What Is a Vaststellingsovereenkomst?
A vaststellingsovereenkomst (settlement agreement, or VSO) is the most common way to end employment in the Netherlands by mutual agreement. It's used in approximately 70% of all employment terminations — more than court proceedings and UWV permits combined. The VSO allows both parties to negotiate terms and avoid the uncertainty and cost of legal proceedings.
For employers, the VSO offers control and predictability. For employees, it typically provides a better financial package than a court-ordered dismissal. When done correctly, it's a clean exit for everyone.
Essential Terms Every VSO Must Contain
A well-drafted settlement agreement addresses all aspects of the employment termination:
- Termination date: Must respect the statutory notice period (typically 1-3 months depending on tenure). If the notice period isn't honored, the employee may lose their right to unemployment benefits (WW-uitkering)
- Reason for termination: Always state that the initiative came from the employer for business-economic or work-related reasons. Never attribute blame to the employee — this protects their UWV benefits eligibility
- Severance payment: At minimum, the statutory transition payment (transitievergoeding). In practice, negotiated amounts range from 1× to 2× the statutory amount, depending on circumstances
- Final salary settlement: Outstanding salary, accrued vacation days, pro-rated vakantiegeld (holiday allowance), and any bonus entitlements
- Garden leave (Vrijstelling van werk): Whether the employee works during the notice period or is released with pay. Most VSOs release the employee immediately
- Non-compete and non-solicitation: Whether existing restrictive covenants are maintained, modified, or waived entirely
- Reference letter: Agree on the content and timing of the employment reference
- Mutual final discharge (Finale kwijting): Both parties release each other from all further claims arising from the employment relationship
The 14-Day Cooling-Off Period
Dutch law provides a critical employee protection: the bedenktermijn (cooling-off period). After signing the VSO, the employee has 14 calendar days to revoke the agreement without giving any reason. This cannot be waived or shortened.
- The agreement must explicitly mention this right. If it doesn't, the cooling-off period extends to 21 days
- An employee can only use this right once in every 6-month period — to prevent abuse
- If the employee revokes, the employment relationship continues as if nothing happened
For employers, this means you shouldn't announce the departure externally or begin replacement hiring until the cooling-off period expires.
Protecting Employee WW Benefits
A properly drafted VSO preserves the employee's right to WW (unemployment) benefits. Critical requirements:
- Employer initiative: The termination must be framed as the employer's decision, not a mutual desire or employee request
- No urgent reason: The VSO cannot cite misconduct (dringende reden) — this disqualifies WW benefits
- Notice period compliance: The fictive notice period must be respected. If the statutory period is 2 months but the VSO terminates effective immediately, the employee cannot claim WW for those 2 months
- Seek legal advice: Employees should always have the VSO reviewed by a lawyer. Many employers cover legal costs (typically €750-1,500 ex VAT) as part of the package
