Negotiating Your Settlement Agreement

The settlement agreement your employer presents to you is almost never the final offer. In the Netherlands, most settlement agreements are the starting point for negotiation — not the end result. Whether it concerns the severance payment, the end date, the lifting of a non-compete clause or other terms: virtually every component is negotiable. In this guide you will learn how to negotiate effectively, which factors strengthen or weaken your position, and what common mistakes you should avoid.

Why the first offer is rarely the best

When your employer presents a settlement agreement, it is natural to feel pressured to sign quickly. The situation is stressful, the relationship may be strained, and you may want it to be over as soon as possible. However, it is important to understand that the first proposal is almost always a starting offer — not the best your employer is willing to agree to.

Employers and their legal advisors build negotiation room into the initial proposal. They expect you to come back with a counter-offer. The offered severance payment may be at or below the statutory minimum. The end date may not account for the full notice period. Clauses that restrict your future career, such as a non-compete clause, may remain in place even though the employer would be willing to lift them if you ask.

Research and practical experience show that employees who negotiate their settlement agreement achieve significantly better outcomes than those who sign the first offer. This applies not only to the financial compensation, but to all other terms as well. Your employer has chosen the settlement agreement route for a reason: it is faster, cheaper and less risky than going through the UWV or the subdistrict court. That motivation gives you leverage.

What components are negotiable?

A settlement agreement consists of many different components. While the severance payment tends to get the most attention, several other elements can have a major impact on your financial situation and your future career. Below are the key components you should consider negotiating.

Severance payment (compensation)

The severance payment is usually the most important negotiation point. The statutory severance pay (transitievergoeding) — calculated as one-third of a monthly salary per year of service — is often used as a starting point. However, with a settlement agreement there is no automatic legal right to this amount. The compensation is entirely the result of negotiation.

In many cases, the compensation can be negotiated above the statutory severance pay. The extent to which this is possible depends on factors such as the employer's reason for wanting to end the employment, the strength of their legal case, and the risk they face if the matter goes to court. If the employer does not have a strong dismissal ground, they may be willing to pay considerably more to reach a swift agreement.

End date

The end date determines when your employment officially ends and directly affects when your unemployment benefits begin. Dutch law requires that the fictitious notice period is observed — meaning the end date must account for the statutory or contractual notice period. If the proposed end date is too early, you risk a gap between your last salary payment and the start of your unemployment benefits.

A later end date means continued salary payment for longer, continued pension accrual, and can be more favourable for your holiday allowance calculation. It is worth checking whether the proposed end date is correct and whether there is room to extend it.

Release from duties (vrijstelling van werk)

Release from duties means you no longer have to work during the remaining period until the end date, while your salary continues to be paid. This is not a statutory right — it is a negotiable benefit. Being released from duties gives you time to search for a new job, recover from a stressful situation, or simply have a transition period before unemployment.

Non-compete and non-solicitation clause

If your employment contract contains a non-compete clause (concurrentiebeding) or a non-solicitation clause (relatiebeding), these can severely limit your career options after departure. Negotiating the removal or limitation of these clauses is often just as important as the financial compensation. Many employers are willing to lift these clauses in the context of a settlement agreement, especially when the initiative for termination lies with them.

Training costs clause

If you have a training costs repayment arrangement (studiekostenbeding), your employer may claim repayment of training costs upon your departure. In the settlement agreement, you can negotiate a waiver of this repayment obligation, either in full or in part. Note that since the implementation of the EU Directive on Transparent and Predictable Working Conditions, training costs clauses are unenforceable for training that the employer is legally required to provide.

Certificate of employment and references

A positive certificate of employment (getuigschrift) can make a significant difference in your job search. You can negotiate specific agreements about the content and tone of the certificate. Some settlement agreements also include provisions about what the employer will say if contacted by potential future employers for a reference.

Outplacement

An outplacement budget provides professional guidance in your search for a new position. This can include career coaching, CV assistance, interview training, and access to job networks. While not legally required, many employers are open to including an outplacement budget, typically ranging from a few hundred to several thousand euros.

Legal costs contribution

It is standard practice in the Netherlands for the employer to contribute to the cost of legal advice for the employee. This contribution typically ranges from EUR 750 to EUR 2,500 excluding VAT, but can be higher in complex cases. If the proposed agreement does not include a legal costs contribution, or the amount is insufficient, this is a standard point to negotiate.

