Have you had several successive contracts with the same employer and are you now receiving a Settlement agreementIf so, your situation is considerably more complex than that of someone with a single continuous contract. Your contract history has a direct bearing on your rights, your compensation and your entitlement to unemployment benefit. In this article, you can read what to look out for.
What the chain rule means for your settlement agreement
If you've had several fixed-term contracts with the same employer, the first question is: do those contracts legally constitute a chain? This is governed by the chain rule (Section 7:668a of the Dutch Civil Code). Since 1 January 2020, a fixed-term contract automatically converts to a permanent contract if you've had more than three successive fixed-term contracts, or if you've worked on multiple fixed-term contracts with the same employer for more than three years. For this to apply, the gap between contracts must be no more than six months.
Why does this matter for a settlement agreement? If your chain of contracts should already have led to a permanent contract but your employer ignored this, you are in a stronger negotiating position than you might think. It is always advisable to have this assessed before you sign anything.
How previous contracts count towards redundancy pay
A settlement agreement typically includes a redundancy payment. The amount depends on your monthly salary and the total length of your employment. A misconception that employers sometimes rely on is to use only the most recent contract as the starting point. This is legally incorrect where earlier contracts form part of the same chain.
The general rule is: contracts that follow one another with a gap of no more than six months together count as one continuous period of employment. The gaps themselves do not count towards the calculation. In practical terms, this means: if you had three one-year contracts each separated by a four-month gap, your total length of service would be three years, not one. The statutory accrual rate is one third of a monthly salary for each full year of service. In 2026, the maximum redundancy payment is €102,000 gross, or one gross annual salary if that figure is higher.
Successive employment and what it changes
Sometimes you may not only have had multiple contracts with one employer but, for example, may have worked initially through a temp agency or payroll company before being taken on directly. In that case, there may be successive employment. This means that the period with the previous employer can also count towards your redundancy payment and notice period, provided you continued doing comparable work and the break was no longer than six months.
This is a point that is regularly overlooked in settlement agreement negotiations, yet it can substantially affect your compensation.
Unemployment benefit rights under a settlement agreement involving multiple contracts
To be eligible for unemployment benefit after signing a settlement agreement, the agreement must satisfy a number of conditions. The initiative for dismissal must lie with the employer, there must be no urgent reason for dismissal, and the notice period must have been correctly observed or compensated. Where a chain of contracts is involved, it is particularly important that the end date in the settlement agreement aligns with the notional notice period corresponding to the total length of employment — not just the most recent contract.
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Plan a conversationIf the notice period is incorrect, the UWV may temporarily refuse or delay payment of unemployment benefit. This is something you absolutely want to avoid.
Practical points to consider when you receive a settlement agreement
Have you received a settlement agreement after having had multiple contracts? Pay attention to the following:
- Please provide me with the contracts you would like me to list. I need the information about start and end dates, and the type of contract for each period to fulfil your request.
- Check whether your employer has calculated your length of service correctly — using only the most recent contract as the basis is almost always wrong.
- Ascertain whether the chain of employment should have already led to a permanent contract. If so, your negotiating position is stronger.
- Consider whether successive employment applies, particularly if you ever worked through a temp agency or payroll arrangement.
- Check the notional notice period: it must correspond to your total length of employment, not to the shortest contract.
- Ensure the settlement agreement contains the correct wording that protects your unemployment benefit entitlement, including reference to employer initiative and the absence of an urgent reason for dismissal.
- Take advantage of the fourteen-day cooling-off period after signing if something turns out to be incorrect.
When a break breaks the chain
A break of more than six months severs the contractual chain. This means that earlier contracts no longer count towards your length of service, and a new reckoning begins. If you have previously had a longer period during which you did not work for the same employer, the question arises as to which contracts are still relevant to your settlement agreement. This is not always straightforward and depends on the exact dates, the length of the break, and sometimes also on collective agreement provisions that permit different time limits.
