Settlement Agreement and Mental Health Issues: Key Considerations for Employees

A settlement agreement with mental health issues

Has your employer offered you a settlement agreement while you are struggling with psychological complaints? In that case it is especially important to pay close attention. Psychological complaints can affect your judgement, and a signed agreement is legally binding. In this article you can read which points deserve particular attention in your situation.

What makes psychological complaints a special situation?

With physical complaints it is often clearly visible that someone is not fully fit for work. With psychological complaints this is different: it is less apparent from the outside how severe the situation is for you. Nevertheless, a burn-out, depression, or anxiety disorder can have an enormous impact on your ability to make important decisions.

Employers are sometimes insufficiently aware of this — or take advantage of it. It is therefore important that you are conscious of your own position and take the right steps in good time.

Do you have additional protection as an employee who is ill?

During illness, including mental health conditions, the prohibition on dismissal applies in principle. This means your employer is not simply permitted to terminate the employment contract unilaterally. A settlement agreement falls outside that protection, however: if you sign voluntarily, that protection lapses.

That is precisely why it is so important that you think carefully before signing. Voluntariness presupposes that you are capable of making a considered decision. If mental health conditions seriously impair your freedom of will, that may be legally relevant at a later stage.

Points to consider with a settlement agreement during mental health conditions

Below you will find the most important points to bear in mind if you are offered a settlement agreement whilst you are not in a good place mentally:

• Neem altijd bedenktijd. You have a statutory right to a fourteen-day cooling-off period after signing a settlement agreement. Make sure you actually use that time.
• Do not allow yourself to be put under pressure. An employer may not force you to decide quickly. Feeling pressured? That is a signal to be extra cautious.
• Always have the settlement agreement checked by a legal professional. Have someone with knowledge of employment law review the agreement before you sign.
• Check the consequences for your benefits. Consider the WW, the Sickness Benefits Act (ZW), and possibly the WIA. A settlement agreement can have significant consequences for your income after the employment relationship ends.
• Let op de einddatum. Does the agreement expire before the end of your wage-continuation obligation? If so, that may work out to your disadvantage.
• Ask your occupational health physician for a written opinion. A declaration regarding your fitness and mental capacity may prove useful at a later stage.
• Check the severance payment. Has the transition payment been calculated correctly? Have any additional arrangements been made regarding outplacement or a confidentiality clause?

What if you have already signed?

Have you already signed the settlement agreement but have second thoughts afterwards? You have fourteen days to withdraw from the agreement. You do not need to give reasons for this – a written notification is sufficient.

In exceptional circumstances, it is also possible to challenge a signed settlement agreement at a later stage, for example if you can demonstrate that due to psychological circumstances you were not in a position to make a considered decision. This is legally complex and requires professional support.

What can you expect from the negotiation process?

Negotiating a settlement agreement is always a stressful experience, but with psychological complaints this can be particularly burdensome. Nevertheless, it is wise not to simply accept the first offer. Employers often start with a minimal proposal.

Points you can negotiate on:

• The amount of the severance payment
• The end date of the employment
• Continued payment of salary up to the end date
• A neutral or positive reference
• Reimbursement of legal costs
• Outplacementondersteuning

You do not have to go through this negotiation process alone. An employment lawyer can negotiate on your behalf or alongside you, so that the burden on you is reduced.

When is a settlement agreement actually a sensible choice?

Not every settlement agreement is a bad outcome. Sometimes a settlement agreement provides peace of mind and clarity, particularly where the employment relationship has broken down seriously and a return to the workplace is no longer realistic. Even then, however, the same applies: make sure the terms are fair and that you know what you are signing.

For more information about the broader context of illness and a settlement agreement, you can also visit the overview page Settlement agreement during illness: everything you need to know.

Why Employment Lawyer Eindhoven

At Arbeidsjurist Eindhoven, we understand that mental health difficulties are already hard enough to deal with. The last thing you need on top of that is uncertainty about your legal position. We help you in a calm, practical way to gain clarity about your situation and the options available to you.

Whether you want to have a settlement agreement checked, wish to negotiate, or simply want to talk things through: you are welcome to get in touch without any obligation. We are here for employees in Eindhoven and the Brabant region who are looking for solid legal advice, without the hassle.

Frequently asked questions

Is my employer allowed to offer me a settlement agreement while I am suffering from mental illness?

Yes, they are. An employer may always propose a settlement agreement, including during a period of illness. However, you are never obliged to sign. The prohibition on dismissal during illness does not apply if you yourself agree to the termination.

What happens to my unemployment benefit (WW) if I sign a settlement agreement while experiencing mental health difficulties?

In principle, you can claim unemployment benefit (WW) if the settlement agreement is properly drafted and meets the relevant requirements. The UWV will assess whether you have become unemployed through any fault of your own. Always have the agreement checked on this point.

Can a settlement agreement be reversed if I was not thinking clearly due to mental health difficulties?

Within fourteen days of signing, you have the right to withdraw from the settlement agreement in any case. After that, matters become more legally complex, but in exceptional circumstances it may be possible to invoke grounds of defective consent. Please consult an employment lawyer for this.

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.