Dismissal with a VSO: what does this mean and what should you watch out for?
Has your employer proposed ending your employment with a settlement agreement (VSO)? If so, that often comes as a surprise. Many employees wonder whether they should sign, what their rights are, and whether they will lose their right to benefits by doing so.
A dismissal with a VSO may seem straightforward at first glance, but the consequences are significant. The contents of the agreement determine your income, your benefit entitlements, and sometimes even your chances of finding a new job.
In this comprehensive article, we explain step by step:
- what a VSO is and why employers offer it;
- what you need to watch out for legally;
- what you can negotiate;
- how WW and compensation work;
- what often goes wrong in practice.
For general information about dismissal, you can also consult our page on employment law consult.
What is a settlement agreement (VSO)?
A settlement agreement is an agreement in which employer and employee jointly agree that the employment ends. In a dismissal with a VSO, no permission from the UWV and no ruling from the subdistrict court required.
In almost every settlement agreement, agreements are set out regarding:
- the end date of the employment;
- the reason for termination;
- the amount of the severance payment;
- outstanding vacation days;
- release from work;
- full and final settlement.
Precisely because a judge does not review it, it is important that you yourself (or with help) check whether the agreements are legally correct.
Why does an employer offer a settlement agreement?
Employers often choose a settlement agreement because:
- a formal dismissal procedure is uncertain;
- litigation costs time and money;
- they want to keep control over the terms;
- they want to avoid reputational damage or conflicts.
A VSO is therefore often a strategic choice for the employer. That also means that in many cases there is room to negotiate.
Do you have to sign a VSO?
No. You are never required to sign a settlement agreement. Once you sign, you agree to all the consequences.
Many employees sign too quickly, for example out of fear of dismissal or because they think there is no alternative. That is rarely true.
Note: after signing you still have 14 days’ cooling-off period to terminate the agreement without giving a reason.
Step-by-step plan: what should you do in a dismissal with a VSO?
- Do not sign the VSO immediately.
- Check who is initiating the dismissal.
- Have the notice period legally reviewed.
- Check whether the compensation is reasonable.
- Check that the wording is safe for unemployment benefits.
- Negotiate where possible.
These very steps determine whether you will later have problems with income or benefits.
Dismissal with a settlement agreement and unemployment benefit
A frequently asked question is whether, after a dismissal with a settlement agreement, you are entitled to unemployment benefit. That is possible, but only if certain conditions are met.
The UWV assesses, among other things:
- whether the initiative lies with the employer;
- whether you are not at fault;
- whether the correct notice period has been applied.
More information about this can be found at: uwv.nl – Unemployment benefit (WW)
Case study: WW at risk
An employee receives a settlement agreement (VSO) stating that the parties “are parting ways by mutual consent”. After signing, the UWV denies the WW benefit because it is not clear that the initiative came from the employer.
Lesson: one sentence can make the difference between having or not having an income.
What compensation can you receive?
In a dismissal with a settlement agreement (VSO), a payment is often agreed. This is not an automatic transition payment, but a negotiated severance payment.
In practice, we see that compensation may consist of:
- an amount equal to the transition payment;
- a higher severance for long service;
- reimbursement of legal costs;
- continued payment until a later end date.
Practical example: successful negotiation
An employee is initially offered one month’s salary. After legal consultation, this is increased to four months’ salary, including reimbursement of attorney’s fees.
Lesson: the first offer is rarely the final offer.
Final release: what does that mean?
In almost every VSO there is a clause on final release. By this, the parties declare that after signing they no longer have any claims against each other.
This can have far-reaching consequences, for example for bonus, overtime, or claims afterwards.
Frequently asked questions about dismissal with VSO
Can I refuse a settlement agreement?
Yes. You are never required to sign.
How long is my cooling-off period?
14 days after signing.
Do I always qualify for unemployment benefits?
No. It depends on the terms of the agreement.
Is a settlement agreement better than dismissal via the UWV?
That depends on the terms. Sometimes yes, sometimes no.
Does my employer have to reimburse my legal fees?
It is not mandatory, but it is often negotiable.
Can I still take legal action later?
After a final release, usually not.
Dismissal with a settlement agreement? Always have this reviewed
A settlement agreement determines your financial future. A quick legal review can make the difference between certainty and long-term problems.
