SETTLEMENT AGREEMENT

Settlement agreement and outplacement budget

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In this blog, we explain what outplacement entails, how you can arrange a budget for it and why it may be in your best interest to close a settlement agreement

When concluding a settlement agreement, you can agree not only on compensation such as the transition allowance, but also on support in finding a new job. An outplacement budget can play an important role here. In this blog we explain what outplacement entails, how you can arrange a budget for this and why it can be in your interest.

What is outplacement?

Outplacement is a process in which you receive professional guidance to find a new job. This can include:

Coaching and career advice: To clarify what your possibilities and desires are.
Help with applying for a job: Think resume optimization, networking strategies and job interview training.
Training and courses: For strengthening your skills or retraining in another field.

Outplacement is often offered by specialized agencies and can significantly ease the transition to a new job.

Why include an outplacement budget in the settlement agreement?

An outplacement budget offers several advantages, both for you and for your employer:

For the employee: You receive professional support, allowing you to find a new job faster. This reduces the chance of long-term unemployment.
For the employer: By offering outplacement, the employer shows socially responsible employment practices. In addition, this can help reduce any conflicts during negotiations.

How do you arrange an outplacement budget?

When discussing the settlement agreement, you can include a specific budget for outplacement. This can be arranged in the following ways:

Separate compensation for outplacement
The employer makes an amount available that is paid directly to an outplacement agency. This is considered separate from the transition allowance.

Settlement with the transition allowance
Sometimes you can agree that part of the transitional compensation is used for outplacement. Make sure that you leave enough financial room.

Retraining or extra training
Outplacement budgets can also be used for education or training. This can be a good choice if you want to retrain in another profession or field.

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How high is an outplacement budget?

The amount of an outplacement budget depends on your situation and the available budget of the employer. Often it is between €1,500 and €5,000, but in some cases the amount can be higher or lower. It is wise to discuss and include this amount in the settlement agreement.

What should you pay attention to?

When including an outplacement budget in the settlement agreement, it is important to make clear agreements:

Who chooses the agency? Discuss whether you or the employer gets to choose the outplacement agency.
Is the budget discretionary? Check whether the amount is specifically intended for outplacement or whether you can also spend it on other things, such as training.
Duration of the process: Agree how long the process can last.

Need advice on an outplacement budget in a settlement agreement?

A settlement agreement can include many aspects, including an outplacement budget. It is important to make sure that all agreements are carefully recorded and fit your needs. Our team of employment lawyers can help you with this by reviewing the agreement and advising you on your options. This will ensure you will be optimally prepared for your next step. Contact us for tailored advice.

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