When not signing a Dutch settlement agreement is wiser

Not signing a settlement agreement (vaststellingsovereenkomst, VSO) means you deliberately decide not to consent to a proposed termination of your employment contract. You then formally keep the current situation intact and force your employer to choose another route, for example via the UWV (the Dutch employee insurance agency) or the subdistrict court. This can strongly influence your position, your unemployment benefit (WW) rights and your room for negotiation. In this article you will read when not signing can be wise, what the risks are and how outplacement can help you look ahead with confidence after all.

What exactly is a settlement agreement?

A settlement agreement (also known as a VSO) is a written arrangement between employer and employee that governs the ending of the employment. Legally speaking, it is an agreement that records and resolves an uncertainty or dispute. In an employment law context, it usually concerns dismissal with arrangements about the end date, compensation, exemption from work and references.

With such a settlement agreement, the parties agree that the employment ends by mutual consent. That is different from dismissal via the UWV or the subdistrict court, where an official dismissal procedure runs and a third party assesses whether the dismissal is justified. Because that external assessment is missing, it is all the more important that the arrangements in the VSO are correct and that your interests are properly safeguarded.

Precisely because you sign it yourself, the UWV may later rule that you became culpably unemployed if the arrangements are not properly worded. That is why the question of whether or not you should sign a settlement agreement is much more than a formality. It is about income, career prospects and legal certainty.

• With a VSO you end the contract in consultation with your employer.
• There is no judge or UWV that assesses in advance whether the dismissal is justified.
• The wording in the VSO is crucial for your right to unemployment benefit (WW).
• Not signing means your employment contract simply continues to exist.

What does it mean not to sign a settlement agreement?

Not signing a settlement agreement first of all means that you are not obliged to do anything. Under Dutch employment law, an employee is never obliged to sign a VSO. You may refuse, request a postponement, propose changes or first obtain legal and career advice. Your employer may apply pressure, but may not threaten or mislead you.

If you do not sign, the employment contract in principle simply continues. You then keep your salary, your work and your other terms of employment, unless other legal steps are taken. If your employer still wants to terminate, they will have to go to the UWV (for example on economic grounds) or to the subdistrict court (for example in the case of a disrupted working relationship).

Not signing can strengthen your negotiating position, because a procedure costs the employer time, money and uncertainty. At the same time, the relationship may deteriorate and tension in the workplace may increase. The choice not to sign is therefore both a legal and a career decision.

• You are never obliged to accept a VSO.
• Without a signature, your employment simply continues to exist.
• The employer must then choose another dismissal route.
• Your choice has consequences for your career and working relationship.

When is not signing a settlement agreement wise?

There are clear situations in which not signing a settlement agreement is often the wisest choice. That applies, for example, if you are ill, if the reason for dismissal is incorrect or if the financial arrangements are far below the statutory standard. In such cases you take an unnecessary risk if you agree anyway.

If you are (partially) unfit for work, the rules of the Gatekeeper Improvement Act (Wet verbetering poortwachter) apply. Employer and employee then have a joint reintegration obligation. A VSO during illness can have consequences for your right to a WIA benefit and for the assessment by the UWV. In many cases it is safer for sick employees not to sign and first to seek proper legal and reintegration advice.

Also when you do not recognise the reason for dismissal, for example when there is talk of underperformance without a file, or of a reorganisation (reorganisatie) without clear substantiation, caution is wise. In such situations, refusing to sign can lead to the employer having to explain their position to the UWV or the court, which often results in a fairer outcome.

• In the case of illness or reintegration in track 1 or the second track (spoor 2).
• If the reason for dismissal is incorrect or insufficiently substantiated.
• When the compensation is considerably lower than the transition payment (transitievergoeding).
• If you have to decide under pressure or in an emotional state.

Legal points of attention: WW, WIA and the dismissal route

When choosing not to sign a settlement agreement, your benefit rights play a major role. The UWV, the implementing body for employee insurance schemes in the Netherlands, assesses when you apply for unemployment benefit (WW) whether you became involuntarily unemployed. The wording in the VSO and the actual dismissal route are decisive in this.

