Checklist for a termination agreement
Your employment contract cannot be terminated immediately, but only according to the agreed notice period. You will continue to receive your salary for the remaining term, even if you are released from your duties earlier. The remaining term of the contract does not have to correspond to your notice period. You can also agree on a longer period.
Exit date
Another aspect that shouldn't be overlooked is the waiting period for receiving unemployment benefits. If the employment relationship is terminated by a mutual termination agreement, this can, under certain circumstances, lead to a temporary suspension of unemployment benefits. It is advisable to find out about the potential consequences before concluding a mutual termination agreement and, if necessary, to seek professional advice.
Unemployment benefits
In many cases, a clause regarding the employment reference is included in the termination agreement. A good reference can make the crucial difference between landing your dream job and not. It is therefore important to ensure that the reference is worded fairly and favorably.
Employment reference
Often, your employer has no interest in you continuing to work for the company until the end of your notice period – either because there are restructuring measures that will eliminate your position anyway, or because your employer assumes you are no longer fully motivated. You can agree that you are not required to perform any work from a specific date for the remainder of your contract. This gives you the time and space to focus on career reorientation, writing applications, or participating in further training. This leave of absence can also help to achieve a better work-life balance and reduce stress associated with your current work situation.
exemption
Here you should request an agreement on the vesting of previously accrued pension entitlements, if relevant.
Occupational pension scheme
If you have variable compensation, a regulation should also be established for this. A target achievement level (e.g., 100%) should be set for the past year as well as for the remaining time.
Bonus scheme
First and foremost, a severance payment certainly represents financial compensation. It can help ease the transition between two jobs and bridge financial gaps. Severance payments of 0.5 months' salary per year of service are common, but higher amounts can also be agreed upon. Every month of pay beyond your notice period is treated as an additional severance payment. However, be aware of the different social security contributions that may apply.
Severance pay
This is important for you
A termination agreement is an agreement between employer and employee in which the employment relationship is ended by mutual consent. Employers are often interested in an amicable solution to avoid a dismissal (due to operational or behavioral reasons) and are willing to offer concessions in return, such as a severance payment.
Many employees are pleased by the prospect of financial compensation that comes with a termination agreement. However, it's important to understand that severance pay isn't everything and that there are other aspects to consider.
Very important : Do not sign immediately! You should carefully consider the following aspects, sleep on it for at least one night, and ideally consult a lawyer.
There are many individual options for structuring a termination agreement. Therefore, don't rush into anything and seek legal advice from a specialist employment lawyer. Our partner, RPS Stahmer, offers you a one-hour initial consultation on employment law, which is free of charge if you later use Restart Career for your career reorientation. You can find more information here!
Newplacement/Outplacement
Newplacement or outplacement (both terms are used synonymously) is a service that offers support to employees who have been laid off, helping them with their career transition. Get professional support during your career transition – even if you just want to take a break or are confident you'll quickly find a new job. Use your layoff as an opportunity to find the best next career step for you with Restart Career, prepare yourself perfectly, and then successfully relaunch your career. Your employer covers the costs – but only if you ask them about it. The newplacement budget is tax-free, meaning no income tax or benefit in kind is due. In addition to advice and coaching for career reorientation, this also includes further training that will make it easier for you to find a new job. You can download a flyer here to give to your employer to ask about the newplacement budget.
