Reference letter and settlement agreement in outplacement

A reference letter in the context of a Dutch settlement agreement (vaststellingsovereenkomst) is a written statement by the employer about your employment, aligned with the arrangements in the settlement agreement. This document can strongly influence your position on the labour market, especially if you leave through mutual consent. In this article you will learn how the reference letter is connected to the settlement agreement, what your legal rights are and how to use it smartly within an outplacement process.

What is a reference letter and why does it matter?

In Dutch employment practice, a reference letter (getuigschrift) is a written statement from the employer about the employment relationship. Under the Dutch Civil Code, an employee is entitled to such a document at the end of the employment if they request it. The reference letter usually states the period of employment, the position, main tasks and often an assessment of performance.

In case of termination through a settlement agreement, the reference letter becomes even more important. The way your departure is described can reassure future employers or raise questions. A neutral or positive wording helps you move on without unnecessary damage to your professional reputation. Therefore, it is wise not to wait passively, but to actively think along about the content of the letter.

The reference letter should also be consistent with your CV and LinkedIn profile. Large discrepancies between the employer’s description and the way you present your experience may trigger difficult questions in job interviews. Careful alignment up front prevents such issues and gives you more confidence while applying for new roles.

• A reference letter confirms duration and content of your employment.
• The wording influences how future employers view your departure.
• Neutral wording prevents a “stain” in your career narrative.
• Alignment with CV and LinkedIn makes your profile credible and consistent.

What is a settlement agreement and how does it relate to the reference letter?

A settlement agreement (vaststellingsovereenkomst, often abbreviated as VSO) is a written termination agreement between employer and employee. It sets out that the employment will end, on which date and under which conditions. It includes issues such as severance pay, notice period, release from work and any arrangements on outplacement or training. The agreement must meet requirements set by the Dutch Employee Insurance Agency (UWV) so that your entitlement to unemployment benefits (WW) is not jeopardised.

Many settlement agreements also contain a clause on the reason for termination and how parties will communicate about the departure towards third parties. This is sometimes called the “departure text” or “final clause”. That is exactly where the link with the reference letter arises: the way the reason for termination is formulated in the agreement often forms the basis for the text in the reference letter and for what is said in reference calls.

It is therefore sensible to discuss the reference letter while negotiating the settlement agreement. Instead of arranging the letter only after signing, you can propose to include explicit arrangements about it in the VSO. This prevents you from being surprised later by a text you do not agree with and that might hinder you in future job interviews.

• The settlement agreement regulates the legal termination of employment.
• The departure reason in the VSO often guides the reference letter’s wording.
• Alignment between VSO, reference letter and references avoids contradictions.
• Clear arrangements reduce the risk of reputational damage.

Legal rights regarding the reference letter under Dutch law

Under Dutch labour law, you have the right to a reference letter when the employment ends and you request one. This also applies if you leave via a settlement agreement and even if the employer was not satisfied with your performance. The employer may not refuse to issue a letter, but does have some freedom in the exact wording, as long as the information is correct and not misleading.

With termination by mutual consent (without UWV or court involvement), it is extra important that the reference letter does not contain negative or suggestive remarks. A negative passage can seriously harm your chances in the labour market. Formally, the reference letter is not decisive for your entitlement to unemployment benefits, but in practice a very negative letter may raise questions, especially if it conflicts with the neutral wording used in the settlement agreement.

Employers are usually careful with very positive or very negative statements, because they can be held liable if the reference letter is demonstrably incorrect or misleading. Many organisations therefore opt for a neutral, factual description. Within those limits, there is often room to find a wording that does justice to your contribution and professionalism, without the employer feeling uncomfortable.

• You are legally entitled to a reference letter at the end of employment.
• Even in case of conflict or underperformance the employer must issue one.
• The information must be accurate and not misleading.
• Neutral, factual wording is safest for both parties.

Reference letter in a settlement agreement: what to arrange?

When concluding a settlement agreement, it is wise to explicitly mention the reference letter in your arrangements. This may range from a short clause to a fully drafted text attached as an annex. The more concrete the agreement, the smaller the risk of discussion afterwards. Especially if there has been tension in the relationship, a clear agreement about the reference letter creates calm and certainty.

In practice, settlement agreements often include the following elements regarding the reference letter. The exact wording will depend on the situation, but the basic idea is usually similar. By consciously addressing these topics, you maintain control over how your departure is communicated externally.

• The employer will provide a reference letter upon request.
• The letter will at least state duration of employment, position and a neutral reason for leaving.
• Parties agree on a joint wording for the reason, for example due to reorganisation or a difference of opinion.
• The employer will use the same neutral line in reference calls as in the letter and the settlement agreement.

By recording these points, you create coherence between reference letter, references and the text of the settlement agreement. This helps you present a consistent story to future employers and reduces the chance that a manager will use a different tone in a phone call than was agreed on paper.

What to include (and avoid) in a reference letter after mutual consent dismissal

When you leave through mutual consent, you will usually want to avoid detailed descriptions of conflicts, performance issues or sickness in the reference letter. At the same time the text must remain honest and defensible. Often, a good balance is a neutral wording of the reason for leaving and a positive description of tasks, responsibilities and achievements.

A practical structure is to start with formal details, then describe key responsibilities and results, and end with a short neutral sentence about the reason for termination. Extensive comments on personality or character traits are often unnecessary and may even backfire. Future employers mainly want to know what you did and how you contributed to the organisation.

• Always mention position, department and period of employment.
• Describe core responsibilities and concrete results where possible.
• Use a neutral reason for leaving, such as “by mutual consent”.
• Avoid details on conflicts, improvement plans or sickness absence.

