Termination agreement related to an employment contract

Template This is only a template of an employment termination agreement and shall be modified and adapted to your situation and needs.

Termination Agreement

Between the
<Employer >
§ 1 Consensual termination of the employment relationship
The parties agree that the employment relationship terminates by mutual agreement as requested by the employer on <date>. The employment relationship ends in compliance with the normal period of notice. Reason is the operational cessation of the job.
§  2  Handling of open holiday leaves entitlement
Holiday leaves entitlements arising from the termination of the employee’s employment relationship are granted to the employee until <date>. The parties agree that the actual conditions for further holiday and vacation compensation claims do not exist. The employment relationship is properly handled by both parties until the end of the contract.
§ 3  Severance Payment
For the loss of employment, the employee receives according to §§ 3 no. 9, 24, 34 EStG, §§ 9, 10 KSchG, a settlement in the amount of EUR <amount>. The severance payment is due on <date>. A payment before the end of the contract is excluded.
The severance payment will be paid without deduction of social security contributions and, as far as possible, without payroll tax. The taxation risk is borne by the employee.
§ 4  Instructions
The employee has been advised that in the case of early termination of the employment relationship for no operational reasons, he/she must expect a period of suspension at the employment office.
§ 5  References
The employee receives a benevolent testimony at the end of the employment relationship that also consider the leadership skills and performances of the employee.
§ 6  Non-Disclosure
The employee undertakes to maintain secrecy about all business and trade information even after termination of the employment relationship.
§ 7  Compensation of all claims
The parties agree that all claims arising out of the employment relationship, termination of employment are settle with the above agreement.
§ 8 Severability clause
If any provision of this Agreement is or become ineffective, the validity of the remaining provisions shall not be affected. The parties undertake to replace the ineffective provision with a clause that is as close as possible to the interests and importance of the previous provision.
<Place/Date> <Employer> <Place/Date > <Employee>


Cancellation agreement

In the event of a contractual termination, employees and employers shall terminate the employment contract by mutual agreement. Advantage: The consequences of a termination procedure can be avoided.

The annulment is sealed by a cancellation agreement (“Aufhebungsvertrag” in German).

The employee should be informed of the consequences before the signing of the termination agreement.

Make sure that you do not have any disadvantages by signing the termination contract! Preventive consultation with an attorney will save you from very unexpected and unwanted consequences.

Consequences of a cancellation agreement

Please consider:

  • The statutory period of notice is no longer applicable.
  • The employee has to forego social security benefits. For instance, the unemployment office pays the unemployment benefit only after a period of three months, if the employee is still unemployed after the termination of the previous contract. It should therefore ensure that the lost social insurance benefits in the cancellation contract are balanced.
  • The employee can negotiate a severance pay.
  • In the case of older workers, the employer may have to reimburse the unemployment benefit to be paid by the employee. The employer can be exempted from this obligation by the termination agreement.

Let us advise you in how to win your contract partner with a fair offer for a cancellation contract.