Introduction
Offering a settlement agreement requires care on the part of employers. An ill-considered approach can lead to legal risks, such as annulment of the agreement or loss of benefit rights for the employee. This blog discusses three important points to consider to avoid problems.
Do not immediately offer a settlement agreement as an alternative to improvement
When an employee is not performing optimally, it is wise to first discuss areas for improvement. If an employer immediately offers a settlement agreement (VSO) without a serious attempt at improvement, a judge may later be critical of this. The question then becomes whether the employee really got a fair chance to improve his performance. It is better to bring up the possibility of a VSO only when the employee himself indicates that he is interested in it. This creates a more voluntary and defensible process.
Exercise caution in case of illness
Entering into a VSO with an employee who is sick carries significant risks. An employee runs the risk of losing his right to sickness or unemployment benefits. For the employer, there is a risk that the employee will subsequently annul the agreement due to defects of will, such as error or abuse of circumstances. To mitigate these risks, it is essential to inform the employee comprehensively and in writing about the legal consequences of termination.
Check whether an administrator must consent
If an employee is under receivership, it may be necessary to obtain the consent of the receiver before entering into a settlement agreement. Absent this consent, the agreement may be void. Employers should therefore always check whether the employee is under administration and, if necessary, involve the administrator in the process to avoid later problems.
Conclusion
A settlement agreement can be a good solution, but requires a careful approach. Employers must first offer serious improvement programs, be extra vigilant about illness and check whether a trustee must agree. Clear communication and accurate checks are essential to mitigate risk.
This blog was written by Mr. Stijn Blom, employment lawyer at Arbeidsadvocaat.nl B.V. Stijn has extensive experience in employment law and assists entrepreneurs daily with a wide range of employment-related matters. From dismissal cases to drafting watertight contracts and policies – with his practical and personal approach, he helps employers and employees move forward. Want to know more?Visit Stijn's page.
Arbeidsadvocaat.nl is happy to think with you if you have questions about a settlement agreement. Please feel free to contact us .
April 2025
