EVERYTHING YOU NEED TO KNOW ABOUT TERMINATION AGREEMENTS

A mutual termination agreement is only valid if both parties agree to it. Usually, the employer will present a draft agreement or suggest discussions regarding the termination. The agreement only becomes effective once both parties have signed it. It may cover, amongst other things, the termination date, a severance payment, a period of leave, and the reference.

No. You are not obliged to sign a termination agreement. A termination agreement cannot be concluded without your consent. If your employer still wishes to terminate the employment relationship, they must take other steps, such as giving notice of termination.

In principle, a termination agreement is voluntary. In practice, however, it is often the case that employers exert pressure, set short deadlines or demand a quick signature. This is precisely when you should be particularly cautious. Time pressure is not a sign that you should sign quickly, but usually a sign that a detailed review of the termination agreement is necessary.

In the case of dismissal, the employer terminates the employment relationship. In the case of a mutual termination agreement, you agree to the termination. This means that, in the case of dismissal, you can often defend yourself. With a mutual termination agreement, you waive this right and bear the consequences of the decision yourself.

A termination agreement may be a good option if the terms suit your circumstances. This might be the case, for example, if you have already secured a new job, if a reasonable severance payment has been agreed, or if you wish to leave your current role quickly. However, whether this is actually the right course of action always depends on the specific terms of the contract and your individual circumstances.

A termination agreement can be particularly risky if you are reliant on unemployment benefits, if key provisions are missing, if your employer is putting pressure on you, or if it is unclear whether a dismissal would even be valid. In such cases, signing the agreement too hastily can often significantly weaken your position.

No. A severance payment is not automatic. You will only receive a severance payment if it has been expressly agreed. Anyone who assumes that a termination agreement automatically includes a payment is likely to be mistaken.

The amount depends very much on the individual case. A rough guide is often given as half a month’s salary for each year of service. However, this is not a hard and fast rule. The key factors are the strength of your position, how keen the employer is to reach a quick settlement, and whether the employer could otherwise terminate the employment relationship without any problems.

Yes. That is precisely one of the biggest risks. By signing a termination agreement, you are actively contributing to the termination of your employment. For this reason, the Jobcentre may impose a waiting period. Whether this actually happens depends on the individual case and the specific terms of the termination agreement.

This is possible, but it doesn’t necessarily go smoothly. Even if you are generally entitled to unemployment benefit, a termination agreement often results in a waiting period. That is why you should always consider the social security implications before signing.

As soon as it is confirmed that your employment is coming to an end, you should look into registering as unemployed and take the necessary steps in good time. If you wait too long, you risk facing further disadvantages. It is particularly important to act quickly and efficiently when deadlines are tight.

A termination agreement should clearly set out all the key points. These include, in particular, the termination date, any severance pay, arrangements regarding holiday entitlement and overtime, a period of leave, the reference, and the handling of bonuses or other outstanding entitlements. The less clearly the agreement is worded, the greater the risk of subsequent disadvantages.

A termination agreement is usually a written document setting out the termination of the employment relationship and the associated terms and conditions. Its content can vary considerably. The key point is that all the important matters are clearly settled.

Yes. You can approach your employer yourself to discuss a mutual termination agreement. However, you cannot enforce it unilaterally. Whether this is a sensible step depends very much on your situation and your negotiating position.

You can express your wish and initiate discussions. However, you have no legal right to expect your employer to agree. A mutual termination agreement can only be reached if both parties agree to it.

In that case, your employment relationship will continue for the time being. If your employer wishes to terminate the employment relationship, they will have to take other steps, such as giving you notice. This is precisely what can strengthen your negotiating position, as a notice of termination is subject to legal review.

This is only possible in exceptional cases. Once signed, a termination agreement cannot usually be simply revoked. Only in specific circumstances, such as in cases of fraud or undue pressure, might it be possible to challenge the agreement. This is precisely why it is important to review the agreement before signing it.

Not usually. Contrary to what many people assume, you cannot normally simply revoke a termination agreement once it has been signed within a few days. When you sign it, you are usually making a decision with long-term consequences.

Yes. A termination agreement must be concluded in writing. A verbal agreement is generally not sufficient. Precisely because the agreement has far-reaching consequences, its formal validity is of great importance.

No, the works council does not usually need to approve a mutual termination agreement. The agreement is concluded directly between the employer and the employee. However, this does not alter the fact that you should have the contents checked thoroughly before signing.

This should be explicitly set out in the termination agreement. Otherwise, disputes can quickly arise as to whether any remaining holiday entitlement should be taken, paid out or offset against time off in lieu. The same applies to overtime. It is precisely on these points that entitlements are often lost if there are no clear rules in place.

The reference should also be covered in the termination agreement. The clearer the agreement, the better. In many cases, it is possible to arrange for the employer to issue a favourable, detailed reference. If you leave this point open, you are often giving away your room for manoeuvre.

These points should be explicitly addressed. Without clear provisions, there is a risk that claims may be forfeited or that the employer may invoke broadly worded indemnity clauses. It is particularly worth examining variable remuneration components in detail.

It is not usually necessary to sign immediately. If your employer is putting you under a lot of time pressure, you should be particularly careful. The greater the pressure, the more important it is to check everything thoroughly. Taking your time usually helps to protect your own position.

Yes. A termination agreement does not merely determine when the employment relationship ends. It also affects severance pay, unemployment benefits, your reference and other entitlements. Reviewing it before signing helps to identify risks and secure better terms.