Termination agreement

A termination agreement is an amicable agreement between employer and employee to end the employment relationship without having to comply with the statutory period of notice.

In contrast to regular termination, this contract is voluntary and signed by both parties, making it a flexible alternative to traditional termination. Individual terms of termination may be defined, such as payment of severance pay, payment or reduction of remaining vacation, and agreement on a specific termination date.

A major advantage of a termination agreement is the quick and easy separation, as the formal termination process is circumvented. This can be beneficial both for the employer who wants to vacate the job quickly and for the employee who may already have the prospect of new employment. In addition, the termination agreement often also makes it possible to receive severance pay, which is not necessarily the case with regular termination.

However, workers should bear in mind that concluding a termination agreement can also have disadvantages, particularly with regard to unemployment benefits. Since the termination of the employment relationship is voluntary, the Employment Agency may impose a blocking period for receiving unemployment benefits. It is therefore advisable to seek comprehensive advice before signing a termination agreement to avoid financial losses and ensure that all legal and personal aspects are taken into account.