The Notional Notice Period in Settlement Agreements and Universal Credit in Eindhoven Explained

Notional notice period in a settlement agreement

You have received a settlement agreement and expect your unemployment benefit (WW) to commence immediately after your last working day. However, UWV may delay your benefit if the end date in the settlement agreement does not properly align with the applicable notice period. This is precisely where the notional notice period comes in: a technical concept with significant financial consequences for you as an employee in Eindhoven.

What the notional notice period means exactly

When an employment contract is terminated by mutual consent, it is not formally terminated by notice, but ended by means of a settlement agreement. Nevertheless, when assessing your unemployment benefit (WW) application, UWV treats the situation as though a regular notice of termination had taken place. UWV applies the notice period that your employer would have been required to observe under a standard termination pursuant to Article 7:672 of the Dutch Civil Code. This is the notional notice period. settlement agreementIn practice: UWV regards the moment the settlement agreement is signed as the notional moment of notice. It then adds the statutory notice period applicable to your employer. The result is the earliest date on which your unemployment benefit (WW) can commence. If the agreed end date in the settlement agreement falls before that calculated date, UWV imposes a waiting period on you. During that waiting period you no longer receive a salary and are not yet receiving unemployment benefit (WW), resulting in an unexpected gap in your income.

Concreet: het UWV beschouwt het moment van ondertekening van de VSO als het fictieve moment van opzegging. Vervolgens telt het de wettelijke opzegtermijn voor jouw werkgever daarbij op. De uitkomst is de datum waarop je WW-uitkering vroegst kan ingaan. Als de afgesproken einddatum in de VSO vóór die berekende datum ligt, legt het UWV je een wachttijd op. Gedurende die wachttijd heb je geen salaris meer én nog geen WW, wat een onverwacht inkomensgat oplevert.

How the employer's notice period is calculated

The statutory notice period for the employer (Article 7:672(2) of the Dutch Civil Code) depends on the length of the employment and increases the longer you have been employed. For employment of up to five years, one month's notice generally applies; for five to ten years, two months; for ten to fifteen years, three months; and for fifteen years or more, four months. The notice period begins to run from the end of the calendar month.

Please note: your employment contract or applicable collective labour agreement (CAO) may stipulate a different notice period. The UWV always takes into account the notice period that actually applies, not automatically the shortest statutory version. Always check your own contract and any applicable CAO before agreeing to the end date in the settlement agreement.

A practical calculation example

Suppose you sign a settlement agreement on 1 April, you have worked for the same employer for eight years, and the agreed end date is 1 May. The statutory notice period for your employer is two months. The UWV calculates as though notice was given on 1 April (end of the month: the deemed notice date) and adds two months to that. Your unemployment benefit (WW) will therefore not commence until 1 July. Between 1 May (end of employment) and 1 July (start of WW) you receive nothing: no salary and no benefit. That is two months without income, even though the end date in the settlement agreement appeared perfectly reasonable.

The solution is as simple as it is crucial: ensure that the end date in the settlement agreement is at least equal to the date that would have applied in the case of a regular dismissal. In the example above, an end date of 1 July would prevent the WW gap entirely.

Being released from work does not change the end date

Many settlement agreements stipulate that you are released from work during the notice period, with continued payment of salary. That sounds favourable, and it is. However, release from work does not affect the end date of the employment. As long as the end date is too early, the risk of a notional notice period and a gap in unemployment benefit (WW) remains. The start date of your unemployment benefit (WW) depends on the end date in the agreement, not on the date on which you actually stopped working.

Common mistakes regarding the end date in the settlement agreement

These are the pitfalls that occur most frequently in practice:

• Te vroege einddatum – the most common mistake; the employer proposes an early date and the employee agrees without checking.
• Failure to take the CAO into account – some collective labour agreements provide for longer notice periods than the law; the UWV always applies the notice period that actually applies.
• Notice calculated from the wrong date – the notice period runs from the end of the calendar month; a difference of one day can amount to a full month.
• Overlooking a contractual notice period that differs from the statutory one – a longer notice period for the employer agreed in the employment contract also counts.
• Incorrect wording regarding who initiated the dismissal – if the settlement agreement suggests that you yourself initiated the dismissal, the UWV may refuse your unemployment benefit (WW) entirely on the grounds of culpable unemployment.

Practical tips to avoid a gap in your unemployment benefit (WW)

• Calculate your employer's notice period based on the length of your employment before you agree to an end date.
• Check whether your employment contract or collective labour agreement contains a different notice period and always use that as the basis when determining the end date.
• Ensure that the end date in the settlement agreement is at least equal to the date that would apply in the event of ordinary notice of dismissal; a later end date is also permitted.
• Have the wording regarding who initiated the dismissal recorded in neutral terms: it must be clear that the reason lies with the employer.
• Have the settlement agreement reviewed before you sign it; once signed, making changes is virtually impossible.

Why Employment Lawyer Eindhoven

At Arbeidsjurist Eindhoven we understand that a settlement agreement may appear straightforward at first glance, while the details concerning the end date and the notional notice period can have significant financial consequences. We help employees in Eindhoven and the Brabant region to have their settlement agreement reviewed before signing, so that your unemployment benefit (WW) starts without an unexpected gap. Please feel free to contact us without obligation, and we will look at your situation together.

Frequently asked questions

What is the notional notice period in a settlement agreement?

The notional notice period is the period that the UWV takes into account when assessing your unemployment benefit (WW) application following a settlement agreement. The UWV calculates when the employment would have ended had your employer given notice in the ordinary way, and does not allow your unemployment benefit (WW) to commence until after that notional period has elapsed. If the agreed end date in the settlement agreement falls earlier, a waiting period arises during which you receive neither salary nor unemployment benefit (WW).

How do I determine the correct end date in my settlement agreement to avoid a gap in my unemployment benefit (WW)?

Calculate the notice period that applies to your employer based on the length of the employment relationship (Article 7:672(2) of the Dutch Civil Code) and check whether your contract or collective labour agreement contains a different, longer period. Add that period to the end of the calendar month in which the settlement agreement is signed. The result is the earliest possible end date from which your unemployment benefit (WW) can commence without a gap. Make sure the end date in the settlement agreement does not fall before that date.

Does a release from the obligation to work affect the notional notice period?

No. Whether or not you are required to work during the notice period makes no difference to the UWV. The notional notice period is calculated on the basis of the end date stated in the settlement agreement, not on the basis of the date on which you actually stopped working. Even with a full release from the obligation to work, an end date that is too early will still carry the risk of a gap in your unemployment benefit (WW).

Does the statutory notice period also apply under a collective labour agreement (CBA)?

The UWV always applies the notice period that is actually applicable to your situation. Some CBAs contain longer notice periods than the law prescribes. If your CBA provides for a longer period and the settlement agreement does not take this into account, the UWV may nonetheless apply that longer notional notice period. Always check your CBA alongside your employment contract.

Can a gap in unemployment benefit (WW) caused by an end date that is too early still be corrected after the fact?

Once you have signed the settlement agreement, making changes is virtually impossible without the cooperation of your employer. It is therefore crucial to check the end date before signing. Always have your settlement agreement reviewed by an employment law specialist before you agree to it, so that a gap in income is avoided.

We are happy to think along with you. For advice tailored to your situation, we would be glad to talk. No rights can be derived from the content of this page and it may contain inaccuracies.