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 >
and
<Employee>
§ 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>

 

Protection against dismissal under German labour law

The regulations on protection against dismissal should give stability and security to the employment relationship. If all conditions for termination have been complied with in all points, the termination is considered effective.

Lawsuit against unfair dismissal

The employee may file complaint against unfair dismissal at the German Labour Court (Arbeitsgericht in German).

If the employee asserts that a termination is socially unjustified or is legally ineffective for other reasons, he has the chance to file a lawsuit within three weeks after the receipt of the written notice of dismissal.

In the event of dismissal for variation of the contract, legal action shall be taken in order to ascertain that the change in terms of employment is socially unjustified or legally ineffective for other reasons.

If the employee has lodged an objection with the works council, he shall enclose the statement of the works council to the lawsuit documentation.

Insofar, as the termination requires the approval of an authority, the appeal-period for bringing the matter to the Labour Court is not initiated until the decision of the authority has been notified to the employee.

Dismissal for variation of contract 

If the employer terminates the contract and offers the employee a variation of their employment relationship, the employee has the option to accept this offer and understand that the dismissal is actually not socially unjustified. This reservation must be declared by the employer to the employee within the period of notice, at the latest within three weeks after receipt of the notice of dismissal.

Termination – opposition proceeding

If the employee considers the dismissal to be socially unjustified, he may lodge an objection at the works council within one week after his dismissal. If the works council considers the appeal to be justified, he has to try to reach an agreement with the employer. It shall communicate its opinion on the objection in writing to the employee and the employer upon request.