A settlement agreement (vaststellingsovereenkomst; VSO) is often an efficient way for employers to terminate an employment relationship. It may prevent involvment with the Dutch Employee Insurance Agency (UWV) or proceedings before the Subdistrict Court, but that speed also carries legal risks. An employer must provide an employee with sufficient information about the consequences of signing, especially when the employee is sick and/or summary dismissal is at issue.
A recent decision by the Appellate Court of The Hague (ECLI:NL:GHDHA:2026:374) shows that rashly terminating an employment contract through a settlement agreement can be costly for the employer.
The case
The employee was incapacitated for work due to back problems. The employer had doubts about the severity of the impairment and had an investigation carried out, which revealed that the employee behaved differently in the office than he did elsewhere. For example, he had difficulties walking in the office and used a crutch, whereas he walked normally when out of sight of the office and traveled independently by public transport.
The employer confronted the employee with these findings during a meeting and claimed that he had systematically exaggerated his complaints, thereby misleading the employer, the occupational physician and other experts. The employee was summarily dismissed and was immediately presented with a settlement agreement. The employer indicated that it would withdraw the summary dismissal if the...
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