Dismissal in the Netherlands – 100 frequently asked questions 2026
Dismissal , Settlement Agreements, Severance Pay & Unemployment Benefits in the Netherlands Explained
I. Settlement Agreement (VSO) & Legal Basics
What is a settlement agreement (VSO) in the Netherlands?
A settlement agreement (vaststellingsovereenkomst or VSO) is a written agreement in which employer and employee mutually agree to terminate the employment contract. It replaces dismissal via the UWV or the Dutch courts and is the most common dismissal route in the Netherlands.
Why do employers offer a settlement agreement instead of formal dismissal?
Employers prefer a VSO because it avoids lengthy, uncertain, and costly procedures. A settlement agreement gives both parties control over the terms and timing of termination.
Am I obliged to accept a settlement agreement?
No. You are never required to accept a settlement agreement. Until you sign, your employment contract remains fully in force and salary must continue to be paid.
Is a settlement agreement negotiable?
Yes. A settlement agreement is always negotiable. Severance pay, notice period, legal costs, non-compete clauses and references are all subject to negotiation.
Can I negotiate a higher severance payment?
Yes. In practice, severance payments above the statutory transition compensation are common, especially where the employer’s legal position is weak.
Is a verbal agreement about dismissal legally valid?
No. A settlement agreement is only legally valid if it is agreed in writing and signed by both parties.
What is the statutory cooling-off period after signing a VSO?
You have a statutory cooling-off period of 14 days after signing. If this right is not mentioned in writing, the period is extended to 21 days.
Can I withdraw from a settlement agreement after signing?
Yes. Within the cooling-off period you may withdraw without giving reasons, provided you do so in writing.
Who pays the legal costs in a settlement agreement?
It is customary for the employer to reimburse the employee’s legal costs. This is usually included as a fixed budget in the agreement.
What does “final settlement” or “final discharge” mean?
Final settlement means that after termination, neither party can make any further legal or financial claims against the other.
Should I agree to final settlement if I still have claims?
No. You should never agree to final settlement if salary, bonuses, overtime or other entitlements have not been fully settled.
Can my non-competition clause be waived in a settlement agreement?
Yes. Non-competition and non-solicitation clauses can be waived or limited and this is standard practice in settlement negotiations.
Can I look for a new job before signing a settlement agreement?
Yes. However, disclosing that you already have a new job may weaken your negotiating position.
Can I receive a reference letter as part of the agreement?
Yes. A positive reference letter and reference arrangements can and should be included in the settlement agreement.
What happens if my employer does not comply with the agreement?
A signed settlement agreement is legally binding. If the employer does not comply, enforcement via legal action is possible.
Do you need help with your dismissal? Contact our dismissal specialists immediately. The first consultation is free. Call 020 6160 120 or :
II. Severance Pay & Financial Compensation
What is statutory severance pay in the Netherlands?
Statutory severance pay (transition compensation) equals one-third of a monthly salary per year of service, calculated from the first day of employment.
What salary components count toward severance pay?
Base salary, holiday allowance, fixed bonuses and structural allowances are included in the calculation.
Is severance pay mandatory?
Yes, if the employment contract is terminated at the employer’s initiative and statutory conditions are met.
Do I receive severance pay if I resign myself?
In principle, no. Resignation usually leads to loss of severance pay and unemployment benefits.
Are there exceptions when resigning still gives entitlement?
Yes, if resignation is caused by serious culpable conduct by the employer.
Can I receive more than statutory severance pay?
Yes. Additional compensation is common in settlement agreements or when employer misconduct is involved.
Is severance pay taxed?
Yes. Severance pay is taxed as employment income in Box 1 and subject to wage tax.
Is there a maximum severance payment?
Yes. In 2026 the statutory maximum is € 102.000 gross, unless one annual salary is higher.
Does agency or temporary work count toward severance?
Yes, if employment continues without interruption with the same employer.
Can severance pay be used tax-free for education?
No. This tax exemption was largely abolished. Education costs may be paid directly by the employer instead.
Do you need help with your dismissal? Contact our dismissal specialists immediately. The first consultation is free. Call 020 6160 120 or email our specialists.
III. Unemployment Benefits (WW)
Am I entitled to WW ( unemplyment benefit ) after a settlement agreement?
Yes, provided the settlement agreement meets UWV requirements you can have an unemployment benefit
What conditions must a VSO meet for WW eligibility?
• Employer initiated dismissal
• No urgent cause
• No culpable unemployment
• Correct notice period applied
What is the fictitious notice period?
The fictitious notice period is the statutory notice period the employer should have observed. WW only starts after this period.
How long is the notice period?
Between 1 and 4 months, depending on length of service.
