Cancellation contract and its legal consequences / Aufhebungsvertrag und seine rechtlichen Folgen

These days, many employers are offering their employees a termination agreement.

The termination agreement: A termination agreement (Aufhebungsvertrag) is a contractual agreement between you and your employer that will end your employment relationship. The most important elements of such a contract are the time when the employment relationship should end and possible payment of a severance payment by the employer.

The advantage: The advantage for the employer is that he does not have to give notice of termination, which, however, could be examined by a labour court and, if in doubt, declared invalid. Because the termination would be the alternative to the termination agreement if the employer and employee do not agree on termination. If such termination occurs, there is often a risk for the employer that the employee will challenge the dismissal in court with an action to protect against dismissal and successfully defend itself against the dismissal.This is why employers are keen that their employees sign a termination agreement in case of doubt.

The disadvantage: Is this always the best option for the employee?

At first, the worker seems to benefit from it. Because many fear the - unjustified - flaw that they have been given notice. And this is how the "carrot and stick" tactic often works. The employer offers a termination agreement to allegedly accommodate the employee. At the same time, he threatens to terminate the contract. For the employee, however, the premature conclusion of a termination agreement can be the worse option. Often there are no legitimate grounds for termination, so that the termination would be open to challenge in court. The job could be preserved as part of a dismissal protection process. The severance payment offered is often below the amount that would be possible through clever negotiations in court.

The trap: In addition, unemployment benefits and the Federal Employment Agency should also be considered. The worker runs the risk of reducing his entitlement to unemployment benefits. Than the employee is in a poor position. He has to use the severance payment for his livelihood because unemployment benefits have been missing for months. The employer often does not clarify this. This can be avoided by legal examination and representation.

The overlooked problem: Foreign workers often do not consider the consequences of a termination agreement. Depending on the residence permit, the entire residence status can be at risk. However, even highly qualified workers who have a blue card can possibly deteriorate their status. This often affects IT specialists in consulting companies. Many are actually in the position to be able to apply for a settlement permit. However, the Residence Act requires a secure livelihood for this. It must be checked whether this is granted when a termination agreement is concluded.

The legal tip: Do not prematurely sign a termination agreement. Do not be put under time pressure and do not negotiate alone.Keep an eye on all legal aspects: labour law, social law (unemployment benefit) and right of residence (residence permit).

Insurance: Don't let your legal protection insurance reject you! Insurance companies often wrongly do not want to pay the lawyer's fees for negotiations on the termination agreement. Leave the communication to a lawyer you trust. Consider whether the lawyer recommended by the insurance company is the right one for you.