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Settlement agreement
Termination by mutual agreement: settlement agreement
A settlement agreement (also known as a termination agreement) is a common way to end an employment contract in the Netherlands by mutual agreement. Employer and employee mutually agree to terminate the employment contract. This way offers both parties flexibility and can be a quick, conflict-free solution when ending an employment relationship.
Content of a settlement agreement
The contents of a settlement agreement include agreements on:
- The end date of employment;
- Severance pay;
- Agreements on a notice period;
- Any exemption from work;
- Outplacement compensation;
- Waiving of the non-competition and/or non-solicitation clause.
The agreements should be clearly and fully recorded so that no ambiguities or legal disputes arise after termination.
Why is an attorney important for the employee?
For the employee, an attorney is crucial to ensure legal control of the settlement agreement.
- Ensure the employee’s rights, such as securing an entitlement to unemployment benefits. If the agreement is drafted incorrectly, it could lead to loss of benefit entitlement.
- Advise on severance pay and negotiate for fair compensation.
- Assess the legal risks of the settlement agreement so that the employee is not bound by unfavourable or incomplete terms.
- Ensuring withdrawal period, so that the employee can rescind the agreement within 14 days if he or she has second thoughts.
Why an attorney is important for the employers?
For employers, engaging an attorney is equally important.
- Assisting in the proper wording of the settlement agreement to ensure it meets legal requirements.
- Prevent disputes by ensuring the agreements are clear and legally binding.
- Help mitigate financial risks, such as unnecessarily high compensation or an employee coming back later with legal claims.
- Advise on the tax implications and other legal aspects so that the termination goes smoothly and without unexpected costs.
Conclusion
A settlement agreement can be an efficient way to end an employment relationship, but the legal consequences are significant. It is very important for both employer and employee to engage an attorney in time, so that the agreement is drafted correctly, no rights are infringed, and legal complications are avoided.
Specialist in settlement agreements: expert advice and guidance
As an experienced employment attorney in Amsterdam, I specialise in preparing, assessing and negotiating settlement agreements. I will be happy to help you reach an agreement that does justice to your situation and safeguards your best interests. Do you need advice on a settlement agreement? Contact me; I offer expert and accessible personalised guidance.
The information on this page is for informational purposes only and should not be considered specific legal advice. For personalized advice, please contact Ok Legal. Please note that the content of this page may change without notice and Ok Legal is not liable for any inaccuracies and/or missing information.
