Termination Agreement

A written agreement between employer and employee to end the employment relationship by mutual consent on an agreed date.

Unlike a unilateral dismissal, a termination agreement (Aufhebungsvertrag) requires both parties' signatures and, under § 623 BGB, must be in writing. It typically covers the end date, severance payment, remaining holiday, garden leave, post-contractual non-compete clauses and the wording of the reference letter.

In practice, signing a termination agreement often triggers a waiting period (Sperrzeit) on unemployment benefits under § 159 SGB III unless the termination is justified by a serious reason. Legal review before signing is therefore essential – especially when severance amount, tax treatment (the "Fünftelregelung") and unemployment benefits need to be optimised together.