When an employer fails to comply with a settlement agreement (vaststellingsovereenkomst, VSO), it means that arrangements about, among other things, the end date, payment or outplacement are not being honoured. That can have immediate consequences for your income, your WW rights (unemployment benefit) and your confidence in the rest of the process. In this situation you, as an employee, have more options than is often assumed. In this article you will read, step by step, what you can do and how you can protect yourself both legally and practically.
What exactly is a settlement agreement and why is compliance so important?
A settlement agreement (VSO) is a written agreement with which an employer and employee definitively settle an employment dispute or dismissal matter. Usually it involves dismissal by mutual consent: together you agree on the conditions under which the employment ends. Think of the dismissal date, any severance payment, the notice period and arrangements about exemption from work or guidance towards new employment.
The VSO falls under the Dutch contract law rules in the Civil Code (Burgerlijk Wetboek). This means that both parties must abide by what they have signed, unless the agreement is later legally annulled or dissolved. For an employee, compliance is especially important, because the content of the VSO is often directly connected to the assessment by the UWV (the Dutch employee insurance agency) of your WW benefit. If the employer, for example, changes the agreed end date or reason for dismissal, this can have consequences for your entitlement to benefit.
A well-drafted VSO usually also contains provisions about the transition payment (transitievergoeding), any additional severance payment and sometimes a budget for an outplacement programme. Precisely because the VSO settles many financial and career-related aspects, failing to comply with it can have a major impact on your future. That is why it is important to know exactly what the agreement says and which steps you can take if the employer does not honour it.
- In the VSO you set down arrangements about dismissal and conditions in writing.
- The agreement legally binds both the employer and the employee.
- The content can directly affect your WW and income situation.
- Compliance is crucial for peace of mind, clarity and a careful conclusion.
When does an employer fail to comply with the settlement agreement?
The question “what if my employer does not comply with the settlement agreement” often arises as the first sign that arrangements are not being honoured. Sometimes it concerns clear breaches, sometimes more subtle changes that you only discover later. In both cases it is wise to name concretely what is going wrong and to compare this with the text of the VSO.
Common situations in which an employer fails to comply with the VSO include: the severance payment is not paid or paid late, holiday days or overtime are settled differently than agreed, or the end date of the employment turns out to have been altered in the administration. Failing to grant an agreed outplacement budget or refusing the agreed reference can also be a form of non-compliance.
In addition, you see in practice that employers sometimes still try to formulate the reason for dismissal differently towards the UWV. If the VSO states that it concerns dismissal by mutual consent without any blame attached to you as the employee, but the employer reports something else to the UWV, this can jeopardise your WW rights. That is a serious form of breach, because it directly affects the core of the arrangements.
- Not paying, or paying late, the agreed severance payment.
- Deviating from the agreed end date or notice period.
- Failing to grant an agreed outplacement or training budget.
- A deviating or incorrect report to the UWV about the reason for dismissal.
Legal framework: what does Dutch law say about non-compliance?
Under Dutch employment law, a settlement agreement is in principle binding as soon as both parties have signed and the statutory reflection period after signing has expired. The employer can then not simply escape its obligations. If it does so anyway, there is a breach of contract (wanprestatie): the failure to fulfil a contractual obligation.
If there is a breach of contract, you can serve the employer with a notice of default (ingebrekestelling). This means that you inform the employer in writing that it is not honouring the arrangements and that you give it a reasonable period to remedy this. If the employer does not respond or refuses, you can go to the subdistrict court (kantonrechter) to claim performance, damages or dissolution of the VSO. With a request for dissolution you quickly enter the territory of dissolving a VSO, where the court assesses whether continuation of the agreement is still reasonable.
The distinction between a dispute about interpretation and an actual breach is also important. Sometimes there is discussion about what exactly is meant by a provision, for example about the calculation of the transition payment. In that case general contract law plays a role: the court looks at the text, the intention of the parties and the circumstances of the case. It is therefore essential to have your arrangements set down on paper as concretely as possible.
- A VSO is legally binding after signing and the reflection period.
- Non-compliance by the employer is in principle a breach of contract.
- You can claim performance or damages through the court.
- In serious cases, dissolution of the VSO is sometimes an option.
Direct consequences for your income, WW rights and career
If an employer fails to comply with the settlement agreement, you often notice it first in your wallet. The agreed severance payment does not come, the final salary fails to arrive, or accrued holiday days are not paid out. This can cause financial stress, precisely in a period in which you are busy looking for new work or starting an outplacement programme.
In addition, there can be consequences for your WW. The UWV, the implementing body for the Unemployment Insurance Act (Werkloosheidswet), assesses whether you are culpably unemployed and whether you meet the conditions for a benefit. If the employer provides different information to the UWV than what is stated in the VSO, this can lead to questions or even a rejection. In that case, the text of the VSO and the actual course of events are often examined.
