Until an exit is completed in writing, payroll must follow the employment reality, not management’s expectation.
The payroll deadline arrives while a settlement agreement is still circulating. The employee is no longer on the roster. A replacement has been discussed, perhaps even introduced. The laptop has been returned. Inside the business, everyone speaks as if the departure has already happened.
Then payroll asks one plain question: do we continue the salary?
This is where a difficult employment relationship becomes a wider company problem. Under Dutch rules, dismissal by mutual consent requires a written agreement. A proposal, silence or an unsigned draft leaves the employment relationship in place. If the employee does not agree, employment continues until another valid dismissal route ends it.
For a small employer, that distinction reaches far beyond HR. It affects cash, holiday-pay accrual, the final payslip, replacement costs and the reliability of management instructions. What feels operationally finished may remain legally and financially active.
The date management wants is not necessarily the date payroll can use.
Expectation is not an end date
A settlement agreement can give both sides clarity without a contested dismissal procedure. It sets out the end date, financial arrangements and other conditions. Once signed, the employee normally has 14 days to reconsider. That period extends to 21 days if the employer did not provide written information about the right to reconsider.
The decisive point is the signed agreement. Returning company property, accepting non-active status or discussing departure terms may form part of the process. They do not complete the termination by mutual consent.
When agreement fails, the employer must consider the formal route that fits the dismissal ground. UWV normally deals with business-economic dismissals and long-term incapacity. Personal grounds, including poor performance or a damaged working relationship, generally go to the cantonal court. Contract terms, collective labour agreements and statutory exceptions can affect the route.
In thirty years of Dutch practice, I have repeatedly seen the same gap. The owner believes the decision is made. The adviser knows negotiations are unfinished. Payroll receives an intended end date. Each person acts reasonably within one part of the business, while the company acts on a status it has not completed.
Payroll exposes the governance gap
Stopping salary is not a neutral administrative step. Where employment continues, wages continue to accrue. Holiday pay generally amounts to at least 8 per cent of qualifying wages and builds over wages that remain payable. Variable pay, pension treatment and employer charges may also remain relevant, depending on the arrangements.
Late payment can add another layer. The statutory uplift starts at 5 per cent per working day from the fourth through the eighth working day. It then runs at 1 per cent per working day, up to 50 per cent of the unpaid wage. A court may reduce the uplift, depending on the circumstances.
Cash pressure can arrive from two directions. The business may already be paying temporary cover or a replacement while salary exposure continues for the employee expected to leave. A quick personnel solution can then create double staffing costs, payroll corrections and professional fees.
That is why an unresolved settlement belongs on the ledger as an active employment exposure, rather than a nearly completed departure. A provisional final payment should remain provisional. Continuing accruals should remain visible until the route and date are settled.
One instruction, one accountable decision
The practical question is simple: what confirms that employment has ended, and what cash, staffing and compliance consequences follow from that date?
A small business does not need a complicated approval structure. It does need one accountable person who may confirm an employment end date to payroll. That confirmation should match the signed agreement or completed formal route, the applicable notice period, the personnel record and the message given to managers.
Notice periods matter. An employer’s statutory notice period usually runs from one to four months, depending on length of service. Valid contractual or collective arrangements may alter that period. The notice period also shapes the end date in a settlement agreement. Getting it wrong can lead to wage compensation and affect the employee’s benefit position.
Internal communication deserves equal care. Announcing a successor, removing access and requesting company property may be commercially understandable. Those actions should still fit the employee’s current status. Otherwise, the roster tells one story, payroll another and correspondence a third.
That split weakens governance. It also makes a later dispute harder to manage, because the company cannot clearly explain which event ended employment or who authorised the payroll change.
Keep the person inside the process
Return to the payroll deadline. The employee may already feel excluded, while colleagues assume the matter is closed. The owner wants calm and needs the replacement working. Payroll wants a date. None of those pressures changes the employment status.
The sound response is to distinguish negotiation from completion. Management can plan cover, protect systems and discuss terms while keeping salary treatment and employment records aligned with the current position. If mutual agreement is no longer realistic, the company can assess the appropriate formal route with professional support.
There is a Dutch practicality in getting this right. We value direct conversations and workable settlements, but directness is not finality. A spoken understanding may help people move forward. Payroll still needs the written basis for an end date.
An employment exit is complete when the route, records, wages and communication meet on the same date. Until then, the employee is not an old staffing problem. The employee remains part of today’s company responsibility.
If a proposed departure is still unresolved, I can help you align the dismissal route, payroll position and effective end date.
The data, sourcing, and analysis behind this article were conducted by Linda Pavan Geraedts. AI was not used to identify sources, build the factual basis, or produce the analytical judgment contained here. AI was used only as a drafting aid. The final English text was personally reviewed, edited, and approved by Linda Pavan Geraedts before publication.
References
- Werknemer stemde niet in met vaststellingsovereenkomst, recht op loon · Salaris Vanmorgen
- UWV - Settlement agreement requires mutual written agreement
- Rijksdienst voor Ondernemend Nederland via Ondernemersplein - What happens when the employee does not agree to dismissal
- Rijksdienst voor Ondernemend Nederland via Ondernemersplein - End date, notice period and final-pay exposure
- Rijksoverheid - Late or stopped wage payments are a separate financial exposure
- Ministry of Social Affairs and Employment via Ondernemersplein - Payroll records and statutory holiday pay remain part of the file
- Nederlandse Arbeidsinspectie - Underpayment also creates supervision and enforcement exposure
- Rijksoverheid - New rules on dismissal law
