Severance package Netherlands. If your employer wants to end your work relationship it is likely that you will receive a severance package (i.e. terminations settlement, (i.e. termination settlement or transition payment). On this page we will answer some questions that could help you as an expat in the Netherlands if you are presented with a severance package. Contact us for a check of your settlement agreement. We offer free intakes!
What is a severance package?
A severance package or as they call it in Dutch ‘vaststellingsovereenkomst’ is an offer your employer would make in the case they want to end the work relationship i.e. dismiss you.
The severance package is an agreement between you and your employer for the terms under which you will end your contract.
Do I have to accept the severance package my employer offered me?
You are not obliged to accept the severance package and you always have the right to consult with a third party to get advice on whether you are getting a fair deal. In most cases your employer will cover the fee of the assessment.
What happens if I don’t accept the settlement agreement my employer offered me?
If you decline the severance package your employer cannot proceed to terminate your contract without permission from the UWV (dutch employment insurance agency) or a judge. They can terminate the contract only with their blessing or they will have to apply for a re-organization.
Can I negotiate the severance deal?
You can negotiate for a better severance deal but we would advise to consult with us first before you take that step to discuss the implications of negotiating. In many cases you employer will pay the fee for our consult so that you don’t have to worry about the cost.
What is a good severance package?
What stipulates a fair or good severance package depends on your personal circumstances and what is important for you.
For instance: If you are an expat in the Netherlands with a highly skilled migrant visa and you want to stay in the country after the termination of your contract, postponing the end date of your contract could be more important than getting a higher sum of money to maintain your resident status.
More money doesn’t necessarily mean that your severance deal is fair. As an expat in the Netherlands there are lots of ins and outs to the particulars of your specific severance package.
Here are some general aspects your severance settlement should have in it:
- End date
Agreeing on an end date is a crucial part to the severance package and if your contract doesn’t have one this will affect the date on which you are eligible for unemployment and will affect the date on which your visa will be revoked giving you less time to find another job if you wish to stay.
- Transition payment
The transition fee is considered the most important aspect of the agreement but for expats there is more to be considered. The transition fee will not fall under the 30 percent ruling for expats since it only covers the salary earned on current activities performed for the company you are employed.
- Education cost
In some cases you have to pay your employer for the education that you have followed during your employment.
- Exempt from work
In most cases you do not have to work until the end of your contract date if you’ve agreed to a severance package. This does not mean that you take up your vacation days but that you are exempt from work. However, it is not always the case an employer will offer you to stay home until the end of the contract. Such agreement could buy you extra time to find another employer for instance in the case you work in the Netherlands under a highly skilled migrant visa. In that case you only have 3 months to find a new employer before your visa is revoked and you will lose your 30 percent ruling.
- Non compete clause
If your employer doesn’t want you to work for competitors it is important to agree on a clear clause as to which companies you aren’t allowed to work for (within a certain period). Usually the employer waves any such clause in case of a severance package agreement.
- Returning company property
It is likely you are using a laptop, mobile phone, clothes from your employer. In many cases you have to return these properties but some employers let you keep some electronics to help you for future employment.
In the severance package you can agree to a positive testimony or reference to your relationship to use when you seek new employment.
- Final discharge
At the end of most severance payments you will find the words ‘that both parties grant full discharge’ to one and other. This means that after agreeing to the severance package neither parties will have the right to claim anything outside of the scope of the agreement.
These are some general aspects you could use as a reference to check your severance package.
If you’d like a check of your severance package and advice on how to proceed feel free to contact our expat contract law specialist.