Non-compliance can also be problematic for your career development. Perhaps it was agreed in the VSO that the employer would make an amount available for guidance, for example for an outplacement programme or coaching. If that budget is not paid out or if the employer does not pay the invoices of the career centre, this delays your move to a new position. Precisely in the phase after dismissal, timely guidance is of great value.
- Financial uncertainty due to an absent severance payment or salary.
- Risk of discussions with the UWV about your WW rights.
- Delay in career steps due to an unpaid outplacement budget.
- Extra tension in a period in which you need stability.
Step by step: what can you do if your employer does not comply with the VSO?
When you notice that the employer is not complying with the settlement agreement, acting in a structured way is important. Emotion is understandable, but a calm, documented approach increases your chance of a good solution. First try to reach clarity internally and only then bring in heavier measures.
Start by carefully going through the VSO: check the arrangements about the end date, payments, holiday days, pension and any guidance. List which parts, in your view, are not being honoured and from when. Gather evidence, such as payslips, emails, internal messages and correspondence with HR. This forms the basis for further steps.
Next, contact your employer or HR department and explain concretely which arrangements are not being honoured. Preferably do this by email, so that you have a written trail. If a response fails to come or your request is rejected, you can formally serve the employer with a notice of default. This is usually a letter in which you refer to the VSO, name the breach and give a period to remedy it.
- Read the VSO again and note all relevant provisions.
- Map out which arrangements have concretely been breached.
- Gather evidence such as payslips and emails.
- First seek contact internally, then possibly a formal notice of default.
Legal and practical support: when do you bring in help?
For problems surrounding a VSO, specialist help is often worthwhile. An employment law solicitor or legal adviser can assess whether there is a breach of contract, what chances you have at the subdistrict court and whether it is wise to claim performance or dissolution. Especially when your WW or a substantial severance payment is at stake, a professional assessment is valuable.
In addition to legal support, it can help to have the VSO thoroughly analysed once more. If you have doubts about the content or wording, it is advisable to have the VSO checked by an expert. They can also indicate whether certain provisions, such as penalty clauses or confidentiality clauses, strengthen your position or, on the contrary, limit it if the employer does not comply with the arrangements.
Practically speaking, it is wise to think about your career steps in parallel. When the employer does not comply with the settlement agreement, this can further undermine your confidence in the company. By investigating in good time which positions suit you and what support you need, for example through career guidance or outplacement, you keep control of your next step yourself.
- Bring in employment law help for complex or major disputes.
- Have the content of the VSO reassessed by a specialist.
- Work on your career plan and job applications in parallel.
- Carefully weigh whether you focus on repairing the relationship or on leaving.
Non-compliance and WW: how do you protect your benefit rights?
The link between the settlement agreement and WW is strong in the Netherlands. When assessing an application, the UWV looks not only at the text of the VSO, but also at whether you are culpably unemployed and whether you have made efforts to prevent unemployment. If your employer does not comply with the VSO, this can lead to misunderstandings in the communication with the UWV.
A well-known risk is that the employer gives the UWV a different reason for dismissal than what is stated in the VSO. If the agreement states, for example, that there is a neutral reason, but the employer reports that you underperformed or acted culpably, the UWV can refuse or limit your WW. In such a situation it is useful to know which WW rights in the event of non-compliance apply to you and which steps you can take towards the UWV.
Be careful, therefore, with your WW application. Include the VSO, explain what is going wrong in terms of compliance and keep all correspondence with your employer. It may be necessary to object to a decision by the UWV, for example if they base themselves on a one-sided interpretation by the employer. Good file-keeping and clear substantiation help to protect your position.
- Check whether the reason for dismissal in the VSO and towards the UWV match.
- Keep all documents and emails about the dismissal and the VSO.
- If in doubt, enquire about your rights regarding WW and the VSO.
- Consider objecting if a WW decision deviates from the VSO arrangements.
Amending or dissolving the VSO if the employer does not comply with the arrangements
Sometimes it turns out in practice that a settlement agreement is not properly workable or that circumstances change substantially. Think of a situation in which the employer runs into financial difficulties and indicates that it cannot pay the severance payment. In such cases, renegotiation can be an option, but it is important to do this carefully and with legal support.
If the relationship between you and your employer is seriously disrupted by the non-compliance, dissolution of the VSO can be a realistic route. With a request for dissolution, the court assesses whether continuation of the agreement is still reasonable, given the breaches. The rules and possibilities around dissolving a VSO are complex; the court often looks at a weighing of interests, the seriousness of the breach of contract and the consequences for both parties.
