Have you received from your employer a settlement agreement (VSO) and are you wondering whether you should sign it? For many employees, this is a stressful moment. Signing sometimes seems like the quickest way out, but it can have major legal and financial consequences.
In this article, we explain in detail when you should or should not sign a VSO, what risks are involved and how you can avoid losing your rights.
This article is part of our pillar: dismissal with a VSO .
What does signing a VSO mean?
By signing a VSO, you agree to the termination of your employment contract under the terms stated in the agreement. No court or authority will be involved anymore.
That means:
- you agree to the end of your employment;
- you accept the agreed compensation;
- you often waive further claims;
- you (partly) determine your own legal position.
That is precisely why caution is advised.
When is it advisable not to sign (yet)?
It is advisable to not immediately to sign when:
- you do not fully understand the contents;
- it is unclear who is taking the initiative for the termination;
- the compensation feels low;
- there is illness or a conflict involved;
- there are non-compete or non-solicitation clauses included;
- you have doubts about your entitlement to unemployment benefits (WW).
In these situations, legal review is essential.
Practical example: signed too quickly
An employee receives a settlement agreement (VSO) with compensation of one month’s salary and signs immediately out of fear of dismissal. Later it turns out that the employer had no case file and that a much higher compensation was achievable. Problems also arise with unemployment benefits (WW).
Lesson: signing too quickly can cost you a lot of money.
When can it be wise to sign?
Signing can be wise when:
- the terms are legally correct;
- your unemployment benefit entitlement is secured;
- the compensation is reasonable or favorable;
- no unfavorable clauses remain in effect;
- you consciously choose to finalize matters.
Even then, the rule applies: have the proposal checked first.
Signing a VSO and unemployment benefits
A common concern is: will I lose my right to unemployment benefits if I sign?
No, not if the VSO is drafted correctly. It is crucial that:
- the initiative lies with the employer;
- you are not at fault;
- the notice period is properly incorporated.
More information about unemployment benefit conditions can be found at the :contentReference[oaicite:0]{index=0}: uwv.nl – Unemployment benefit (WW)
Cooling-off period after signing
Have you already signed the settlement agreement? Then you are legally entitled to a 14-day cooling-off period. Within that period, you can terminate the agreement without giving a reason.
This cooling-off period must be explicitly stated in the settlement agreement. If not, the cooling-off period is extended.
Pitfalls when signing a settlement agreement
Common pitfalls are:
- overly broad full and final release;
- forgotten bonus or overtime claims;
- surviving non-compete clause;
- unclear end date;
- incorrectly worded reason for dismissal.
These issues often come to light only after the agreement has been signed.
Step-by-step plan: Settlement agreement received – what now?
- Do not sign immediately.
- Read the agreement in full.
- Check eligibility for unemployment benefits.
- Have the settlement agreement legally reviewed.
- Negotiate where possible.
- Only then make a decision.
Read more about negotiating in: Negotiating a settlement agreement
Frequently asked questions about signing a settlement agreement
Am I required to sign a settlement agreement?
No. You are never required to sign.
Can my employer force me?
No. Only through a formal dismissal procedure can dismissal be enforced.
What if I have already signed?
Then you can make use of the 14-day cooling-off period.
Is signing always bad?
No. A well-negotiated VSO can actually be beneficial.
Do I always need to hire a lawyer?
It’s not required, but highly recommended.
Signing a VSO? Have it reviewed first
A settlement agreement determines your future. A quick check in advance can prevent major problems later.
