Mutual termination agreements are on the rise. Both employers and employees are increasingly opting for this “soft exit”, moving away from traditional notice periods and potential conflict. However, behind this apparent flexibility lie legal and financial complexities that are often underestimated.
A quiet trend in the Belgian labour market
In practice, HR departments and law firms are seeing a clear increase in mutual termination agreements. They are particularly common for white-collar profiles and in tight labour markets.
The logic is straightforward: it is often preferable to part ways quickly and discreetly rather than allowing a situation to drag on for months.
But simplicity can be misleading.
What does it actually involve?
In a mutual termination, both employer and employee agree to end the employment contract, without applying the standard rules on notice periods or termination indemnities.
There is no specific legal framework comparable to employer-driven dismissal. The terms are defined in a written agreement, often with legal support.
A key principle, according to the Belgian Federal Public Service Employment, is that consent must be freely given. Any form of pressure can invalidate the agreement.
Why companies are using it more often
For employers, the main drivers are speed and risk management.
- Avoiding lengthy and operationally disruptive notice periods
- Reducing the risk of legal disputes
- Handling sensitive situations discreetly
In cases such as underperformance without clear fault, small-scale reorganisations or a mismatch between role and profile, this approach provides a way out without escalation.
In SMEs, it is often seen as a pragmatic option: not a standard approach, but a way to prevent prolonged tension when a working relationship is no longer viable.
What about employees?
There are advantages, although they are less obvious.
- Faster availability for a new opportunity
- Room to negotiate specific conditions
- Reduced conflict and reputational impact
This option is particularly attractive for employees who already have another opportunity lined up.
The financial reality: where issues arise
No automatic protection
Unlike a standard dismissal:
- No automatic entitlement to notice compensation
- No statutory minimum guarantees
Everything depends on what is negotiated and agreed in writing.
In practice, organisations such as Group S and SD Worx observe that employees often underestimate what they give up when accepting such agreements.
Unemployment benefits: not straightforward
The Belgian unemployment office (ONEM/RVA) generally considers mutual termination as voluntary resignation.
This can lead to:
- Temporary suspension of benefits
- Investigation into the actual circumstances
Only if it can be demonstrated that the initiative effectively came from the employer may a sanction be avoided. This is not automatic.
Negotiation is key
A well-negotiated agreement can significantly reduce risks.
Typical elements include:
- A compensation payment (often aligned with notice compensation)
- Continued benefits (company car, phone, bonus) for a limited period
- Outplacement support
- Reference agreements
Labour law practitioners stress that this should never be treated as a mere formality.
Legal risks for employers
While it may appear straightforward, the approach also carries risks for employers.
- Potential disputes if implicit pressure is alleged
- Interpretation issues due to unclear clauses
- Reputational risks if exits are poorly managed
Specialised law firms emphasise the importance of properly documenting each agreement.
When is it the right choice?
In practice, mutual termination works best in three situations:
- A quick transition to a new job
- A shared understanding that the collaboration is no longer working
- A structured exit with fair compensation
It is less suitable when the employee depends on unemployment benefits or has limited negotiating power.
Conclusion: flexibility comes at a price
Mutual termination is not a shortcut, but a fully-fledged tool that requires maturity from both sides.
For employers, it offers speed and control.
For employees, it can create opportunities, but only if properly negotiated.
The bottom line?
What looks like a smooth and friendly exit must also stand on solid legal and financial ground. Otherwise, a soft exit can quickly turn into a hard landing.
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