Are you facing a settlement agreement? If so, in many cases you are entitled to severance pay. Such compensation is not required by law, but is often offered to end the employment by mutual agreement. What constitutes reasonable compensation varies from situation to situation, which is precisely why it is important to know what you are entitled to. We will be happy to explain how severance pay works in a VSO, what the difference is with a transfer fee, how to calculate the amount and how to get more out of the proposal.
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Fast forward to
- In brief: what is a settlement agreement?
- Compensation in a settlement agreement: what are you entitled to?
- What is the difference between severance pay and transition pay?
- Which is better: a severance payment in a VSO or a transfer payment?
- Tips on negotiating severance pay
- What are common mistakes during the negotiation process?
- 95% chance of a better dismissal deal with a free VSO check
- Get assistance from our dismissal lawyers during the negotiation process
- Who are we?
- Our strength
- Read more about settlement agreements
- Frequently asked questions on compensation in a settlement agreement
In brief: what is a settlement agreement?
A settlement agreement is a written agreement between an employer and an employee to terminate employment. This agreement contains all the terms of the dismissal, such as the termination date, severance pay and other agreements. Both parties must agree on the content and sign the agreement.
Compensation in a settlement agreement: what are you entitled to?
A settlement agreement (VSO) is a termination of your employment by mutual consent. In such a situation, severance pay is not mandatory, but is common. Employers often offer financial compensation to make the employee's departure go smoothly, avoid possible legal conflicts and accommodate the employee's loss of income. The amount of that compensation is not fixed by law and depends on several factors, such as your years of service, age, position, any performance problems, whether there is culpability and how well you get legal support.
What is the difference between severance pay and transition pay?
The terms severance pay and transition payment are often used interchangeably, but do not mean exactly the same thing. A transition allowance is a legally defined compensation to which you are entitled if your employer terminates your employment, for example through the UWV or the cantonal court. A severance pay is only possible at dismissal by mutual agreement.
Compensation for dismissal by mutual consent
- No legal requirement, but common in a VSO
- Achieved through negotiation
- May be equal to or higher than the transitional allowance
- May include additional agreements, such as exemption from work or reimbursement of legal fees
- Also scope for payment of bonuses, holidays, company car etc.
- Only possible in case of dismissal by mutual consent
- Can be paid net or gross, depending on arrangements
What is a reasonable severance payment?
The amount of severance pay in a settlement agreement depends on your situation. The statutory transitional compensation is 1/3 monthly salary per year worked, but in a settlement agreement, the compensation is often higher. In practice, we see that compensation of 1/2 a month's salary or more per year worked is regularly agreed.
The final amount depends partly on how strong your employer's legal position is or whether a dismissal file has been built up and how badly you have been affected by the dismissal. This is precisely why many people engage a lawyer in, who knows what is reasonable and how to get the most out of your scheme.
Severance pay (statutory)
- Established by law (Civil Code)
- Compensation in case of dismissal through UWV or the cantonal court
- Mandatory calculation based on age, years of service and monthly salary
- No negotiation possible on height
- Always paid gross
- Employer is obliged to pay it (unless employee resigns himself)
- No allowance for legal fees included
Curious about the level of your transition allowance? Have it calculated free of charge and without obligation via the button.
Which is better: a severance payment in a VSO or a transfer payment?
A severance payment under a VSO is usually more favourable than the transitional compensation. The transitional compensation is fixed by law and non-negotiable. With a VSO, on the other hand, you can negotiate on the amount and conditions, often making the compensation higher and better suited to your situation.
Tips on negotiating severance pay
When concluding a settlement agreement, employers may firmly insist on a quick signature. Do not let this put pressure on you. Take time to define your position and seek legal help to guard your rights. Some tips to be stronger in the negotiation process:
- Stay calm and patient, even when the pressure is on
- Never sign under time pressure, always ask for reflection time
- Be realistic in your counter-proposal, but leave room for improvement
- Know the risks, for example for your unemployment benefit or in case of culpable dismissal
- Show willingness to remain employed if conditions are inadequate
- Refusing or walking away is allowed, especially if the proposal is unfair
What are common mistakes during the negotiation process?
Many employees make the same mistakes while negotiating their settlement agreement, often out of uncertainty or time pressure. They agree to the first proposal too quickly, without seeking legal advice. We also regularly see people making counterproposals that are too high or too low, causing negotiations to stagnate or yield too little. Another pitfall is not properly understanding the legal consequences. Think of losing the right to a WW benefit or missing out on compensation for outstanding holidays. In addition, many people forget to also negotiate a legal budget, even though this can give them the space to hire a lawyer at no cost.
95% chance of a better dismissal deal with a free VSO check
In doubt about your employer's proposal? Have your settlement agreement checked by an experienced lawyer free of charge. In 95% of cases, we succeed in achieving a better dismissal settlement, at no cost to you.
Get assistance from our dismissal lawyers during the negotiation process
Does our free VSO check show that there is room for better terms? Then our dismissal lawyers are ready to act on your behalf negotiate. In 98% of cases, this assistance will cost you nothing, as the legal costs are usually reimbursed by the employer. If this is not the case, we will find a way to still recover the costs from the employer. We negotiate the amount of severance pay, the notice period and additional arrangements, including reimbursement of legal costs, among other things. Is the deal done? Then we ensure a proper completion and remain available for all your questions.
Who are we?
Behind Transition fee calculator.co.uk stands employment lawyer Robin Sieverdink. Even while studying law, he noticed how often employees came under pressure without knowing their rights. It was precisely for this group that he wanted to make his case. Since then, he has been helping people facing dismissal every day and looking for help. We take the time to listen and look for solutions that really make sense. Our services are low-threshold, personal and in most cases completely free of charge, because employers often make a budget available for legal support.
With over 15 years of experience and specialist knowledge, in 95% of cases we ensure that clients finish their employment with a better settlement.
Our strength
- We listen carefully to your story so that we know exactly what you need and can represent your best interests.
- In 95% of cases, we provide a better dismissal scheme than the first proposal.
- During the free consultation, we give a clear and honest assessment of your options.
- We will keep you informed step by step about the progress of your case.
- Your rights, such as to unemployment or holidays, are carefully guarded.
- You get expert legal help, with no surprises afterwards.
Read more about settlement agreements
Frequently asked questions on compensation in a settlement agreement
That is certainly allowed. We even advise doing so. The settlement agreement was drawn up by the employer. Are all the agreements on paper correct as you have agreed? And do you get everything out of the agreement financially? Get your VSO checked for free
Our employment lawyer checks your offered VSO free of charge.
You are entitled to severance pay if you leave your job by agreement with your employer through a settlement agreement. This compensation is negotiable and intended to compensate you for losing your job.
No, severance pay is not mandatory. But in practice, it is often offered to smooth the dismissal. You can negotiate about this and our lawyers will be happy to help you.
It depends on your situation and how well it is negotiated. The statutory transitional compensation amounts to about 1/3 monthly salary per year worked. With a settlement agreement, the severance pay is often higher, 1/2 monthly salary per year worked or more is no exception. The exact amount depends on your years of service, age, position and whether a file has been built up, for example.
If your employer terminates your employment through the UWV or the subdistrict court, you are legally entitled to a transitional payment. With a VSO, this is not mandatory, but is often taken as a starting point for negotiations.
A severance payment under a VSO is often more favourable than the transitional compensation because you can negotiate it. The transition compensation is fixed by law and non-negotiable.
Checking your settlement agreement with us is completely free of charge. Do you send the VSO on a working day before 17:30? Then you will receive personal advice within 30 minutes, with no obligation.