Termination Agreement: What happens in Germany if a contractual termination agreement has been already been signed and the employee dies afterwards? Is the termination agreement still valid? The Landesarbeitsgericht Baden-Württemberg has already decided (judgement of 15.12.2021, 2 Sa 11/21).

If the death of the employee occurs during the contract conclusion phase of a termination agreement, the agreement is effective unless a different will of the requesting party is to be assumed.

A termination agreement is a contractual agreement between employer and employee terminating the employment relationship at a certain point in time. In comparison to a notice of termination, which takes effect even if the person being terminated does not agree, both parties to the contract must agree to the termination agreement.

If the death of the employee occurs during the contract conclusion phase of a termination agreement, the question arises whether the termination contract was validly agreed. In the case at hand, a seriously ill employee negotiated a termination agreement with his employer including a severance payment. In the contract it was stated that the claim already arose with the conclusion of the contract and was inheritable. The employee’s testamentary heir sued at the Ulm Labour Court for payment of the severance pay agreed in the termination agreement. Pursuant to section 153 of the German Civil Code (Bürgerliches Gesetzbuch, BGB), a contract can also be validly concluded if the proposer dies before his offer is accepted by the other party, unless a different will of the proposer is to be assumed.

The Labour Court of Ulm (judgement of 03.03.2021, 3 Ca 293/20) rejected the claim that the presumed will of the proposer was doubtful, since the deceased and the defendant had regulated the inheritability of the claim in the termination agreement. There was no evidence that the testator did not want the inheritability if he died before the employer signed the agreement.

The Baden-Württemberg Regional Labour Court (Landesarbeitsgericht, LAG) (judgment of 15 December 2021, 2 Sa 11/21) agreed with this view and added that the employee’s death had no effect on the validity of his declaration upon receipt pursuant to section 130(2) of the BGB.

Have you ever asked yourself about your employment relationship after decease? Horak Attorneys-at-Law are labour law experts and they are here to help you clarify all your legal queries.