By structuring the letter this way, it becomes a document that is workable and defensible for both you and the employer. It supports your applications without making the employer feel they are concealing crucial information.

Example wordings in reference letter and settlement agreement

Examples make the principles more tangible. Suppose your employment ends for business-economic reasons, for instance due to reorganisation or your role being abolished. In that case, both the settlement agreement and the reference letter can use similar neutral wording, so there is no doubt about your performance.

An example clause in the settlement agreement could be: “Employer and employee establish that the employee’s position ceases to exist due to a structural reorganisation within the organisation. Parties therefore agree by mutual consent to terminate the employment agreement.” In the reference letter, this may be translated into: “The employment agreement was terminated by mutual consent in connection with a reorganisation in which the employee’s position ceased to exist.”

Where there has been a difference of opinion, for example about cooperation or priorities in the role, parties can opt for wording such as: “Parties had a difference of opinion about the way the position was fulfilled. They have therefore decided by mutual consent to terminate the employment.” This is honest yet leaves room for your own explanation in interviews, supported by an outplacement programme that helps you build a strong and positive narrative.

• Ensure the reason for leaving in VSO and reference letter match.
• Use neutral terms such as “by mutual consent” or “difference of opinion”.
• Avoid terms such as “underperformance” unless legally unavoidable.
• Use outplacement coaching to practise your personal story around this wording.

The role of the reference letter in an outplacement programme

Outplacement is guidance towards new work after dismissal. A specialist such as Care4Careers supports you in processing the loss of your job, mapping your strengths and creating a realistic job search profile. Within such a programme, the reference letter is one of the building blocks of your application strategy. Together with your CV, LinkedIn profile and cover letters it forms a coherent whole.

An experienced career coach will always compare the reference letter with the settlement agreement. If dates, job titles and descriptions match, you can approach new employers with more confidence. If there are ambiguities or tensions in the wording, the coach can help you decide whether to reopen the conversation with your former employer or to focus on building a convincing personal story that neutralises potential concerns.

• The reference letter is a key document within your application toolkit.
• A coach helps align the letter with your CV and online profile.
• Ambiguous or negative wording can be offset by a strong narrative.
• A solid outplacement programme addresses both emotional and practical aspects.

Care4Careers frequently supports employees who leave through a settlement agreement in making the best use of their reference letter. Coaching sessions focus on explaining the reason for departure in a short, honest and calm way, so the letter becomes a helpful rather than a harmful element in future job interviews.

How to use the reference letter strategically in negotiations

When negotiating a settlement agreement, most attention tends to go to severance pay, notice period and release from work. Still, it is smart to actively include the reference letter in your strategy. Especially if the employment relationship has been strained, the letter is one of the few instruments you have to limit future damage. Conscious negotiation about this topic is therefore part of a complete approach to your dismissal.

You might, for example, propose a draft text for the reference letter and submit it to your employer. Many employers appreciate it if you take the first step, as they can then respond rather than having to draft everything themselves. Together you can search for wording that is acceptable for both sides. If the atmosphere is tense, a legal adviser or coach can help keep the tone professional and constructive.

• Raise the topic of the reference letter at an early stage.
• Propose a factual, neutral draft text yourself.
• Ensure reason for leaving, letter and references are consistent.
• Use an adviser if necessary to find careful, balanced wording.

Besides the content of the letter, you can also agree who will act as a referee and which line they will follow in reference calls. This can be part of broader negotiations on the VSO, where you not only look at money but also at your future position in the labour market.

UWV, unemployment benefits and the reference letter

With a settlement agreement, it is crucial that your entitlement to unemployment benefits remains intact. UWV will assess whether you have cooperated in your own dismissal and whether the conditions are reasonable. The wording of the settlement agreement is decisive here: the reason for termination, the fictitious notice period and the level of compensation are key elements. The reference letter does not play a formal primary role, but contradictory wording may lead to additional questions.

If the agreement states, for example, that the dismissal is business-economic, while the reference letter mainly refers to underperformance, UWV may see this as inconsistent. It is therefore advisable to align the formulations and, in case of doubt, have the agreement reviewed. A specialist familiar with UWV rules can assess whether the text is appropriate for preserving your benefit rights.

• UWV primarily relies on the settlement agreement, not the letter.
• Contradictions between VSO and letter can trigger questions.
• Neutral reasons for dismissal are usually safest for your benefit claim.
• Legal review can prevent problems before you sign.

Because the legal details can be complex, many employees choose to have their settlement agreement checked before signing, ideally including the arrangements about the reference letter. This ensures all elements fit together and support both your legal position and your future career.

Reference letter, dismissal and your broader career perspective

Dismissal, even by mutual consent, often affects your self-image and view of the future. A carefully drafted reference letter can help you close this chapter and look ahead with more confidence. The document is then not just a formal obligation but also a recognition of your contribution. This is especially meaningful if you have worked for the same employer for many years.

In discussions about dismissal, attention tends to focus on money and timelines. Understandable, but for your long-term career, reputation, references and your own story are just as important. A good reference letter, aligned with a well-drafted settlement agreement and professional outplacement support, offers a solid basis for your next career step.

• A good reference letter supports your confidence after dismissal.
• Reputation, references and narrative are crucial for your future career.
• Outplacement helps bring these elements into alignment.
• A settlement agreement is more than a financial arrangement.

Care4Careers focuses in its outplacement programmes on both the legal and practical side of dismissal and on your personal development and labour market position. The reference letter and arrangements in the settlement agreement are seen as part of a bigger picture: your sustainable employability and future in the labour market.