Settlement Agreement Dutch Law


You are entitled to legal advice on your transaction contract in order to avoid discussions and legal proceedings after the fact. This means that the parties can enter into a transaction agreement to avoid or end an ongoing uncertainty or dispute. Many transaction agreements are concluded as a result of transaction negotiations, a personal appearance by the parties (hearing) in litigation or by other means. If, in a transaction agreement, one party does not comply with an obligation (commitment) of this agreement, the other party is in principle entitled to terminate all or part of the transaction contract or to demand compliance with the agreement in court. In addition, it is customary for employers and workers to agree that the worker should be exempt from work as soon as the parties have entered into the transaction agreement and the worker has left his or her job. This prevents the employer from having a worker in the workplace who is no longer motivated to work, while the worker has the opportunity to look for another role elsewhere. In return, although they are entitled to pay for their remaining leave after the termination of their employment contract, the parties often agree that each leave is considered taken during the gardening holidays. When a employment relationship ends at the employer`s initiative, a worker is entitled to a transition fee under Dutch law. The transitional tax is a legal right that has replaced the sub-circumscription tribunal formula, as it used to be called. As of January 1, 2020, this fee applies from the first working day and regardless of the duration of the employment and is accumulated at the rate of 3rd month`s salary per year of service. However, when another calculation or provision is stipulated in a collective agreement, the worker is bound by such a provision of the collective agreement (although it should be less favourable).

Various tools are available online for the calculation of transition fees, for example on the Dutch website ontslag.nl. A transaction contract may then be offered to employees who express an interest in the company`s voluntary departure program. In general, the final discharge is the settlement agreement to be concluded. In this section, employers and employees confirm that once the SA agreements have been passed, there are no other rights against each other.