How much WW will I receive?
• First 2 months: 75% of daily wage
• Thereafter: 70%, subject to a maximum daily wage
How long does WW last?
Between 3 and 24 months, depending on employment history.
Does severance pay affect WW benefits?
No, provided it is not disguised as salary for the notice period.
Does my partner’s income affect WW?
No. WW is independent of partner income or assets.
Can I take holidays while on WW?
Yes, up to 20 days per year, provided this is reported to UWV.
What if UWV rejects my WW application?
You can file an objection within 6 weeks. Errors in the settlement agreement are often the cause.
Do you need help with your dismissal? Contact our dismissal specialists immediately. The first consultation is free. Call 020 6160 120 or:
IV. Illness, Re-integration & Protection
Can I be dismissed while sick?
Generally no. During the first two years of illness, a dismissal prohibition applies.
Can I sign a settlement agreement while sick?
This is strongly discouraged, as it usually leads to loss of WW entitlement.
What is the difference between medical illness and situational incapacity?
Medical illness is determined by a company doctor. Situational incapacity is caused by workplace conflict.
What are my obligations during re-integration?
You must cooperate reasonably with re-integration efforts. Refusal may lead to sanctions.
What happens after two years of illness?
The dismissal prohibition ends and the employer may terminate employment and must pay severance.
What is a “sleeping employment contract”?
An inactive contract after two years of illness. Employees can now request termination and severance.
Do you need help with your dismissal? Contact our dismissal specialists immediately. The first consultation is free. Call 020 6160 120 or:
email our specialists. email our specialists.
V. Performance, PIP & Disturbed Employment Relationship
What constitutes poor performance under Dutch law?
Structural underperformance despite guidance, training and improvement opportunities.
Can I be dismissed for poor performance without a file?
No. A well-documented performance file is required.
How long must a performance improvement plan last?
Typically 3 to 6 months, with clear and realistic goals.
What is a disturbed employment relationship?
A situation where cooperation has irreparably broken down.
Must mediation be attempted?
Usually yes. Courts expect employers to attempt mediation first.
Is the employer obliged to look for redeployment?
Yes. Employers must investigate alternative suitable positions.
Can I be suspended or put on garden leave?
Yes, but salary must continue to be paid.
Do you need help with your dismissal? Contact our dismissal specialists immediately. The first consultation is free. Call 020 6160 120 or :
VI. Special Protection & Vulnerable Groups
Can I be dismissed during pregnancy?
No. An absolute dismissal prohibition applies.
What are my rights if a temporary contract is not renewed?
You may be entitled to severance pay and a notification penalty.
What is summary dismissal?
Immediate dismissal for urgent cause. It can be challenged within 2 months.
Do works council members have special protection?
Yes. Court approval is required.
Can I be dismissed during probation?
Yes, but not for discriminatory or unlawful reasons.
Can private behavior lead to dismissal?
Only if it directly affects the employer’s interests.
What happens if my employer goes bankrupt?
You are dismissed by the trustee and may claim wage guarantees via UWV.
What happens in a transfer of undertaking?
Employment terms transfer automatically. Dismissal due to transfer is prohibited.
Is severance pay due at retirement?
Generally no, if dismissal occurs at or after state pension age.
Do you need help with your dismissal? Contact our dismissal specialists immediately. The first consultation is free. Call 020 6160 120 or :
VII. Procedures & Legal Routes
What is the difference between UWV and court dismissal?
UWV handles economic and long-term illness cases; courts handle personal grounds.
How long do dismissal procedures take?
UWV: ±4–6 weeks
Court: ±8–12 weeks
How is the notice period calculated?
Based on length of service and statutory rules.
Can I appeal a court dismissal decision?
Yes, within 3 months.
What is the notification penalty?
Up to one month’s salary if a temporary contract is not timely terminated in writing.
Can my employer withhold my salary?
Only under strict legal conditions.
Why is final settlement important at the end of employment?
It determines whether future claims are still possible.
VIII. Miscellaneous & Practical Dismissal Questions (Faq's 65-100)
What if I regret signing a settlement agreement?
If you regret signing a settlement agreement, you can revoke it within the statutory 14-day cooling-off period (or 21 days if not mentioned). Revocation must be done in writing.
Are legal costs related to dismissal tax deductible?
No. Legal costs related to dismissal are not tax deductible for individuals. This is why employers usually reimburse these costs in the settlement agreement.
What happens if I breach a study cost clause after dismissal?
If a valid study cost clause exists, you may be required to repay costs according to a decreasing scale. In practice, repayment obligations are often waived in settlement negotiations.
What is considered an unreasonable dismissal in the Netherlands?
