Compromise agreement

Through a termination agreement (also called resolution agreement ) a debt relationship is terminated by mutual agreement. Moreover, in the termination agreement, other modalities are often regulated, in connection with the termination. The two-sided cancellation agreement differs from the termination as a unilateral termination of a contract. Termination agreements are used because of the local employment protection, especially in the field of labor law.

Contracts on the cancellation of employment contracts

Employment law aspects

The parties may terminate the employment of the termination agreement, without the observance of deadlines, workers may take you off about the company without observing the notice. The employer does not need protection against unfair dismissal provisions noted he has, for example, to carry out any social selection. To compensate for the loss of employment termination agreements in severance payments by the employer to the employee are often agreed.

At termination agreements to terminate the employment relationship 623 BGB the written form must be maintained in Germany according to §. Otherwise, the termination agreement is void, and the employment relationship continues.

If the initiative from the conclusion of a termination agreement by the employer, the employer may under certain circumstances must indicate adverse consequences ( for example, the unemployment benefit claim or for the occupational pension ), if deemed necessary in light of the special circumstances of the case and as a result of a comprehensive balancing of interests is.

An enclosed workplace cancellation agreement is not doorstep selling within the meaning of § 312 paragraph 1 sentence 1 No. 1 German Civil Code and therefore not in accordance with § 312, § 355 BGB revocable.

A worker who was forced to enter into a termination agreement may, in accordance with the termination agreement under certain conditions. of § 119 to § 123 BGB challenged to reach his continued employment. Threatened, for example, an employer with the termination if the termination agreement would not come about, the termination agreement may be appealed in accordance with § 123 BGB, if such cancellation would not come into consideration.

In contrast to termination of employment by the employer, the works council has no say in a single termination agreement.

Social Legal consequences under German law

The conclusion of a termination agreement may be in Germany for a worker have adverse socio-legal consequences if he is then reliant on unemployment benefit or unemployment benefit II.

Locking time when unemployment benefits and reducing the duration of entitlement

Who closes a termination agreement, acts - as with its own termination - at the termination of the employment relationship, thereby causing its unemployment. If the employee has a valid reason for it, it comes after § 159 Paragraph 1 No. 1 of the SGB III in unemployment benefits to a generally twelve -week lockout time because of work task. The unemployment benefits right is reduced to the days of the lock time, but at least a quarter of the entitlement period ( § 128 Section 1 No. 4 SGB III). When unemployment benefit II § 31a and § 31b SGB II is according to § 31, lowered the control power for three months by at least 30 percent. The contract according to § 24 SGB II falls in this time away also.

An important reason for the solution of the employment relationship by a termination agreement exists only if the employee otherwise have been terminated for non- behavioral reasons objectively legally the same time and would have been the acceptance of the denunciation shall not have been reasonable.

Termination agreement with severance

If the employee conceded at operating -related reason for termination in the termination agreement analogous to § 1a paragraph 2 Kündigungsschutzgesetz a severance payment, the amount of which does not exceed one half of the gross monthly earnings for each year of the existence of the employment relationship, it can be assumed that an important reason for the solution of employment present, a blocking time so do not enter.

At higher severance or termination of contracts with severance payments, which have no operational or behavioral occasion, must have threatened a lawful termination by the employer so that the employee is an important reason is to the side. However, the evidence of a special interest in the consensual solution is regularly no longer required, already the interest of workers at the offered severance arrangements can make a waiting for the employer termination unreasonable and outside the group of persons of the officers.

If a severance paid and ending the employment relationship at an earlier time than it would have ended by the employer in an orderly and timely notice, or if the proper notice was excluded indefinitely, before the expiry of 18 months shall be first ( under circumstances, in addition to the lock time of 12 weeks) in accordance with § 143a SGB III for the duration of a suspension period paid no unemployment benefits. The duration of the suspension period depends on the length of the notice period and the amount of compensation paid, it lasts only until the end of the employer- notice, but not more than one year. This suspension period causes but in contrast to the suspension of the right due to a lock no reduction in the entitlement period.

Severance payments have no effect on the level of unemployment benefit themselves, they do not lead to a credit against the unemployment benefit and not reduce its height.

A severance payment that is paid because of the termination of insurable employment as compensation for the time afterwards, is not a contributory earnings. From the severance payment of social security contributions are thus dissipate. However, severance payments are subject to income tax.