Factors that strengthen your position

Your negotiating position is not fixed — it depends on the specific circumstances of your case. The following factors generally work in your favour:

• The initiative lies with the employer: if your employer wants you to leave and you are willing to stay, you are in a stronger position. The employer needs your cooperation to make the settlement agreement work.
• Weak dismissal ground: if the employer does not have a strong legal basis for dismissal (for example, a vague claim of a "disrupted working relationship" without supporting documentation), they face considerable risk in court. This gives you leverage.
• Long service: the longer you have worked for the employer, the stronger your position. Long service increases the statutory severance pay and makes courts more inclined to protect the employee.
• Good performance record: if your performance reviews are positive and there is no documented performance file, it is difficult for the employer to argue a performance-based dismissal.
• Dismissal protection: certain categories of employees enjoy extra protection, such as employees who are ill, pregnant, or serving on a works council. If you fall under a dismissal ban, the employer has even more reason to seek a voluntary agreement.
• Employer's misconduct: if the employer has acted improperly (discriminated, failed to meet reintegration obligations, created a hostile work environment), this strengthens your position significantly and can justify a higher compensation.
• Tight labour market: in sectors where qualified staff are scarce, employers may be more willing to offer favourable terms to reach an amicable agreement and protect their reputation.

Factors that weaken your position

Equally, certain circumstances can weaken your negotiating position. Being aware of these factors helps you set realistic expectations and develop an appropriate strategy:

• Culpable conduct on your part: if you have committed serious misconduct (such as fraud, theft, or repeated refusal to follow reasonable instructions), the employer may have grounds for dismissal for urgent cause, potentially without any severance payment.
• Documented performance issues: if the employer has built a proper performance improvement file over time, with documented evaluations, improvement plans, and support, their case for dismissal is stronger.
• Short service: with a short employment history, the statutory severance pay is low, which reduces the financial baseline for negotiation.
• Economic circumstances: in a genuine reorganisation where the employer can demonstrate financial necessity, the room for negotiation above the statutory minimum may be limited, especially if a social plan applies.
• Your own desire to leave: if you have indicated that you want to leave, or if it is clear that the working relationship has become untenable through mutual fault, the employer has less incentive to offer generous terms.
• New job already secured: if the employer knows you already have another position lined up, the urgency for them to offer favourable terms diminishes.

Common mistakes to avoid

Negotiating a settlement agreement is not something most employees do regularly. Under the stress of the situation, it is easy to make mistakes that can cost you thousands of euros or create problems down the line. These are the most common pitfalls:

• Signing too quickly: the most costly mistake is signing the agreement under time pressure without having it reviewed. Even if the employer sets a short deadline, you always have the right to take reasonable time to consider the proposal and seek advice.
• Focusing only on the severance amount: while the financial compensation is important, overlooking other components (non-compete clause, end date, final discharge, pension consequences) can be equally damaging in the long run.
• Negotiating emotionally: anger, frustration or sadness are understandable responses, but letting emotions drive the negotiation rarely leads to good outcomes. Stay factual, professional and focused on your interests.
• Making threats you cannot back up: threatening to go to court or to the media without a strong legal basis undermines your credibility. Base your counter-offer on facts and reasonable arguments.
• Ignoring the unemployment benefit conditions: the wording of the agreement must meet specific conditions for you to retain your right to unemployment benefits. The initiative must lie with the employer, no culpable conduct may be mentioned, and the notice period must be correctly processed. Mistakes in these areas can cost you your benefits.
• Overlooking the final discharge clause: a broadly formulated final discharge (finale kwijting) means you waive all claims, including those you may not be aware of at the time of signing. Ensure that outstanding items such as holiday pay, bonuses, overtime, and expense claims are explicitly settled or excluded.
• Not getting legal advice: many employees believe they can handle the negotiation themselves. While this is technically possible, a lawyer who specialises in employment law will almost always achieve a better result. The legal costs contribution in the agreement often covers a substantial part of these costs.

When to involve a lawyer

In principle, it is always advisable to have a settlement agreement reviewed by a lawyer before signing. However, there are situations where professional legal assistance is particularly important:

• The severance payment seems low: if the offered compensation is at or below the statutory severance pay, a lawyer can assess whether there is room for a higher amount based on your specific circumstances.
• You are ill or have health issues: signing a settlement agreement during illness has serious consequences for your right to continued pay and sickness benefits. A lawyer can advise whether signing is in your interest at all.
• There is a non-compete clause: if a non-compete or non-solicitation clause is not lifted in the agreement and this affects your career, a lawyer can negotiate effectively or advise on alternatives.
• You suspect the employer is acting improperly: in cases involving discrimination, harassment, or other employer misconduct, a lawyer can advise you on your rights and potentially claim additional compensation.
• The agreement is complex: if the agreement contains unusual provisions, multiple addenda, or terms you do not fully understand, professional review is essential.
• You are a senior employee or executive: for employees with high salaries, long service, or executive positions, the financial stakes are higher and the legal complexities greater.