It is therefore sensible to draw up a timeline of all your working periods and have it assessed by an employment law specialist before signing a settlement agreement.
Why Labour Lawyer Eindhoven
At Arbeidsjurist Eindhoven, we understand the local labour market and assist employees in Eindhoven and the Brabant region with precisely these kinds of complex situations. A settlement agreement with multiple contracts in the background requires a bespoke approach: which contracts are relevant, is the compensation correct, and will you be protected when claiming unemployment benefit? We will clarify all of this for you, clearly and without legal jargon. Get in touch for a no-obligation consultation – we would be happy to review your situation together.
Frequently asked questions
Do all my previous fixed-term contracts count towards the redundancy payment in my settlement agreement?
That depends on the gaps between them. Contracts that succeed one another with a maximum gap of six months together form one chain and jointly count as length of service. Gaps of more than six months break the chain. It is advisable to list all your contract dates and have them assessed by an employment law specialist.
In the UK, your employer generally uses your most recent contract to calculate redundancy pay. This is because it typically outlines your terms and conditions of employment, including any provisions for redundancy. However, it's important to consider the following: Statutory Redundancy Pay: This is a legal minimum set by the government. It's calculated based on your age, length of service, and weekly pay. For this calculation, your most recent contract's salary is usually what's used to determine your "weekly pay" up to the statutory limit. Contractual Redundancy Pay: Your employment contract might offer terms that are more generous than the statutory minimum. This would also be based on the terms in your most recent contract. Settlement Agreement: A settlement agreement is a legal document that outlines an agreement between you and your employer, often to settle certain claims you might have in exchange for a payment. While your employer will use your most recent contract as the basis for the calculation, the settlement agreement can also specify the exact amount of redundancy pay, which *could* be different from a strict calculation based on the contract if both parties agree to it. Key Considerations for You: 1. Review Your Contracts: Carefully review all your employment contracts. If there have been amendments, ensure the most recent one is the one being used for calculations. 2. Understand the Basis of Calculation: Clarify with your employer exactly how they arrived at the redundancy payment figure. Ask them to show you the calculations based on your most recent contract and explain any differences from the statutory minimum or what you might have expected. 3. Seek Legal Advice: It is highly recommended that you seek independent legal advice from a solicitor specialising in employment law before signing any settlement agreement. They can: Review your contracts and the settlement agreement. Advise you on whether the redundancy pay calculation is correct and fair. Negotiate on your behalf if you believe the offer is insufficient. Explain all the terms and implications of signing the agreement, including any rights you might be giving up. In summary, whilst the most recent contract is the usual basis, it's crucial to understand the specifics of the calculation and to get professional advice to ensure you are receiving what you are entitled to.
In that case, the calculation is likely to be too low. If earlier contracts form part of the same chain, the total length of service must be used as the starting point. You can request and check the calculation breakdown. If the amount is incorrect, you can negotiate before signing.
Can I claim unemployment benefit as normal after a settlement agreement involving multiple contracts?
Yes, as long as the settlement agreement meets the legal requirements. The dismissal must be at the employer's initiative, there must be no urgent reason for dismissal, and the notional notice period must match the total duration of employment. This period is longer if you have had multiple contracts. If this is not correctly stated in the settlement agreement, the UWV may temporarily refuse or delay unemployment benefits.
What is successive employment and why is it relevant to my settlement agreement?
Successive employment applies when you performed comparable work first for another employer — for example a temp agency or payroll company — and were subsequently taken on directly. That earlier period can then count towards the calculation of your redundancy payment and notice period, provided the break was no longer than six months.
With multiple fixed-term contracts, might I already be entitled to a permanent contract?
Possibly. If you have had more than three successive fixed-term contracts, or have been employed by the same employer on fixed-term contracts for more than three years, the chain rule (Section 7:668a of the Dutch Civil Code) may already have given rise to a permanent contract. This puts you in a stronger position when negotiating a settlement agreement. Always have this checked before you sign.
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.
