Afvloeiingsregeling
Severance Scheme
A severance arrangement is an agreement or arrangement between an employer and employee(s) upon termination of the employment relationship, setting out the terms of any financial compensation and other conditions.
A severance scheme is a set of arrangements entered into by an employer with individual employees or their representatives upon termination of the employment relationship, typically in the context of a reorganisation or collective dismissal. Such arrangements commonly provide for the amount of any severance payment, any outplacement services and the termination date.
This type of scheme is relevant as it facilitates an orderly conclusion of the employment relationship and helps prevent disputes over the terms of dismissal. It plays a significant role in Dutch dismissal law and may derive from a collective bargaining agreement or from arrangements with the works council.
In practice, severance schemes are frequently used to ensure a smoother transition for employees and to avoid legal proceedings.
“The company established a severance scheme to provide appropriate compensation to the employees who lost their jobs.”
Related terms
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