- You are not obliged to sign a termination agreement
- Signing the agreement may result in a waiting period for unemployment benefit
- If you do not sign, the employer must give you notice
- Our employment lawyers will assess whether signing is in your best interests
Specialist solicitor in employment law
Over 15 years’ experience in employment law
Do you have to sign a termination agreement?
You are not obliged to sign a termination agreement. A termination agreement is only valid if both parties agree to it. Your employer cannot force you to do so. Neither time pressure nor firm demands can change this. It is entirely up to you whether you sign.
This is precisely where most mistakes are made: many employees sign too hastily, without considering the consequences.
What happens if you don't sign?
If you do not sign, your employment relationship will continue. Your employer will then have to give you notice if they wish to terminate the employment relationship. This significantly changes your position. You can have a notice of termination reviewed and, if necessary, challenge it. In many cases, this is what creates the opportunity to secure a higher severance payment or negotiate better terms. If you sign too hastily, you often give up this bargaining position.
Should you sign a termination agreement?
It may be advisable to sign if:
- you have already secured a new job
- the employer could terminate your contract effectively anyway
- the severance pay compensates for the potential disadvantage
- you wish to terminate the employment relationship promptly and decisively
You should be cautious if:
- you are dependent on unemployment benefit
- it is unclear whether dismissal would be legally possible
- the employer is putting pressure on you
- the severance pay is low
In these cases, signing the document will often worsen your position.
"Before signing, you have the most leverage: you can refuse, renegotiate, wait for the contract to be terminated and then take legal action. Once signed, the contract is generally binding – it can only be contested or rescinded in exceptional cases (e.g. fraudulent misrepresentation, undue pressure, threats of unlawful termination without notice)."
When a termination agreement might be worthwhile
A termination agreement may be a sensible option if the circumstances apply to your situation. Typical scenarios:
You already have a new career opportunity
You wish to leave your current employment sooner
You receive a fair severance payment
You are avoiding dismissal on specific grounds
It is not the contract itself that matters, but its content. Our employment lawyers will check whether the contract reflects your interests or whether you are accepting unnecessary disadvantages.
You should be aware of these risks
A termination agreement can have significant drawbacks if you sign it without checking it first. The risks include:
- A waiting period of up to 12 weeks before you can claim unemployment benefit
- Loss of your protection against unfair dismissal
- A weaker negotiating position regarding your severance pay
- Unclear or unfavourable provisions regarding holiday entitlement, bonuses or references
The waiting period is particularly critical: by signing a termination agreement, you are actively contributing to the termination of your employment. This is precisely what can lead the Job Centre to classify your behaviour as a contributing factor and impose a waiting period.
"An employee was offered a termination agreement with a modest severance payment and a short notice period. The impression was: sign or take a risk.
We decided together not to sign and to wait for the notice of termination. The employer then gave notice – and that is precisely what created room for negotiation.
Subsequently, a significantly higher severance payment was secured, along with better terms on leaving and no disadvantages regarding unemployment benefits.
The difference was not down to the contract, but to the decision not to sign it initially."
When you should have your termination agreement checked
You should have a termination agreement checked if:
- you are unsure whether it is worth signing
- there is a risk of a waiting period
- a severance payment is on the table
- the employer is putting pressure on you
Deadlines are being set Our lawyers, who specialise in termination agreements, will assess your specific situation and advise you on the best course of action.
- "Haven't signed yet? Use this opportunity to renegotiate (severance pay, end date, reference, unemployment benefit risks).
- Already signed? Have it checked immediately to see whether special circumstances (pressure, deception, excessive strain due to illness, etc.) allow for a challenge or reversal – the deadlines for this are very short."
