Settlement Agreement and Zero-Hours Contract: What You Need to Know

A settlement agreement with a zero-hours contract

A settlement agreement in the context of a zero-hours contract often raises more questions than one involving a standard permanent contract. How many hours count? Are you entitled to any payment at all? And what about your unemployment benefit (WW)? In short: even as an on-call worker you have full rights upon dismissal by mutual consent, but the details deserve extra attention.

What exactly is a zero-hours contract?

With a zero-hours contract, you and your employer do not agree on a fixed number of hours per week or month. You are called in when needed and paid for the hours you actually work. The contract can be concluded for a fixed or indefinite period. Important to know: a zero-hours contract is not currently prohibited, but strict conditions do apply. After the first 26 weeks, such a contract may only continue if a collective labour agreement (cao) expressly permits this. In addition, the Minister of Social Affairs and Employment submitted a legislative proposal in May 2025 that is intended to largely abolish the zero-hours contract and replace it with so-called bandwidth contracts with a minimum and maximum number of hours. This proposal still has to be passed by the House of Representatives and the Senate.

Entitlement to a transition payment even on a zero-hours contract

Many on-call workers are unaware that they are perfectly entitled to a transition payment. Yet that is indeed the case. From the very first day of employment you accrue a transition payment, provided that the termination is initiated by the employer. With a settlement agreement you can therefore include this payment as part of the agreed terms.

The calculation works slightly differently from that for a contract with fixed working hours. Because you have no fixed hours, the average monthly salary over the last twelve months is used as the starting point. All hours worked and amounts earned are added together and divided by twelve. Holiday pay and other fixed allowances are also included in that calculation. Based on that average, the standard formula then applies: one third of the average monthly salary for each full year of service. The maximum transition payment in 2026 is €102,000 gross.

If during the past twelve months you had a period of thirty calendar days or more during which you did not work due to illness or leave, the reference period for calculating the average salary is extended by one calendar month, so that you are not disadvantaged by that absence.

Points to consider regarding the content of the settlement agreement

A settlement agreement in the context of a zero-hours contract contains the same essential elements as any other contract. Nevertheless, there are a few points that more commonly go wrong with on-call workers:

• Initiatiefnemer vermeld? The settlement agreement must explicitly state that the initiative to terminate the employment lies with the employer. If this is absent or worded incorrectly, the UWV may reject your unemployment benefit (WW) application.
• Neutrale ontslagreden Ensure that the reason for dismissal is one for which you cannot be held at fault, such as economic grounds, a reorganisation, or a difference of opinion.
• Correcte opzegtermijn The statutory notice period applicable to the employer must be observed. If a shorter period is used, the UWV will shift the start date of your unemployment benefit (WW) forward, leaving you temporarily without income.
• Correct calculation of the transition payment Check whether the average salary over the last twelve months has been used as the basis and whether holiday pay has been included.
• Outstanding holiday days and hours Accrued holiday days or hours must be paid out or offset in the final settlement.
• Exemption from work Agree clearly whether you will still be called in to work during the notice period or whether you are released from your duties.

Unemployment benefit (WW) following a zero-hours contract

Even as a on-call worker you may be entitled to unemployment benefit (WW) after your employment has ended by means of a settlement agreement. For this, the settlement agreement must be WW-proof and you must personally meet the WW conditions. The most important requirement is the so-called weeks criterion: in the 36 weeks preceding your unemployment you must have worked for at least 26 weeks. For on-call workers with variable hours it can be difficult to keep track of this precisely, particularly if there have been gaps between successive contracts.

Please note that you must register as a jobseeker via werk.nl no later than one week before the end date of your employment, and apply for your unemployment benefit (WW) on the first working day after the end date. Registering late may result in a reduction of your benefit.

Cooling-off period after signing

After signing a settlement agreement you always have a statutory reflection period of fourteen days. Within that period you may withdraw from the agreement in writing without giving any reason, after which your employment simply continues. Is the reflection period not mentioned in the settlement agreement? In that case this period is automatically extended to 21 days. Use this time to have the agreement reviewed if you have not already done so — particularly in the case of a zero-hours contract, where the calculations are somewhat more complex than usual.

Practical tips when you receive a VSO

• Never sign immediately: ask for time to reflect and obtain legal advice before signing.
• Have the average salary over the past twelve months carefully recalculated, including holiday pay.
• Check whether consecutive contracts with the same employer have been counted towards the calculation of the length of service; contracts that follow one another with a gap of no more than six months are added together.
• Check whether your collective labour agreement contains specific provisions regarding zero-hours contracts, notice periods, or payments that are more favourable to you.
• Make sure the settlement agreement states the employer's correct notice period, not the shorter notice period applicable to the employee.
• Register as a jobseeker with the UWV in good time so that your unemployment benefit (WW) follows on seamlessly from your end date.

Why Employment Lawyer Eindhoven

At Arbeidsjurist Eindhoven, we know the specific pitfalls of settlement agreements in zero-hours contracts. Whether you have been working as a zero-hours worker for years or have just received a settlement agreement in the post: we are happy to think through your position with you, ensure the correct calculation of your payment, and help you reach a WW-proof agreement. Get in touch with no obligation and find out what we can do for you. Right here in Eindhoven, no barriers.

Frequently asked questions

Am I entitled to a transition payment as a zero-hours contract worker?

Yes, even on a zero-hours contract you are entitled to a transition payment from the first day of your employment, provided the termination is initiated by the employer. The payment is calculated on the basis of the average monthly salary over the last twelve months, including holiday allowance and fixed supplements.

How is the average wage calculated for the transition payment in the case of a zero-hours contract?

For the calculation, all amounts earned in the twelve months prior to the end date are added together and divided by twelve. That average monthly salary forms the basis. Holiday allowance and fixed supplements are included. Were you absent for more than thirty calendar days due to illness or leave? In that case the reference period is extended by one calendar month.

Can I apply for unemployment benefit (WW) after a settlement agreement on a zero-hours contract?

You can, but certain conditions apply. The settlement agreement must be WW-proof: the initiative must lie with the employer, there must be no blameworthy reason for dismissal, and the correct notice period must have been observed. In addition, you must personally meet the WW weeks requirement: a minimum of 26 weeks of work in the 36 weeks prior to your unemployment.

What is the cooling-off period after signing a settlement agreement?

After signing, you have a statutory cooling-off period of fourteen days in which you can revoke the agreement in writing without giving any reason. If the cooling-off period is not stated in the settlement agreement, a period of 21 days applies automatically. Use this time to have the agreement reviewed by a legal adviser.

Do previous zero-hours contracts with the same employer count towards length of service?

Yes. Consecutive contracts with the same employer count together provided the gap between them was no more than six months. This is relevant both to the amount of the transition payment and to the duration of any unemployment benefit (WW). Always have this carefully checked, as it is regularly overlooked.

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.