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A sample settlement agreement shows which provisions are standard in cases of termination by mutual consent: the neutral ground for termination, the employer's initiative, the end date with notice period, the transition payment, the 14-day cooling-off period, and final discharge. A template is useful for understanding the structure, but it remains a matter of customization — specifically the four points regarding unemployment benefits must be appropriate for each situation. Below, we will review the most important provisions, outlining what to look out for in each section.
The short answer
- Heading and parties: employer and employee, with the grounds for termination.
- Unemployment Insurance Act provisions: neutral grounds, employer's initiative, notice period, no illness.
- Financial: transition payment, vacation days, holiday pay, payout.
- Specific: exemption, non-compete clause, certificate of employment, confidentiality.
- Conclusion: 14-day cooling-off period and final discharge.
The construction of a model
A standard agreement begins with the parties and the statement that they are terminating the employment by mutual consent. This is followed by the core: the grounds for termination, the end date, and the financial arrangements. The model concludes with the cooling-off period and final discharge. The structure is always the same; the content differs depending on the situation.
The unemployment benefit provisions
This is the heart of every model. Four formulations determine whether the employee retains the right to unemployment benefits:
- Neutral grounds. For example: “The parties note that the employment contract is ending at the initiative of the employer, without there being an urgent reason or culpable conduct on the part of the employee.” This sentence prevents the UWV from assuming culpable unemployment.
- Employer's initiative. The model explicitly states that the employer wishes to terminate the employment. Never “at the employee’s own request”.
- End date and notice period. The end date lies at least the notional notice period in the future, so that unemployment benefits follow immediately without a waiting period.
- No illness. Often a statement that the employee is not incapacitated for work on the date of signing.
The financial provisions
The model handles the final settlement. Pay attention to each section:
- Compensation. The transition payment as a benchmark (one-third of a monthly salary per year worked), often supplemented by an amount exceeding the statutory minimum. State whether it is gross and when it is paid out.
- Holiday days. Pay out or take before the end date.
- Holiday allowance. The accrued holiday allowance up to the end date.
- Bonus or thirteenth month. State pro rata if entitlement exists.
The special provisions
These provisions determine your position after departure:
- Exemption from work. With retention of salary until the end date, or continue working.
- Non-compete and non-solicitation clauses. A good model explicitly states whether an existing clause lapses, remains in effect, or is limited.
- Certificate of employment. Promise of a positive certificate of employment, preferably with the text attached.
- Confidentiality. Reasonably limited to confidential business information.
- Hand in belongings. Laptop, phone, car, access card.
The final provisions: cooling-off period and discharge
Every sound model contains a cooling-off period clause: the employee may revoke the agreement without reason within 14 days of signing (Art. 7:670b BW), and the employer notifies him of this in writing. If this is missing, the period becomes three weeks.
The final discharge is the culmination: after execution of the agreement, the parties declare that they have no further claims against each other. Verify that all financial and special points have been settled before agreeing to this. Exceptions (an ongoing claim, a pension matter) must be explicitly stated.
Why a model is not enough
An example shows the structure, but not your figures. The notional notice period depends on your years of service and collective labour agreement, the compensation of your salary and duration, and the unemployment benefit wording must align with the actual reason. A model containing “at own request” or an incorrect end date will cost the employee their benefits. Therefore, use the model to understand, not to fill it in blindly.
Honest recommendation
An example is fine for familiarizing yourself with the provisions, and in a very simple situation — permanent job, position eliminated, no illness, standard compensation, no non-compete clause — you can get quite far with a good template and the right attention. In that case, you do not necessarily need a lawyer.
Do have the agreement checked as soon as your situation deviates: illness, a non-compete clause, high or unusual remuneration, or a statutory director. A standard agreement does not include your notice period or your figures, and that is precisely where the risk lies. The cooling-off period gives you the space to do this at your leisure.
Want to read more? View the settlement agreement, go through the checklist , and read how to have one drawn up.
Frequently Asked Questions
The parties and grounds for termination, the four Unemployment Insurance Act provisions (neutral grounds, employer's initiative, notice period, no illness), the financial agreements (transition payment, vacation days, holiday pay), special clauses, and finally the cooling-off period and final discharge.
Better not. A template shows the structure, but not your notice period, years of service, and compensation. The unemployment benefit wording must align with the actual situation. An incorrect end date or the phrase “at own request” will cost the employee their benefits. Use the template to understand, not to fill it in blindly.
A wording stipulating that the employment contract terminates at the initiative of the employer, without urgent cause and without culpable conduct on the part of the employee. This sentence prevents the UWV from assuming culpable unemployment and thereby safeguards the unemployment benefit.
Yes. The agreement must inform the employee in writing of the right to withdraw within 14 days (Art. 7:670b BW). If this clause is missing, the period is legally extended to three weeks.
The final provision in which the parties declare that, after execution of the agreement, they have no further claims against each other. Verify that all financial and special points have been settled and without explicitly excluding any pending claim or pension matter.
A good model explicitly states whether an existing non-compete or non-solicitation clause lapses, remains in effect, or is limited. Do not leave this implicit: negotiate its removal if it affects your new job and clearly document the outcome.
In a very simple situation, a template may suffice, provided you can assess the unemployment benefit points yourself. In the case of illness, a non-compete clause, high remuneration, or a statutory director, have it checked. A template does not know your figures, and that is precisely where the risk lies.