In addition, some settlement agreements contain so-called dissolving conditions in the VSO. These are provisions that stipulate that the agreement lapses if a certain event occurs, for example if the UWV refuses the WW benefit. If such a condition is included, this can influence the question of what must happen when the employer does not comply with the arrangements and what your options are for ending the agreement.
- Renegotiation is possible, but always do this well documented.
- Dissolution through the court is an option in the event of serious breaches.
- Dissolving conditions can affect the validity of the VSO.
- With any changes, always have it checked what this means for your WW.
Outplacement and guidance as part of the VSO
In many settlement agreements, a budget or provision is included for outplacement or career guidance. Outplacement is a programme in which, with professional guidance, you work towards a new job, often through orientation, application training, networking strategies and sometimes retraining. For employees, this offers structure and perspective in an uncertain period after dismissal.
If an employer does not comply with the settlement agreement, this regularly also affects the arrangements about outplacement. Perhaps it was set down that the employer would pay the invoices of the career centre directly, but payment fails to arrive. Or the promised budget is suddenly limited. This is not only annoying for your programme, but also a direct breach of the VSO.
A specialised party such as Care4Careers, which focuses on outplacement, second-track reintegration (re-integratie tweede spoor) and career guidance, sees in practice how important it is that arrangements are clear. When the outplacement budget is part of the VSO, it is wise to set down in advance how high the budget is, how long the programme lasts and in what way the payments are made. This way you prevent your programme from grinding to a halt if the employer does not comply with the settlement agreement.
- Outplacement offers structure and support in the step towards new work.
- Outplacement budgets are often explicitly set down in the VSO.
- Not paying programme costs is a form of non-compliance.
- Clear arrangements about duration, budget and payment prevent disputes.
Pitfalls and disadvantages for the employee in the event of non-compliance
When an employer does not comply with the settlement agreement, hidden risks often come to light that were already embedded in the text of the VSO. Some clauses turn out to work to the disadvantage of employees as soon as a conflict arises. Think of broad final discharge, far-reaching confidentiality clauses or provisions that limit your possibilities of going to court.
In the preparation of a VSO, attention is often already drawn to the disadvantages for the employee. Non-compliance by the employer sometimes makes those disadvantages extra visible. If, for example, you have already waived the right to go to the subdistrict court about the dismissal itself, only a civil procedure remains, aimed at compliance with the VSO. That is legally a different route and can be more complex.
Another pitfall is that employees feel pressured to sign quickly, without overseeing all the consequences. Only when the employer later does not comply with the settlement agreement does it become clear how vulnerable their position is. That is why care in drawing up and checking the VSO is essential, especially if it contains arrangements about payments, WW and outplacement.
- Broad final discharge can limit your possibilities of litigating.
- Strict confidentiality clauses sometimes make it harder to seek help.
- Signing too quickly without advice increases the risk of disadvantageous arrangements.
- Non-compliance often exposes where the VSO was already unbalanced.
How do you prevent problems: points of attention before you sign
Many problems around the situation in which an employer does not comply with the settlement agreement are difficult and costly to remedy afterwards. That is why it is wise to look critically at the content and at the workability of the arrangements even before signing. Those who invest time now in a good VSO often prevent lengthy discussions later.
A first step is to have the VSO legally reviewed. Not only on the level of the payment or the calculation of the transition payment, but also on the wording of the reason for dismissal, the notice period, WW eligibility and the arrangements about guidance. By having the agreement analysed by a specialist, you see earlier where risks lie and which provisions need to be clarified or amended.
In addition, it is wise to explicitly include what happens if a party does not comply with the arrangements. Think of a clear payment term with possibly an interest or penalty provision in the event of late payment. You can also set down how disputes are resolved and whether the parties first try to reach a solution through mediation. Such provisions provide something to hold on to if a dispute does arise later.
- Have the VSO reviewed in advance for legal and practical workability.
- Pay attention to the reason for dismissal, WW eligibility and payments.
- Set down what happens in the event of late payment or non-compliance.
- Consider arrangements about mediation or another form of dispute resolution.
In summary: keeping control if the employer does not follow the VSO
When an employer does not comply with the settlement agreement, this affects both your financial position and your future prospects. By looking carefully at the text of the VSO, naming the breach concretely and, where necessary, bringing in both legal and career support, you can regain a grip on the situation. Dutch employment law offers various possibilities to enforce compliance or to amend or dissolve the agreement.
At the same time, it remains important to look ahead. A carefully arranged dismissal, with attention to WW, payments and guidance towards new work, means you can recover more quickly and experience perspective again. Whether you opt for a new employment, a retraining programme or self-employment: a well-executed settlement agreement and a reliable outplacement or career programme give you the room to make that choice in a considered way.
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.