Settlement Agreement in a Broken Working Relationship: What Are Your Rights?

A VSO in the context of a disrupted employment relationship often offers a clean way out. Below you can read what rights you have and how to agree a good arrangement.

When the working relationship between you and your employer has become seriously damaged, a settlement agreement (VSO) may sometimes be 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 much more involved than just that signature.

What does a disrupted employment relationship mean in legal terms?

Not every dispute or difference of opinion makes an employment relationship legally 'disrupted'. In employment law, a disrupted relationship is said to exist where there is a lasting and serious breakdown of trust, such that 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 working atmosphere has completely broken down.

In such a case, the employer may attempt to arrange dismissal through the subdistrict court on the basis of the so-called 'g-ground': the disrupted employment relationship. However, that takes time, money, and energy. This is why employers often opt for a settlement agreement as a quicker and less contentious route.

Rights you have as an employee

The fact that your employer has presented a settlement agreement (VSO) does not mean that 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 (VSO), 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 mentioned in the VSO, the cooling-off period is extended to three weeks.

Right to fair compensation

When leaving via a settlement agreement (VSO), you are in most cases entitled to at least the transition payment. 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 disrupted relationship is (partly) attributable to the employer.

Recht op juridisch advies

You may always — and it is strongly recommended — consult a legal adviser before signing. An employer may not put pressure on you to decide immediately. Take the time you need.

What should you look out for in the agreement?

A settlement agreement (VSO) is tailor-made. The wording ultimately determines what you receive and which rights you do or do not retain. At the very least, pay attention to the following points:

• Einddatum: has a sufficient notice period been observed?
• Ontslagvergoeding: is at least the transition payment being paid out?
• Neutraal getuigschrift: has it been agreed that you will receive a positive or neutral reference?
• Finale kwijting: do you fully understand what you are giving up by signing this clause?
• WW-aanspraken: does the agreement state that the initiative lies with the employer? That is necessary for unemployment benefit (WW).
• Non-concurrentiebeding: is this clause explicitly waived, or does it remain in force?

Can you refuse a settlement agreement in the case of a disrupted employment relationship?

Yes, you can. You are never obliged to sign a settlement agreement. Refusing means the employer must pursue another route, for example through the subdistrict court. There, the employer must demonstrate that the employment relationship is genuinely and irreparably disrupted and that sufficient efforts have been made to resolve the conflict.

Sometimes refusing is the smart move, sometimes it is not. This depends on your specific situation: how strong is the employer's legal position, how long will a procedure take, and what is financially most advantageous for you? Make sure you get proper 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 consider it.
• Read every part of the agreement carefully and ask for clarification on anything that is unclear.
• Consult an employment lawyer before responding to the offer.
• Negotiate the terms; the first offer is rarely the best.
• Check that the unemployment benefit (WW) safeguards are secured in the wording of the agreement.
• Always have any oral arrangements recorded in writing in the settlement agreement itself.

Conflict versus disrupted relationship: the distinction matters

A conflict is not automatically the same as a lastingly disrupted employment relationship. Employers sometimes try to bridge this distinction by quickly 'upgrading' a conflict into a disrupted relationship in order to part ways with an employee more swiftly. Do not be caught off guard by a situation that is being artificially exaggerated. If you feel that the conflict at hand is one that can be resolved, mediation can be a valuable step before you consider a VSO.

Would you like to know more about your rights and approach when dealing with a conflict in the workplace? Then also read our comprehensive overview on the Settlement agreement in a dispute: your rights and approach.

Why Employment Lawyer Eindhoven

At Arbeidsjurist Eindhoven we know the local labour market and understand how these situations play out in practice. We review 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 language.

Have you received a settlement agreement following a conflict or a breakdown in the employment relationship? Get in touch with no obligation. We are happy to think through the best way forward together with you.

Frequently asked questions

Do I have to sign a settlement agreement if my employer says the employment 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 apply to the subdistrict court to have the employment contract dissolved.

Am I entitled to unemployment benefit (WW) after a settlement agreement involving a breakdown in the employment relationship?

In most cases yes, provided the settlement agreement has been drafted correctly. It is essential that the initiative for the dismissal clearly rests 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 gives you fourteen days to reconsider after signing. During that period you may dissolve the agreement in writing without giving any reason. If the right of reconsideration is not mentioned in the settlement agreement, a period of three weeks applies instead.

What if the breakdown in the employment relationship was partly caused by my employer?

In that case you may have a stronger negotiating position than you think. If the employer can be shown to have contributed to the conflict, that can affect the level of the payment. An employment lawyer can assess how strong your position is.

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.