Notice period in your settlement agreement: what is the exact situation?

The notice period in a VSO is also called a notional notice period named. It is the period between when you agree on your resignation and your actual last day of work. 

At a settlement agreement you basically part company by mutual agreement. Still, your employer must adhere to the legal notice period. Even if you agree to leave together, the law prescribes the minimum amount of time between you. Otherwise, it would be detrimental to the UWV, because after all, it has to take care of your unemployment benefit.

The big difference with an ordinary termination of your employment contract is that within a VSO, you are in principle allowed to use your own notice period. Your employer and you may simply agree to use a shorter, or no notice period at all, for example.

But beware: the UWV does take into account the deadline that should have actually applied. More on this later.

As mentioned, the UWV only takes into account the legal notice. Your unemployment benefit will start only after the expiry of this statutory notice period. Even if it is not in your settlement agreement or has been miscalculated. 

Picture this: you sign a settlement agreement on 1 March with an end date of 1 April. You think: great, then I can apply for WW as of 1 April. But your employer should actually have used 3 months" notice. The UWV then says: "Sorry, but your WW won't start until 1 June."

The legal notice period for employers depends on how long you have been employed:

• 0-5 years: 1 month
• 5-10 years: 2 months
• 10-15 years: 3 months
• 15+ years: 4 months

1. Cancel by the end of the month: The notice period always covers 1 full calendar month.
2. Collective bargaining agreements: Check your collective agreement, it may sometimes contain longer statutory notice periods. 
3. Employment contract: Your employment contract may also contain different deadlines. 

For employees who cancel themselves, 1 month may apply as standard, but with a settlement agreement, the UWV looks at the term of the employer. 

Let us look at some concrete examples we have come across in our legal practice. The names in the examples are anonymised.

Example 1: Johan's illness-discharge 

Johan is after 2 years of illness declared unfit for work. He had worked for his employer for 18 years. Johan therefore had 18 years of service and a statutory notice period of 4 months.

Johan decided to sign a settlement agreement and signed it on 10 March. He assumed that if he applied for unemployment benefit, he would receive it from 1 April.

The statutory notice period also simply applies after two years of illness and so his unemployment benefit would start on 1 August. Unfortunately, Johan had already signed and there was an income gap. 

Example 2: The negotiation for Ahmed 

Ahmed worked as an account manager for 11 years. His employer wanted to get rid of him and offered him a settlement agreement. In the employer's first proposal, the employer said it would offer him three months' extra salary. Ahmed could then leave immediately.

Ahmed questioned with us whether this was a good deal. We pointed out that the employer actually already had to give 3 months' notice itself, so this really only amounted to a waiver of work. So this compensation was not to be seen by Ahmed as additional an additional offered severance pay.

By cleverly negotiating with the employer, Ahmed got 9 months' extra monthly salary.

There are many misunderstandings about this point and several court cases have gone on about this. Because when exactly does the notice period start to run? The answer is simple: the notice period starts from the moment you sign the settlement agreement, not when you get it. 

But note that an agreement via e-mail or WhatsApp, for example, also counts as "signing" the settlement agreement. 

For example: if you indicate by e-mail on 15 March that you agree with the main points of the settlement agreement, your notice period actually starts immediately. Even if you are not invited by your employer to sign the paper version until 1 April.

Some employers try to be clever by dropping the settlement agreement at an earlier stage. They then include in your VSO that the agreement was signed earlier. "We'll date the agreement back to last month, then you'll be out sooner," they say." 

Never do this! This is fraud and punishable. Moreover, you run the risk of problems with the UWV. 

If your settlement agreement contains too short a notice period, you will face a waiting time of the UWV. This waiting period is exactly as long as the part of the notice period that has not been applied. 

Suppose you were entitled to 3 months' notice, but only 1 month was applied: 

• UWV waiting time: 2 months 

• No pay: Your employer no longer pays 

• No WW: The UWV is not yet paying out 

• Results: 2 months without any income 

About the notice period, you often have more negotiating room than you think. This is one of the points we actually negotiate in our legal practice by default. These are some of the options you can negotiate on:

Ask for exemption during notice period. You then remain employed (and receive salary), but no longer have to work. This works very nicely for many people, because then they can use this period to apply for another job.

Does your employer want you gone faster? Fine, but then let him have the income gap offset.

Calculate exactly how much you are losing and ask for this amount on top of I severance pay. 

Sometimes you can smartly plan the signing: 

• Sign at the beginning of the month: Maximum use of notice period 

• Avoid signs just before holidays: Your notice period continues on holiday

In some Collective agreements sometimes contain more favourable arrangements. So always carefully compare your settlement agreement and its provisions with your collective agreement.

The notice period in your settlement agreement may seem unimportant to many employees, it can make the difference between being nice to apply for a job when you are still getting paid, to a lot of financial stress because you have an income gap.

Too often, we find that clients contact us only when they are already past the reflection period of their settlement agreement. Only to find out later that they are without income

Our main advice? Always have your settlement agreement checked before signing. The cooling-off period is there for a reason. A free check can quickly save you thousands of euros.