At OntslagLegal, you can have your settlement agreement checked for free. Our lawyers review every component, assess your negotiating position, and advise you on what improvements are realistically achievable — all within one business day on working days.

Practical negotiation tips

Whether you negotiate yourself or with the help of a lawyer, these practical tips will help you achieve a better outcome:

1. Take your time

Do not let the employer rush you. Ask for reasonable time to review the proposal and seek legal advice. A week to two weeks is customary. If the employer pressures you to sign immediately, that itself is a signal that the offer could be improved.

2. Know your baseline

Before negotiating, calculate your statutory severance pay and understand the legal minimum you are entitled to. This gives you a factual starting point for the discussion. Use the statutory severance pay as a floor, not a ceiling.

3. Understand the employer's perspective

The employer has chosen the settlement agreement route because the alternatives (UWV procedure, subdistrict court) are more time-consuming, expensive, and uncertain. Understanding this helps you assess how much room there is for negotiation. The more the employer risks losing in court, the more they should be willing to offer.

4. Negotiate in writing

Put your counter-offer in writing (email is fine). This creates a clear record of what has been discussed and avoids misunderstandings. It also gives the employer time to consider your proposals rather than responding immediately.

5. Prioritise your demands

Identify which components matter most to you and focus your negotiation there. If lifting the non-compete clause is crucial for your next career step, that may be worth more than an extra month's salary. Be prepared to make concessions on less important points in exchange for what really matters.

6. Stay professional

Regardless of how the situation arose, keep the negotiation professional and constructive. Focus on facts and reasonable arguments. A collaborative tone is more likely to produce a good outcome than an adversarial one.

7. Do not reveal your hand

Avoid disclosing information that weakens your position, such as the fact that you already have a new job lined up or that you are desperate to leave. Let the employer make the first move on the financial offer whenever possible.

8. Consider the total package

Evaluate the agreement as a whole, not just individual components. Sometimes a slightly lower severance payment combined with an extended end date, release from duties, and a lifted non-compete clause can be a better deal overall than a higher lump sum with restrictions.

9. Get everything in writing

Verbal promises that are not included in the settlement agreement are virtually unenforceable. If the employer agrees to something during negotiations, insist that it is included in the final written agreement.

10. Use the cooling-off period wisely

After signing, you have a statutory 14-day cooling-off period in which you can dissolve the agreement without giving reasons. Use this period as a final safety net, but ideally resolve all issues before signing. Having a lawyer review the final version before you sign is preferable to relying on the cooling-off period.

Frequently asked questions about negotiating a settlement agreement

Can I negotiate a settlement agreement myself?

Yes, you are free to negotiate the settlement agreement yourself. However, a lawyer who specialises in employment law will typically achieve a better result. They know which components are negotiable, what is legally required, and what is realistically achievable in your situation. Moreover, most settlement agreements include a legal costs contribution, so the cost of professional advice is often partially or fully covered by the employer.

How much higher can the severance payment be than the first offer?

This depends entirely on the specific circumstances. In some cases, the compensation can be negotiated to double or triple the initial offer. In other cases, such as a genuine reorganisation with a social plan, the room may be limited. Key factors include the strength of the employer's dismissal ground, the length of your service, and whether the employer has acted improperly. A lawyer can give you a realistic assessment based on your specific situation.

What if my employer says the offer is final and not negotiable?

In practice, a "final offer" is very rarely truly final. Employers and their advisors often present the initial proposal as non-negotiable to discourage negotiation. If you come back with a well-reasoned counter-offer based on facts and legal arguments, there is usually room to move. If the employer genuinely refuses to negotiate, you always have the option of not signing — in which case the employer must pursue a different (and typically more expensive) dismissal route.

How long does the negotiation process typically take?

The negotiation process varies from case to case. In straightforward situations, the negotiation may be completed within one to two weeks. In more complex cases, or where the parties are far apart, it can take several weeks to a few months. During this time, your employment continues, and your salary is paid as normal. There is no legal deadline for reaching agreement — take the time you need to achieve a fair outcome.

Can negotiating make my situation worse?

Negotiating in a professional and reasonable manner does not make your legal position worse. Your employer cannot withdraw the offer simply because you negotiate or seek legal advice — doing so could be considered bad faith. That said, extremely adversarial tactics or unreasonable demands can damage the working relationship further and may make the employer less willing to compromise. A measured, fact-based approach is always most effective.

Should I negotiate if I want to leave anyway?

Yes. Even if you are ready to move on, there is no reason to leave money or benefits on the table. Your employer does not need to know that you want to leave. You are still entitled to fair terms, including proper compensation, correct processing of the notice period, and the lifting of any restrictive clauses that could affect your next position. The fact that you want to leave does not reduce the legal rights you are entitled to.