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Severance And Release Agreement Template for Netherlands

A Dutch law-governed Severance and Release Agreement is a comprehensive legal document that formalizes the termination of employment between an employer and employee in the Netherlands. It outlines the terms of separation, including the statutory transition payment (transitievergoeding), any additional severance compensation, and a mutual release of claims. The agreement must comply with Dutch employment law, including the Dutch Civil Code and the Work and Security Act, while addressing specific requirements for valid waivers of rights under Dutch jurisdiction. It typically includes provisions for final salary settlements, treatment of benefits, confidentiality obligations, and post-employment restrictions.

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What is a Severance And Release Agreement?

The Severance and Release Agreement is a crucial document used in the Netherlands when formally terminating an employment relationship through mutual agreement or as part of a unilateral termination. It serves to document the terms of separation while ensuring compliance with Dutch employment law, including the statutory requirements for transition payments (transitievergoeding) and the valid waiver of rights. This document is typically used in situations ranging from individual terminations to larger reorganizations, redundancies, or mutual separations. The agreement must carefully balance the employer's desire for finality and release of claims with the employee's statutory and contractual rights under Dutch law. Given the protective nature of Dutch employment legislation, particular attention must be paid to the calculation of severance payments, notice periods, and the format of the release provisions to ensure enforceability.

What sections should be included in a Severance And Release Agreement?

1. Parties: Identification of the employer and employee, including full legal names and addresses

2. Background: Context of the employment relationship, including start date, position, and reason for termination

3. Definitions: Key terms used throughout the agreement

4. Termination Date: Specific date of employment termination and final working day

5. Severance Payment: Details of the statutory transition payment and any additional severance, including calculation method and payment timing

6. Final Settlement: Settlement of outstanding salary, vacation days, expenses, and other employment-related benefits

7. Tax Treatment: Tax implications and responsibilities regarding the severance payment

8. Release of Claims: Mutual release of claims and waiver of rights, specifically structured to comply with Dutch law

9. Confidentiality: Ongoing obligations regarding confidential information and company secrets

10. Return of Property: Requirements for returning company property and documents

11. References: Agreement on the nature and content of employment references

12. Post-termination Obligations: Continuing obligations such as non-competition and non-solicitation if applicable

13. Governing Law: Specification of Dutch law as governing law and jurisdiction

14. Execution: Signature provisions and acknowledgment of legal advice

What sections are optional to include in a Severance And Release Agreement?

1. Garden Leave: Include when there is a period of paid leave before the termination date

2. Medical Insurance Continuation: Include when specific arrangements are made for continuing medical benefits

3. Share Options/Incentives: Include when dealing with existing share options or other incentive schemes

4. Pension Arrangements: Include when specific pension-related provisions need to be addressed

5. Legal Costs: Include when addressing payment of legal fees for reviewing the agreement

6. Communications: Include when specifying agreed internal/external communications about the departure

7. Outplacement Support: Include when outplacement services are being provided

8. Company Housing: Include when addressing company-provided housing arrangements

9. Works Council Notice: Include when works council notification or consultation is relevant

What schedules should be included in a Severance And Release Agreement?

1. Schedule 1 - Calculation of Payments: Detailed breakdown of all payments including statutory transition payment, additional severance, and other benefits

2. Schedule 2 - Company Property: Itemized list of company property to be returned

3. Schedule 3 - Continuing Obligations: Detailed terms of any continuing obligations such as confidentiality and non-compete provisions

4. Appendix A - Tax Calculations: Detailed tax calculations and implications of the severance payment

5. Appendix B - Benefits Summary: Summary of treatment of various benefits and entitlements

6. Appendix C - Reference Letter: Agreed form of reference letter if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Netherlands

Publisher

Ƶ

Cost

Free to use

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