Under the WW rules, the initiative for the dismissal must lie with the employer and you may not be blamed for your unemployment. In many cases, a carefully drafted VSO is a safe route to retain your WW rights. But if the text is unfavourable, for example if you would be resigning yourself or agreeing to an unreasonable reason, not signing may actually be better.

For employees who are ill for a long time and may be eligible for a WIA benefit, the situation is even more sensitive. The WIA (Wet werk en inkomen naar arbeidsvermogen, the Work and Income according to Labour Capacity Act) assesses your incapacity for work after a period of long-term illness. A too-hasty termination via a VSO may be seen by the UWV as cutting across reintegration obligations, with the risk of sanctions.

• The UWV assesses whether you became involuntarily unemployed.
• The text of the VSO often determines your right to WW.
• In the case of long-term illness, the WIA assessment plays a major role.
• Not signing can be safer than a carelessly drafted VSO.

Emotion, pressure and reflection time: how do you keep your composure?

Many employees are unexpectedly presented with a settlement agreement. A conversation that begins as an appraisal sometimes ends with a proposal to terminate. That triggers emotions: shock, anger, uncertainty. It is precisely then that there is a strong chance you will want to decide too quickly, whereas not signing a settlement agreement can at that moment be an important protective measure.

The law gives you at least fourteen days of statutory reflection time if you sign a VSO, but you may also allow yourself that same composure before you sign at all. You never have to accept a proposal immediately. You may take it away, discuss it with a lawyer, trade union or career coach and only then respond. The 14 days of reflection time help to prevent hasty decisions.

There are situations in which employees feel they are signing under pressure. For example, when the employer says that the offer will otherwise lapse, or that it will only get worse later on. Such statements are often intended to create momentum. Legally, your basic rights do not change because of this. Taking your time, not signing and first seeking advice is then often the wisest step.

• Do not let yourself be rushed into an immediate signature.
• Use your statutory reflection time to your advantage.
• Seek advice from a legal expert or career coach.
• Refuse to sign if you feel you are being put under pressure.

Not signing yet still talking: negotiating better terms

Not signing a settlement agreement does not mean the conversation stops there. Often it is precisely a starting point for better negotiations. By indicating that you do not agree under the current terms, you make it clear that adjustments are needed to arrive at a balanced arrangement.

You might think of improvements to the severance compensation, the end date, the inclusion of a contribution towards an outplacement programme, the removal of a non-competition clause (concurrentiebeding) or the recording of a positive reference. Those who know how they want things to end up can negotiate in a more targeted way. You often stand stronger if you clearly indicate that you are, if necessary, prepared to wait for the formal dismissal route.

For employees, it is helpful to combine standing strong in negotiations with a view to the future. A good VSO is not only about money, but also about opportunities for new work, for example via outplacement, support with job applications and career orientation. By not signing straight away, you create room to still include this kind of arrangement in the agreement.

• Not signing can be a starting point for serious negotiations.
• You can ask for better financial and practical terms.
• You can have outplacement and career guidance explicitly included.
• A clear lower limit strengthens your negotiating position.

The role of outplacement if you do not sign (or later sign after all)

Outplacement is guidance from work to work after (impeding) dismissal. An outplacement programme helps you to process the consequences of dismissal, map out your qualities and search in a targeted way for suitable new work. For many employees it is an important link between the ending of the employment and a new, sustainable job.

When you do not sign a settlement agreement, that does not mean you have no need for career guidance. On the contrary: it is precisely in an uncertain phase that professional support can help you keep an overview. A programme with a specialist such as Care4Careers can, for example, help you explore scenarios: staying, negotiating a departure with outplacement, or looking for another job yourself while you are still employed.

