Employee Severance Agreement Template for Germany

The Employee Severance Agreement (Aufhebungsvertrag) is a crucial document in German employment law used when an employer and employee mutually agree to end their employment relationship. It serves as a legally binding contract that protects both parties' interests while ensuring compliance with German labor regulations. This document is typically used in situations of mutual separation, corporate restructuring, or as an alternative to unilateral termination. It must address specific requirements under German law, including mandatory reference letters, notice periods, and works council involvement where applicable. The agreement should be carefully drafted to ensure it meets tax optimization requirements and social security implications under German legislation. Key components include severance calculation, treatment of outstanding benefits, and post-employment obligations, all structured to withstand scrutiny under German employment law.

1. Parties: Identification of the employer and employee, including full legal names, addresses, and relevant registration numbers

2. Background: Context of the employment relationship, including start date, position, and brief reason for termination if mutually agreed

3. Definitions: Key terms used throughout the agreement, ensuring clarity and precise interpretation

4. Termination Date: Clear statement of when the employment relationship will end, including last working day if different

5. Severance Payment: Amount of severance payment, calculation basis, payment date, and tax treatment under German law

6. Final Salary and Benefits: Details of final salary payment, treatment of outstanding vacation days, bonuses, and other benefits

7. Company Property: Requirements and timeline for returning company property, including documents, equipment, and access cards

8. Confidentiality Obligations: Ongoing obligations regarding confidential information and trade secrets

9. Release of Claims: Mutual release of claims, specifically structured to comply with German law requirements

10. Reference Letter: Commitment to provide a qualified reference letter (qualifiziertes Arbeitszeugnis) as required by German law

11. Social Security and Insurance: Implications for social security and continuation of insurance coverage

12. Final Provisions: Standard closing provisions including governing law, severability, and entire agreement clause