Getting the best out of itMutual termination agreement
Termination agreement - What should you pay attention to?
A mutually agreed termination of employment is often the preferred option.
But how do I negotiate a good severance package, an excellent letter of reference, and a long period of paid leave?
LEGAL ADVICE PAYS OFF
A contractual termination has the advantage that the contracting parties usually part ways amicably, and thus a shared future – whatever its nature – is not ruled out per se.
However, employees should be vigilant when drafting and negotiating a termination agreement and should always seek advice and representation.
I WILL FIGHT FOR YOUR INTERESTS
For employers in particular, a termination agreement is the simplest way to end an employment relationship as cheaply and amicably as possible. Employers often exploit employees’ lack of knowledge when drafting the agreement and offering severance pay.
KNOW THE RISKS, AVOID MISTAKES
Even seemingly innocuous clauses in a contract can have significant disadvantages for employees. Therefore, a legal review should always be conducted. Do not sign prematurely!
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Frequently asked questions
Should your employer present you with a termination agreement or announce one, absolutely avoid making any hasty commitments or even signing it. You always have time to consider the offer and have it reviewed by a lawyer. Don’t let your employer pressure you. Seek legal advice; I can support you!
A termination agreement is an out-of-court settlement regarding the termination of an employment relationship. There are two key consequences or risks that must always be considered when signing a termination agreement:
- The Federal Employment Agency (Agentur für Arbeit) considers the mutual termination of employment through a termination agreement to be a breach of insurance regulations, which can lead to a 12-week waiting period before receiving unemployment benefits (ALG I). ⇒ I would be happy to advise you on the risk of a waiting period imposed by the Federal Employment Agency and explain when such a waiting period is not imposed.
- Unlike a court settlement, the contractual agreement of a termination agreement cannot be enforced through legal proceedings. If, for example, your employer does not adhere to a provision of the termination agreement and fails to pay the agreed-upon severance payment, you will have to sue for it in court.
Whether a mutual termination agreement or a dismissal by the employer is better for the employee can only be assessed on a case-by-case basis. A mutual termination agreement certainly carries some risks, but these can be avoided through careful negotiation and drafting. Even in the case of a dismissal, going to labor court (filing a claim for unfair dismissal) is not always necessary. Even after receiving a dismissal notice, you can reach an amicable agreement with your employer. This agreement is called a settlement agreement.
In the case of a dismissal, always observe the short three-week deadline (deadline for filing a claim for unfair dismissal).
Basically, there are no limits to your imagination. You can include numerous agreements in a termination agreement. Commonly, these include the termination date, the reason for termination, a provision regarding any (irrevocable) release from work, provisions for your vacation time, provisions for the return of company equipment, and provisions for any severance pay.
Further provisions may be necessary and advisable in the areas of company pension schemes, bonus payments, employment references, data protection, professional development and training, employee loans, etc.
I will advise you on a individual basis!