Completing a model settlement agreement may appear straightforward, but its contents determine whether you will be entitled to unemployment benefit (WW) and whether you have secured the best possible departure arrangement. Particularly in Eindhoven and the Brabant region, a correctly completed document is only the beginning – the terms within it are just as important as the signature below it.
What is a model settlement agreement
A settlement agreement (vaststellingsovereenkomst, VSO) is the written record confirming that you and your employer are terminating the employment relationship by mutual consent. Because this constitutes dismissal by mutual consent, the employer does not need permission from the UWV (Employee Insurance Agency) or the cantonal court. All arrangements — from the end date to any compensation — are recorded jointly in writing.
The legal basis is found in Articles 7:900 to 7:906 of the Dutch Civil Code (the general rules for settlement agreements) and in Article 7:670b of the Dutch Civil Code, which applies specifically to the termination of an employment contract. That latter article requires the agreement to be in writing: a verbal arrangement is not legally valid in this context.
Mandatory provisions that must not be omitted
A model is a starting point, not a finishing point. Before you fill in or sign anything, it is important to know what information must be present in all cases. The key elements are:
- Names and addresses of both parties (employer and employee)
- The employment end date, taking the relevant notice period into account — this preserves your entitlement to a consecutive WW benefit
- The grounds for dismissal and a statement that the initiative lies with the employer; this is essential for the UWV’s assessment of unemployment benefits
- Confirmation that there is no urgency underlying the departure
- The severance payment, typically based on the statutory severance payment, but with scope to negotiate a higher amount
- Final settlementOutstanding salary, holiday pay, and accrued holiday days
- Release from duties and, where applicable, provisions relating to any non-competition clause
- Full and final settlement: confirmation that, once all obligations have been fulfilled, neither party has any further claims against the other
- The statutory cooling-off period of 14 days, discussed in more detail below
Bear in mind that the VSO must also make sufficiently clear to the UWV that you did not leave voluntarily and that there was no culpable conduct on your part. The UWV always scrutinises the agreement carefully on precisely these points when assessing a WW claim.
The statutory cooling-off period explained
As soon as you sign, the cooling-off period commences immediately. Under Article 7:670b(2) of the Dutch Civil Code, you have the right as an employee to dissolve the settlement agreement in writing within 14 calendar days of its conclusion – without giving any reason. If you dissolve it in time, the employment contract revives as though no VSO had ever been entered into.
If the cooling-off period is Not included in the agreement, the period is automatically extended to 21 days by operation of law. The employer is obliged to inform you explicitly of this right; if they fail to do so, you automatically benefit from that extra week. You should also be aware that you may only invoke this right once every six months.
Arrange a no-obligation chat and discover how we can help you.
Plan a conversationMake smart use of the cooling-off period:
- Have the agreement reviewed by an employment lawyer before the deadline expires
- Check whether the notice period has been calculated correctly (if the period is too short, this will result in a waiting period for unemployment benefit)
- Please confirm if the non-compete clause has been addressed and if the transition payment is accurate.
- Check whether the grounds for dismissal are worded in a way that is compatible with unemployment benefit regulations
- Always send a notice of dissolution in writing. And by registered post
Pitfalls when completing a model agreement
Online models are a convenient starting point, but they are by definition generic. What appears in a standard VSO is not always what you need. Common mistakes include:
- An end date that does not coincide with the statutory notice period, resulting in the WW benefit starting later
- An insufficient payment, as the transitional payment has not been calculated correctly for your specific circumstances (part-time work, irregular hours allowance, variable pay).
- No release from the non-competition clause, or one that is too vaguely worded
- No arrangements regarding outplacement allowance or study costs
- No mention of the cooling-off period, which can give rise to disputes about the agreement’s validity
Moreover, it is worth noting that an agreement reached via WhatsApp or email does not, as a rule, constitute a legally valid conclusion of a VSO — the signed written version is the definitive one.
It is worth negotiating the terms
A model settlement agreement is not a diktat. Employers and employees are free to negotiate every aspect. Whereas the compensation in a dismissal procedure via the UWV or the cantonal court is fixed by statute, a VSO allows for a tailored approach. Consider, for example, a higher severance payment, an outplacement budget, a favourable end date, or the waiver of a non-compete clause.
In practice, it regularly becomes clear that negotiating really does pay off. Those who sign without seeking advice sometimes miss out on significant benefits — not necessarily because the employer is acting in bad faith, but simply because standard templates are not tailored to each individual. You can read more about your rights in relation to these agreements on the Settlement Agreement Page.
Why Labour Lawyer Eindhoven
At Arbeidsjurist Eindhoven, we help you not only to complete a model settlement agreement correctly, but also to assess whether its contents are truly arranged in your favour. We examine the notice period, the compensation, the non-compete clause, and the WW-friendliness of the wording — so that you know exactly where you stand before you sign.
Do you live or work in Eindhoven or the Brabant region and have you received a draft VSO? Get in touch with no obligation. An initial conversation is always free of charge.
Frequently asked questions
What must a model settlement agreement contain as a minimum?
A valid VSO must include at least the names and addresses of both parties, the end date of the employment (including the correct notice period), the grounds for dismissal stating that the initiative lies with the employer, the termination payment, the final settlement (salary, holiday pay, and holiday days), full and final settlement, and the statutory cooling-off period of 14 days. If the cooling-off period is not mentioned, it is automatically extended to 21 days.
How long is the cooling-off period after signing a settlement agreement?
Under Article 7:670b(2) of the Dutch Civil Code, you have 14 calendar days as an employee to reconsider after the VSO has been concluded. If the employer has not included the cooling-off period in the agreement, the period is automatically 21 days. Within that time, you can dissolve the agreement in writing without giving reasons. You may invoke this right once every six months.
Can I just use an online template for a settlement agreement?
An online template is a useful starting point, but it is no guarantee of a legally correct and complete agreement. Standard templates do not account for your specific situation: the level of your variable pay, a part-time contract, an existing non-compete clause, or deviating collective agreement provisions. Always have the template adapted and reviewed by an employment law solicitor before you sign.
Will I lose my entitlement to Universal Credit if I sign a settlement agreement?
Not automatically, but the wording of the VSO is crucial. When assessing a WW claim, the UWV considers whether the initiative lay with the employer, whether there was no urgent reason underlying the dismissal, and whether the correct notice period was observed. If the VSO is not correctly drafted on these points, the UWV may refuse a WW benefit or impose a waiting period.
Are you allowed to negotiate the contents of a model settlement agreement?
Yes, absolutely. A settlement agreement is a contract between two parties and not a unilateral diktat. You may negotiate the level of the payment, whether or not a non-compete clause is waived, an outplacement budget, release from duties, and other terms. Employers and employees are entirely free to agree on a tailored arrangement, provided the statutory minimum requirements (such as the transition payment and WW requirements) are observed.
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.