If an agreement is ultimately reached after all, you can agree with your employer that they will reimburse part of the costs of an outplacement programme. Employers often do this because it helps them to say goodbye in a respectful way and because it reduces the chance of an employee ending up in a long-term benefit situation. A well-organised outplacement programme gives you as an employee more grip on your future, regardless of whether you sign the VSO now or not.

• Outplacement supports the step from dismissal to new work.
• Even without a signed VSO, you can make use of career guidance.
• Employers are often willing to contribute to outplacement.
• A programme increases your chances of sustainable, suitable work.

Examples: when not signing was wise (and when it was not)

A practical example: an employee with a permanent contract is told that their position is being cut due to a reorganisation. The VSO offered contains compensation that is lower than the statutory transition payment and no arrangement whatsoever about guidance towards other work. The employee decides not to sign the settlement agreement and first seeks advice. After consulting a legal adviser and a career coach, a new arrangement is agreed with higher compensation as well as outplacement guidance.

Another example: an employee has been ill for a long time and is in the middle of a reintegration programme in the second track. The employer proposes a VSO to end the employment, without a clear explanation of the consequences for WIA and WW. The employee feels uncertain and decides not to sign. After assessment by an expert third party, it turns out that termination at that moment would pose major risks for their benefit position. In this case, not signing prevented the employee from ending up in financial difficulty.

There are also situations in which someone later regrets not signing. For example, when the relationship is so disrupted that working together is no longer realistic, while the arrangement offered was actually reasonable. In that case, a long, tense period may follow, sometimes still ending in dismissal via the court, on less favourable terms. This illustrates that the choice of whether or not to sign must always be viewed in the context of your own situation.

• Not signing can lead to a better arrangement.
• In the case of illness, refusing can prevent major financial risks.
• Rejecting a reasonable VSO can sometimes lead to a worse outcome.
• Every case calls for a careful, individual assessment.

Step-by-step plan: what do you do if you (for now) do not want to sign?

When you do not want to sign the settlement agreement, a structured approach helps. This way you keep an overview and prevent yourself from acting out of emotion. A first step is to calmly confirm that you have received the proposal and that you need time to have it assessed. In doing so, you keep the relationship professional and take control of the process.

Next, it is wise to have the content checked legally. You can have your settlement agreement checked by an employment law specialist or trade union. Among other things, they look at the wording of the reason for dismissal, the end date, the compensation, non-competition clauses and the consequences for WW and WIA. In parallel, you can explore with a career coach which scenarios suit you best in the longer term.

After that you determine your strategy: refuse outright, negotiate adjustments or sign after all under conditions. In every scenario it is important that you understand what it means for your income, your benefit rights, your career opportunities and your well-being. Your choice not to sign the settlement agreement is then not a reflex, but a deliberate step in your career.

• Take the proposal away and do not respond immediately in the conversation.
• Have the VSO checked legally and on its content.
• Explore career scenarios with an independent coach.
• Then choose deliberately: refuse, adjust or sign under conditions.

Conclusion: not signing as a starting point for deliberate choices

Not signing a settlement agreement is not a refusal out of stubbornness, but can be a deliberate choice to protect your legal position, your health and your career. By not signing straight away, you create room to have the content assessed, to map out your rights and to investigate which outcome really suits you. That may mean you eventually agree after all, but then on the basis of better terms and with a view to a new perspective.

Under Dutch employment law, you as an employee have the right not to sign a VSO and to obtain expert advice before you make a decision. Organisations such as the UWV later assess whether you are entitled to WW or WIA, which means the choices you make now have major consequences. A combination of legal advice, good information about dismissal and benefits, and professional career guidance helps you to stay at the wheel yourself even in a difficult phase.

Whether you decide not to sign a settlement agreement, to renegotiate or ultimately to agree after all: it always comes down to the same core question. How do you ensure that you come out of this situation well, both legally and personally, with realistic chances of new, suitable work and a stable future.

Are you in doubt about what your VSO says? Have your settlement agreement checked by an expert from Care4Careers, so you can be sure you are not overlooking anything.