Settlement Agreement in a Workplace Dispute: What Compensation Can You Expect?

What payment in a settlement agreement following a workplace dispute?

When your employer offers a settlement agreement (VSO) following an employment dispute, one of the first questions you ask yourself is: what is this actually worth? The level of the compensation is not set by law, but there are clear guidelines and factors that determine what is reasonable. In this article you can read what to look out for and when there is room to negotiate.

What is the basis for compensation in a settlement agreement (VSO)?

In a standard dismissal procedure, you are in principle entitled as an employee to a transition payment. This amount is calculated by law: for each year worked with the employer you receive one third of a monthly salary. That also applies as the basis in a settlement agreement.

In an employment dispute, however, there is often more at play. The circumstances surrounding the dismissal are relevant to what constitutes a reasonable payment. Consider the question of who is responsible for the breakdown of the employment relationship, how long the conflict has been ongoing, and whether the employer has acted in a culpable manner.

Transition payment as a starting point

The transition payment is not always the end point in negotiations over a settlement agreement. Particularly in conflict situations, a higher payment is regularly agreed upon. This can be achieved via two routes:

• Billijke vergoeding: if the employer has acted in seriously culpable manner, a higher level of compensation may be justified.
• Onderhandelingsruimte: employers are sometimes prepared to pay more in order to avoid lengthy proceedings or further escalation.
• Extra afspraken: think of a longer notice period, retention of secondary employment benefits, or an outplacement budget.
• Advocatenvergoeding: in some cases, a contribution towards legal costs is included in the settlement agreement.

It is therefore advisable not to focus solely on the final figure, but to consider the overall package of the agreement.

When can you claim more?

There are situations in which you, as an employee, are in a stronger position when negotiating the amount of the payment. A few examples:

• The employer has fuelled the conflict or has made insufficient efforts to resolve it.
• There has been unacceptable behaviour, bullying, or discrimination in the workplace.
• You have made every effort over a prolonged period to preserve the employment relationship, but the employer was uncooperative.
• No, or hardly any, reintegration attempt was made where the conflict was accompanied by absence from work.

In such cases, the payment may exceed the standard transition payment. However, the reverse can also apply: if you as an employee bear some responsibility for the conflict, this may affect your negotiating position.

What else is included in the settlement agreement, beyond the payment?

A settlement agreement is about more than just a sum of money. It also contains other arrangements that can have significant financial or practical consequences. When assessing a settlement agreement, always pay attention to:

• The end date of the employment and whether the notice period has been applied correctly.
• The wording of the reason for dismissal, which affects your entitlement to unemployment benefit (WW).
• Any confidentiality or non-compete clauses.
• Whether holiday days will be paid out and how any bonus is handled.
• Arrangements regarding a reference or certificate of employment.

All these elements form part of the overall picture and can in practice be just as valuable as the amount of the payment itself.

The cooling-off period and the importance of advice

Once you have signed a settlement agreement, you are legally entitled to fourteen days in which to reconsider your decision. Even better, however, is to be well informed before signing. A settlement agreement is binding and the consequences are significant, particularly in an employment dispute where emotions can run high.

Always seek advice from a professional before putting your signature to it. That way you will know whether the offered payment is reasonable and whether there is room for a better deal. You can read more about your rights and approach in a conflict situation on the page Settlement agreement in a conflict situation: your rights and approach.

Why Employment Lawyer Eindhoven

At Arbeidsjurist Eindhoven, we assist employees in the Eindhoven and Brabant region with assessing and negotiating a settlement agreement. We look not only at the amount of the payment, but at the complete picture: your legal position, your unemployment benefit (WW) rights, and what is fair given the circumstances of your dispute.

Would you like to know whether the settlement agreement you have received is in order? Contact us without obligation. We are happy to think things through with you.

Frequently asked questions

Am I always entitled to the transition payment in a settlement agreement?

Not necessarily. The transition payment is a statutory requirement in a dismissal procedure via UWV or the subdistrict court. In a settlement agreement, the matter is subject to free negotiation, but in practice the transition payment is often used as a minimum. You have no automatic formal entitlement, but a lower amount is in most cases unreasonable and open to challenge.

Can I receive more than the transition payment in an employment dispute?

Yes, that is certainly possible. If the employer bears a significant share of responsibility for the conflict, or if culpable conduct on their part is involved, there is often room to negotiate a higher payment. An employment lawyer can assess how strong your position is.

What if I have already signed the settlement agreement but have doubts about the payment?

After signing, you have fourteen days in which to reconsider. Within that period you can dissolve the agreement in writing without giving any reason. After that period, this becomes considerably more difficult. If in doubt, consult an employment lawyer immediately.

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.