When your employer offers a settlement agreement (VSO) following a workplace dispute, one of the first questions you ask yourself is: what is this actually worth? The level of compensation is not fixed by law, but there are clear guidelines and factors that determine what is reasonable. In this article, you can read what to look out for and when there is room to negotiate.
What forms the basis of compensation in a settlement agreement?
In a standard dismissal procedure, you as an employee are in principle entitled to a statutory redundancy payment (transitievergoeding). This amount is calculated by law: for every year worked with the employer, you receive one third of a monthly salary. This also serves as the basis in a settlement agreement.
In a workplace dispute, however, there is often more to consider. The circumstances surrounding the dismissal play a role in determining what constitutes reasonable compensation. This includes questions such as who is responsible for the breakdown of the employment relationship, how long the dispute has been ongoing, and whether the employer has acted in a culpable manner.
The statutory redundancy payment as a starting point
The statutory redundancy payment is not always the final figure when negotiating a settlement agreement. Particularly in dispute situations, a higher level of compensation is regularly agreed upon. This can be achieved through two avenues:
- Fair compensation if the employer has acted in a seriously culpable manner, a higher level of compensation may be justified.
- Room for negotiation: employers are sometimes willing to pay more in order to avoid lengthy proceedings or further escalation.
- Additional arrangements: such as an extended notice period, retention of secondary employment benefits, or an outplacement budget.
- Legal costs contribution: in some cases, a contribution towards legal costs is included in the settlement agreement.
It is therefore wise not to focus solely on the final figure, but to consider the overall package set out in the agreement.
When can you claim more?
There are situations in which you as an employee have a stronger position when negotiating the level of compensation. A few examples:
- The employer fuelled the dispute or made insufficient effort to resolve it.
- There has been unacceptable behaviour, bullying, or discrimination in the workplace.
- You made every effort over a prolonged period to save the employment relationship, but the employer was uncooperative.
- Little or no attempt was made at reintegration where the dispute was accompanied by absence from work.
In such cases, the compensation may exceed the standard statutory redundancy payment. However, the reverse can also apply: if you as an employee bear some responsibility for the dispute, this can affect your negotiating position.
Arrange a no-obligation chat and discover how we can help you.
Plan a conversationWhat else does the settlement agreement contain besides the compensation?
A settlement agreement is about more than just a sum of money. It also contains other arrangements that can have significant financial or practical consequences. When assessing the settlement agreement, always pay attention to:
- The end date of the employment and whether the notice period has been correctly applied.
- The wording of the reason for dismissal, which affects your entitlement to unemployment benefit.
- Any confidentiality or non-compete clauses.
- Whether holiday entitlement will be paid out and how any bonus will be treated.
- Arrangements regarding a reference or certificate of employment.
All of these elements form part of the overall picture and can in practice be just as valuable as the level of compensation itself.
The cooling-off period and the importance of taking advice
Once you have signed a settlement agreement, you have a statutory fourteen-day cooling-off period in which you can reconsider your decision. Even better, however, is to be well informed before signing. A settlement agreement is binding and the consequences are significant, particularly in a workplace dispute where emotions can run high.
It is therefore always advisable to seek guidance from a professional before you sign. This way, you will know whether the compensation on offer is realistic and whether there is scope for a better deal. You can read more about your rights and how to approach a dispute situation on the page Settlement Agreement in a Dispute: Your Rights and Approach.
Why Labour Lawyer Eindhoven
At Arbeidsjurist Eindhoven, we help employees in the Eindhoven and Brabant region to assess and negotiate settlement agreements. We look not only at the level of compensation, but at the complete picture: your legal position, your entitlement to unemployment benefit, and what is fair given the circumstances of your particular dispute.
Would you like to know whether the settlement agreement you have received is fair? Get in touch with us for a no-obligation consultation. We are happy to think things through with you.
Frequently asked questions
Am I always entitled to the statutory redundancy payment in a settlement agreement?
Not necessarily. The statutory redundancy payment is legally required in a dismissal procedure via the UWV or the subdistrict court. A settlement agreement involves free negotiation, but in practice the statutory redundancy payment is often used as a minimum. You have no automatic legal entitlement, but a lower amount is in most cases unreasonable and open to challenge.
Can I receive more than the statutory redundancy payment in a workplace dispute?
Yes, that is certainly possible. If the employer bears significant responsibility for the dispute, or if culpable conduct on their part can be demonstrated, there is often room to negotiate a higher level of compensation. An employment law specialist can assess how strong your position is.
What if I have already signed the settlement agreement but have doubts about the compensation?
After signing, you have a fourteen-day cooling-off period. Within that period, you can dissolve the agreement in writing without giving a reason. After that period, doing so becomes considerably more difficult. If in doubt, consult an employment law specialist without delay.
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.
