When the working relationship between you and your employer has broken down seriously, a settlement agreement (VSO) is sometimes put on the table as a way out. But what are your rights in such a situation? And are you obliged to sign that agreement? The short answer is no — but there is far more at play than just that signature.
What does a broken working relationship mean legally?
Not every argument or disagreement makes a working relationship legally ‘broken’. In employment law, a disrupted relationship is said to exist when there is a lasting and serious breakdown of trust, where a restoration of the working relationship is no longer reasonably possible. Think of persistent conflicts, a deep-rooted difference of opinion, or a situation in which the atmosphere has completely deteriorated.
In such a case, the employer may attempt to arrange dismissal through the district court on the basis of the so-called ‘g-ground’: the broken working relationship. However, that takes time, money, and energy. This is why employers often opt for a settlement agreement as a quicker and more amicable route.
Rights you have as an employee
The fact that your employer presents you with a settlement agreement does not mean you are in a weak position. On the contrary: as an employee, you have clear rights that protect you.
Cooling-off period after signing
Once you have signed a settlement agreement, you are legally entitled to fourteen days in which to withdraw your decision without giving any reason. This right to a cooling-off period always applies, even if it is not mentioned in the agreement. If this right is not included in the settlement agreement, the cooling-off period is extended to three weeks.
Right to a fair redundancy payment
When leaving via a settlement agreement, you are in most cases entitled to at least the statutory redundancy payment (transitievergoeding). This is the statutory severance payment based on your years of service and salary. However, you need not stop there: in negotiations, more is often achievable, particularly if the broken relationship is partly attributable to the employer.
Right to legal advice
You are always entitled — and it is strongly recommended — to consult a legal adviser before signing. An employer may not pressurise you into making an immediate decision. Take the time you need.
What should you look out for in the agreement?
A settlement agreement is tailored to your specific situation. The wording ultimately determines what you receive and which rights you do or do not retain. Pay particular attention to the following points:
- End date: has a sufficient notice period been observed?
- Redundancy payment: is at least the statutory redundancy payment being paid out?
- Neutral reference: has it been agreed that you will receive a positive or neutral reference?
- Full and final settlement do you fully understand what you are waiving by signing this clause?
- Unemployment benefit (WW) entitlement: does the agreement state that the initiative to terminate lies with the employer? This is necessary in order to claim unemployment benefit.
- Non-compete clause: is this clause being explicitly waived or does it remain in force?
Can you refuse a settlement agreement in a broken working relationship?
Yes, you can. You are never obliged to sign a settlement agreement. Refusing means the employer must take a different course of action, for example through the district court. There, the employer must demonstrate that the working relationship is genuinely and permanently broken and that they made sufficient efforts to resolve the conflict.
Arrange a no-obligation chat and discover how we can help you.
Plan a conversationSometimes refusing is the smart move; sometimes it is not. This depends on your specific circumstances: how strong is the employer’s legal position, how long would proceedings take, and what is financially most advantageous for you? Make sure you receive sound advice on this.
Practical tips if you are offered a settlement agreement
- Never sign on the same day you receive the settlement agreement; always take time to reflect.
- Read every section of the agreement carefully and ask for clarification on anything that is unclear.
- Engage an employment lawyer before responding to the offer.
- Negotiate the terms; the first offer is rarely the best.
- Check that your entitlement to unemployment benefit is safeguarded in the wording of the agreement.
- Always ensure that any verbal agreements are recorded in writing within the settlement agreement itself.
Conflict versus broken relationship: the distinction matters
A conflict is not automatically the same as a permanently broken working relationship. Employers sometimes try to blur this distinction by quickly ‘upgrading’ a conflict to a broken relationship in order to part ways with an employee more swiftly. Do not be caught off guard by a situation that is being artificially inflated. If you feel that the conflict is one that can be resolved, mediation may be a worthwhile step before you consider a settlement agreement.
Would you like to know more about your rights and the best approach when dealing with a workplace conflict? Read our comprehensive overview of the settlement agreement in cases of conflict: your rights and approach.
Why Labour Lawyer Eindhoven
At Arbeidsjurist Eindhoven, we know the local employment market and understand how these situations play out in practice. We scrutinise your settlement agreement critically, advise you on the room for negotiation, and stand by your side when you want to know what you are genuinely entitled to — without legal jargon, just plain and clear language.
Have you received a settlement agreement following a conflict or broken working relationship? Get in touch with us for a no-obligation consultation. We are happy to help you consider the best way forward.
Frequently asked questions
Do I have to sign a settlement agreement if my employer says the working relationship has broken down?
No, you are never obliged to sign a settlement agreement. Your employer cannot force you. If you do not sign, they must attempt to have the employment contract dissolved through the district court.
Am I entitled to unemployment benefit after a settlement agreement in a broken working relationship?
In most cases, yes, provided the settlement agreement has been drawn up correctly. It is essential that the initiative to terminate the employment clearly lies with the employer and that the notice period has been properly observed. Always have the wording checked.
Can I reverse a settlement agreement after I have signed it?
Yes, the law grants you a fourteen-day cooling-off period after signing. During this period, you can dissolve the agreement in writing without giving any reason. If the cooling-off period is not mentioned in the settlement agreement, a period of three weeks applies instead.
What if the broken working relationship was partly caused by my employer?
In that case, you may have a stronger negotiating position than you realise. If the employer can be shown to have contributed to the conflict, this may have a bearing on the level of compensation. An employment lawyer can assess how strong your position is.
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.