A dismissal is unreasonable if it does not meet statutory requirements or lacks a valid legal ground. This may lead to additional compensation.
Can my employer force me to take unused vacation days?
No. Unused statutory vacation days must be paid out unless you explicitly agree to take them before the end date.
How can I prove a disturbed employment relationship?
Evidence may include emails, mediation reports, meeting minutes or correspondence showing irreparable breakdown of trust.
Can my legal expenses be covered by legal insurance?
Yes, if you have legal insurance. However, specialized dismissal lawyers often achieve better financial outcomes through negotiation.
What is the maximum duration of temporary contracts?
An employer may offer a maximum of three temporary contracts within three years. Exceeding this usually results in a permanent contract.
Does foreign work history count toward WW benefits?
Yes, EU and EEA employment history may count, but only if properly documented. This process is complex and often requires UWV coordination.
What if my employer refuses to negotiate a settlement agreement?
You cannot force a settlement agreement. However, initiating formal procedures often motivates employers to reconsider.
Should I sign final settlement if salary is still outstanding?
No. Outstanding salary must be paid before agreeing to final settlement. Otherwise, claims may be lost.
Do you need help with your dismissal? Contact our dismissal specialists immediately. The first consultation is free. Call 020 6160 120 or :
email our specialists.
What is the most important rule when receiving a dismissal proposal?
Never sign immediately. Always seek legal advice within 48 hours to protect your rights and benefits.
Can my employer take back my company phone or laptop immediately?
Yes, but usually only on your last working day. You should ensure personal data is removed beforehand.
Can I be dismissed because of my political beliefs?
No. Dismissal based on political beliefs constitutes unlawful discrimination.
What is the role of the company doctor in dismissal cases?
The company doctor assesses medical fitness only. They do not decide on dismissal or legal matters.
What does “dismissal by mutual consent” mean?
It refers to termination through a settlement agreement (VSO), not unilateral dismissal.
Can I sign a settlement agreement while working abroad?
Yes, if Dutch employment law applies and you are socially insured in the Netherlands.
Do overtime hours count toward severance pay?
Only if overtime is structural and contractually agreed. Incidental overtime is usually excluded.
What happens if a study cost clause is unclear?
An unclear or unreasonable study cost clause may be invalid and unenforceable.
What is the difference between salary claim and damages?
A salary claim concerns unpaid wages. Damages relate to losses caused by unlawful dismissal.
Can my employer require a confidentiality clause?
Yes, confidentiality clauses are common but must be reasonable and proportionate.
How does dismissal work with a zero-hour contract?
If work has been structural, you may be entitled to a fixed hours contract and severance pay based on average hours.
Will my travel allowance be paid after dismissal?
Only up to the termination date and usually as part of the final settlement.
Must I challenge a non-compete clause in court?
No. Non-compete clauses can usually be waived directly in the settlement agreement.
What is the difference between termination and dissolution?
Termination occurs via notice (UWV). Dissolution occurs via court order.
Can my employer force me to take vacation days before dismissal?
No, unless you agree. Payment of unused days is the default rule.
What if my employer gives a negative reference after termination?
If positive references were agreed, you may enforce compliance or claim damages.
Can I be dismissed after a workplace accident?
Not during the first two years of illness, unless unrelated legal grounds apply.
Do you need help with your dismissal? Contact our dismissal specialists immediately. The first consultation is free. Call 020 6160 120 or :
What if I already signed but missed the cooling-off period?
Outside the cooling-off period, revocation is only possible in exceptional circumstances such as fraud or coercion.
What are the rights of agency workers upon dismissal?
Agency workers fall under agency collective agreements but may still be entitled to severance after two years.
Is salary paid during suspension?
Yes, unless suspension is linked to urgent cause for summary dismissal.
Can a temporary contract automatically become permanent?
Yes, after exceeding statutory limits on duration or number of contracts.
Does dismissal affect my residence permit as an expat?
It may. Highly skilled migrants must meet income and employment requirements within strict timeframes.
What if my employer refuses to cooperate with UWV procedure or court procedures?
Procedural refusal weakens the employer’s legal position and strengthens yours.
Can I claim unpaid bonuses after dismissal?
Yes, if bonuses were earned and not discretionary. This must be checked carefully.
What is the single most important dismissal tip?
Never sign a dismissal document without legal review. One mistake can cost months of income or benefits.
Do you need help with your dismissal? Contact our dismissal specialists immediately. The first consultation is free. Call 020 6160 120 or :
email our specialists.email our specialists.
Always ask our experienced lawyers for advice. We have over 25 years of experiece with dismissal cases and will achieve the best possible result for you. The first advice - for FREE. Just send us a mail or call us on 020 6160 120
