What to do if your employer offers a settlement agreement?
A settlement agreement, also known as a termination agreement, is often offered when an employer wants to end employment. This document can be a practical way for both employee and employer to end employment, but it is important to review the offer carefully. This article discusses 10 crucial tips that can help employees ensure a fair agreement and protect their rights.
1. Do not sign the agreement immediately
A common mistake is to sign the settlement agreement immediately. It is important to take the time to read and understand the agreement carefully. It may contain terms that will cause problems later.
2. Negotiate the first proposal
The first draft of a settlement agreement is often a starting point for negotiations. Employers often offer basic compensation and terms, but there is often room to improve these terms. Negotiate higher severance pay, longer notice or other benefits.
3. Check that your right to WW is guaranteed
An important issue is whether you are entitled to unemployment benefits after the termination of your employment. Make sure the agreement does not affect your entitlement to WW benefits. Sometimes a settlement agreement includes a penalty for claiming WW, which may limit your entitlement.
4. Check that the end date is correct
It is essential to check that the notice period has been correctly applied. The end date must correspond to the statutory notice period or the term stated in your employment contract. This will avoid problems when calculating your severance pay.
5. Check whether severance pay is reasonable
Severance pay should be reasonable and in line with the circumstances of your dismissal. This may depend on your years of service, position and reason for dismissal. In some cases, negotiating higher compensation may be advantageous.
6. Ill? Don't just agree to the settlement agreement
If you are sick , it can be risky to agree to a settlement agreement right away. You are entitled to continued pay during illness, and it may be better to consult with an employment law attorney to determine the best course of action.
7. Drop the non-compete and/or non-solicitation clause
Check whether a non-competeor non-solicitation clause is enforced in the agreement. This can limit your future work opportunities. It is often possible to drop these clauses in the agreement.
8. Consider payment of vacation days and other wage components
Upon termination of your employment, outstanding vacation days and other compensation (such as bonuses or overtime) must be paid properly. This should be clearly stated in the settlement agreement.
9. Ask for support in finding a new job
Many employers offer help to employees who lose their jobs, such as through outplacement assistance or a training budget. This can be of great value in finding a new job.
10. Enlist legal support
It is always wise to consult an employment lawyer or legal expert when receiving a settlement agreement. A legal expert can help safeguard your rights and advise you on the best way to approach the agreement.
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
