two years – this follows from the Xella ruling of the Supreme Court. Always have the calculation checked; employers sometimes propose a figure that is too low.
Please be aware that if the UWV has imposed a wage payment sanction on your employer for insufficient reintegration efforts, the period of continued wage payment may be extended by up to one year. The dismissal protection runs concurrently. This could affect the end date of your employment and, consequently, the amount of your redundancy pay.
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Plan a conversationThe statutory maximum redundancy payment from 1 January 2026 is €102,000 gross. If your annual salary is higher, that salary serves as the maximum. Through a settlement agreement it is sometimes possible to negotiate a higher payment than the statutory redundancy payment alone.
A particular situation: illness and pregnancy
If you are both ill and pregnant, the protective regimes stack on top of one another. Pregnancy carries its own prohibition on dismissal, which continues until six weeks after the end of maternity leave. Periods of incapacity due to pregnancy or maternity leave are moreover not counted towards the two-year illness period — the end date of the prohibition on dismissal may therefore fall later than you expect. This potentially strengthens your negotiating position in relation to a settlement agreement, but it also increases the risk if you sign too quickly.
Sick pay scheme for employers in cases of long-term illness
Many employees are unaware that there is also a financial incentive for their employer. Employers can reclaim the redundancy payment made after two years of illness from the UWV through the compensation scheme. This makes it less burdensome for your employer to pay you the full redundancy payment. Feel free to use this fact as a negotiating argument.
Practical tips before you sign
- Never sign a settlement agreement on the same day you receive it; you are entitled to a period for reflection, and it is advisable to make use of it.
- Please check whether the redundancy payment has been calculated correctly, including any variable pay components.
- Always ask what the end date of your employment contract is and whether it is reasonable in relation to the notice period.
- Have the settlement agreement reviewed by an employment lawyer before you put your signature to it — in virtually all cases this is free of charge or is reimbursed by the employer.
- Check with the UWV whether, upon signing, you retain entitlement to sickness benefit or unemployment benefit, depending on your prognosis for recovery.
- Check whether a wage-payment sanction is in place, as this may alter the point at which the prohibition on dismissal ends.
- If you are dissatisfied with the compensation offered, always ask for room to negotiate — the law places you as a sick employee in a strong position.
Why Labour Lawyer Eindhoven
At Arbeidsjurist Eindhoven, we understand that a settlement agreement during illness is not only legally complex, but can also be emotionally demanding. We know the local labour market in Eindhoven and the Brabant region and are happy to help you think things through – without legal jargon. Whether you are unsure whether to sign, want to know if the payment is correct, or wish to negotiate better terms: we are here for you. You can also find comprehensive information on our Settlement Agreement page, or contact us without obligation for an initial conversation.
Frequently asked questions
Yes, your employer is generally allowed to offer you a settlement agreement even if you are ill.
Yes, they are. An employer may always offer a settlement agreement, even during illness. However, you are under no obligation to sign. During the first two years of illness, a prohibition on dismissal applies, which means your employer cannot unilaterally end the employment relationship. This gives you a strong negotiating position. Always have the agreement reviewed by an employment lawyer before you sign.
Will I lose my unemployment benefit if I sign a settlement agreement whilst I am ill?
That risk certainly exists. The UWV assesses whether you are available for the labour market, which is a condition for unemployment benefit (WW). If you are still seriously ill and unavailable, the UWV may refuse the WW benefit. The same applies to sickness benefit under the Ziektewet. Whether signing is sensible depends on your prognosis for recovery and the content of the settlement agreement. Seek legal advice beforehand.
Am I entitled to a redundancy payment under a settlement agreement after two years of illness?
Yes. After two years of illness the prohibition on dismissal lapses and upon termination of employment you are entitled to a redundancy payment. Accrual ceases in principle at the point you have been ill for two years. Always check whether the amount offered has been calculated correctly. The maximum redundancy payment in 2026 is €102,000 gross.
What changes if I am both ill and pregnant?
When illness and pregnancy coincide, multiple sets of protective rules apply simultaneously. Periods of incapacity due to pregnancy or maternity leave do not count towards the two-year illness period. Furthermore, the prohibition on dismissal in cases of pregnancy continues until six weeks after the end of maternity leave. This makes your situation legally more complex and, generally speaking, stronger. Always have your individual circumstances assessed.
Yes, you can negotiate a higher payment in a settlement agreement whilst unwell.
Yes, absolutely. The statutory redundancy pay is a minimum threshold. A settlement agreement provides scope to negotiate more, for example a higher severance payment, an outplacement allowance, or a longer notice period. As a sick employee, you are in a strong legal position because your employer cannot unilaterally override the prohibition on dismissal. An employment lawyer can negotiate on your behalf and ensure that you reach a fair departure agreement.
We're happy to help you brainstorm ideas. For advice tailored to your specific situation, we'd be happy to sit down with you. No rights can be derived from the content of this page and it may contain inaccuracies.
