Termination Agreement in Germany – What Employees Need to Know

A termination agreement (Aufhebungsvertrag) ends the employment relationship by mutual consent – often faster than a dismissal, but with significant risks for employees. In most cases, signing leads to a 12-week unemployment benefit block. If you've received a dismissal notice instead, consider filing an unfair dismissal claim within 3 weeks. Always seek legal advice before signing!

Fees and Initial Consultation (No Free Advice)

Please note that I do not offer a free initial consultation. Any legal advice in connection with a termination agreement is charged. The first consultation is billed as a flat fee of 190 € plus VAT. This initial consultation typically includes a review of the draft agreement, an explanation of the main legal issues and risks, and a personal or video discussion of the most important consequences of signing. It is a verbal initial consultation only and does not include any written legal opinion or written drafting work.

Beyond this first consultation, you can instruct me with further work on your termination agreement. If you would like me to draft or revise clauses of the settlement agreement, prepare a new version, or support you in negotiations, this is a separate mandate and will be billed separately under the German Lawyers’ Fees Act (RVG) based on a higher value in dispute (Gegenstandswert). In such cases, the scope and likely costs will be discussed with you before any further work begins.

Employment Law Specialist – Prenzlauer Berg / Pankow

Legal advice from a lawyer specialized in employment law is generally recommended before signing a termination agreement. Attorney Andreas Martin offers consultation and representation on all matters regarding the termination of employment relationships to clients from Berlin and Brandenburg. Advice is provided at his employment law office (branch) in Berlin Prenzlauer Berg.

Key points:

No notice period or dismissal protection applies
Unemployment benefit (ALG I) is usually blocked for 12 weeks
Severance pay is negotiable, not guaranteed
Written form is mandatory (§ 623 BGB)

Sample termination agreement

Lawyer’s Tip

Never sign a termination agreement under pressure! Always ask for time to review and consult a lawyer.

Pros & Cons for Employees

Advantages:

Quick end to the employment contract
Possibility to negotiate severance pay
No need for a dismissal reason

Disadvantages:

12-week unemployment benefit block (Sperrzeit)
No dismissal protection
Risk of losing further claims (e.g. vacation, overtime)
Difficult to challenge after signing

§ 623 BGB – Written Form Required

§ 623 BGB

Termination of employment contracts by dismissal or termination agreement must be in writing to be valid; electronic form is excluded.

What Should Be Included in a Termination Agreement?

End date of employment
Severance pay (amount, payment date)
Release from work (paid/unpaid)
Settlement of vacation, overtime, reference letter
Return of company property
Final settlement clause (caution: no further claims possible!)

Tip: Use a sample termination agreement and adapt it to your case.

Unemployment Benefit Block (Sperrzeit)

Signing a termination agreement usually leads to a 12-week block of unemployment benefits (§ 159 SGB III). Get legal advice first!

Comparison Table: Termination Agreement vs. Dismissal

Feature	Termination Agreement	Dismissal (Kündigung)
Initiation	By mutual consent	By employer or employee
Notice period	Not required (can be agreed freely)	Must follow statutory/contract
Severance pay	Negotiable, not guaranteed	Rare, only in special cases
Unemployment benefit (ALG I)	12-week block likely	No block if justified
Legal protection	No dismissal protection	Dismissal protection applies
Challenge possible?	Difficult, only in rare cases	Possible via labor court
Written form required	Yes (§ 623 BGB)	Yes (§ 623 BGB)

Process Flow: How a Termination Agreement Is Reached

flowchart TD A[Employer offers termination agreement] --> B{Employee agrees?} B -- Yes --> C[Negotiate terms: severance, end date, etc.] C --> D[Agreement drafted in writing] D --> E[Both parties sign] E --> F[Employment ends on agreed date] B -- No --> G[Employment continues or dismissal possible]

Podcast: 5 Common Mistakes with Termination Agreements

Listen to the podcast on Spotify:

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Contact & Legal Advice – Employment Lawyer Berlin

Attorney Andreas Martin Specialist lawyer for employment law Storkower Straße 139 b, 10407 Berlin 📞 030 74923060 📧 info@rechtsanwalt-arbeitsrecht-in-berlin.de 🌐 rechtsanwalt-arbeitsrecht-in-berlin.de 📘 Facebook

FAQ: Termination Agreement in Germany

What is a termination agreement (Aufhebungsvertrag) in Germany?

A termination agreement is a mutual contract between employer and employee to end the employment relationship. It is an alternative to dismissal and requires both parties' consent.

What are the risks of signing a termination agreement?

The main risk is a 12-week unemployment benefit block (Sperrzeit). Employees may also lose protection against dismissal and risk waiving further claims such as overtime or unused vacation.

Is severance pay guaranteed in a termination agreement?

No, severance pay is not mandatory. It must be negotiated individually and included in the agreement.

Does a termination agreement need to be in writing?

Yes, German law (§ 623 BGB) requires termination agreements to be in written form. Electronic or oral agreements are invalid.

Can I challenge a signed termination agreement?

Challenging a termination agreement is difficult. It is only possible in exceptional cases, such as fraud, threat, or lack of fair negotiation.

What should be included in a termination agreement?

Important points are: end date, severance pay (if any), release from work, settlement of vacation and overtime, return of company property, reference letter, and a final settlement clause.

Should I consult a lawyer before signing?

Yes, always seek legal advice before signing a termination agreement to avoid disadvantages and ensure your rights are protected.