Release of claims (finale kwijting) in Dutch employment law
Almost every settlement agreement (vaststellingsovereenkomst) in the Netherlands contains a finale kwijting - a clause in which both the employer and the employee grant each other a full and final release from all claims arising from or related to the employment relationship and its termination. The clause is intended to bring finality to the relationship: once signed and the agreed payments are made, neither party can institute further proceedings against the other based on the employment.
The finale kwijting is a form of the legal concept of kwijting (discharge) under Article 6:160 of the Dutch Civil Code. When properly formulated, it extinguishes all existing and potential claims that both parties may have against each other - including claims for unpaid wages, transition payment, damages for dismissal, and any other employment-related claim. The clause typically also covers claims that the parties may not have been aware of at the time of signing.
What is and is not covered by finale kwijting under Dutch law
The scope of the finale kwijting depends on the exact wording. A broadly worded release will cover all claims arising from employment; a narrowly worded one may exclude specific claims such as pension rights, share options, or future claims under a collective agreement not yet effective at the time of signing. Dutch courts interpret the scope of a release carefully: if a claim was not expressly or implicitly contemplated at the time of signing, it may fall outside the release. Claims arising from events that occur after the signing - such as a subsequent breach of the non-compete clause - are not covered.
Practical importance under Dutch employment law
Before signing a settlement agreement containing a finale kwijting, the employee must be certain that all claims have been properly addressed and compensated. Items to check include: the eindafrekening, the transition payment, any bonus entitlements, pension accrual during notice, and the terms of the reference letter. Once the agreement is signed and the reflection period has passed, the finale kwijting is binding. An employment lawyer should review the settlement agreement before the employee signs.
The finale kwijting operates as a discharge under Article 6:160 of the Dutch Civil Code and, when properly formulated, extinguishes all existing and potential claims arising from the employment and its termination - including claims the parties may not have been aware of at the time of signing. Dutch courts interpret the scope of a release carefully: claims not expressly or implicitly contemplated at signing, such as pension rights accrued under a separate scheme or share option entitlements governed by different terms, may fall outside the release. The employee must be certain that all elements of the eindafrekening, transition payment, and any bonus or commission entitlements have been settled before the finale kwijting becomes binding.
The finale kwijting operates as a discharge under Article 6:160 of the Dutch Civil Code and, when properly formulated, extinguishes all existing and potential claims arising from the employment and its termination - including claims the parties may not have been aware of at the time of signing. Dutch courts interpret the scope of a release carefully: claims not expressly or implicitly contemplated at signing, such as pension rights accrued under a separate scheme or share option entitlements governed by different terms, may fall outside the release. The employee must be certain that all elements of the eindafrekening, transition payment, and any bonus or commission entitlements have been settled before the finale kwijting becomes binding.