T as in Termination agreement

What is a termination agreement?

A termination agreement (Aufhebungsvertrag, also: Auflösungvertrag) is an contract between the employer and the employee in which they agree on the termination of the employment relationship and specify the terms and conditions of the termination. It cannot be contested and cannot be challenged in court.

What is the advantage of a termination agreement?

Since the employee actively agrees to the termination of the employment relationship in a termination agreement, the protection against unfair dismissal does not apply and the works council does not have to be involved in the process. In practice, therefore, it is a way for the employer to circumvent the protection against dismissal and avoid a termination in which he would have to expect court proceedings with an uncertain outcome.

What advantages do they have for employees?

For employees, on the other hand, they almost never have any advantages. Employees should therefore always consider very carefully whether it makes sense to accept the agreement. Generally it does not make any sense. At the very least, negotiating the terms of this sort of contract is almost always recommended for employees.


Please note: This is a very general overview on the subject of termination agreements under german labor law. If you need help in your particular case, please do not hestitate to contact me or book your appointment. I’m happy to help.