Termination agreement

A termination agreement (Aufhebungsvertrag) ends the employment by mutual agreement – as opposed to a one-sided dismissal.

The big trap – unemployment benefit block period:

• A 12-week block period on unemployment benefit (§159 SGB III)
• The block period is NOT paid later – the money is gone
• Avoiding the block period: only if the employer had threatened a specific dismissal for operational reasons AND the notice period is observed

Severance pay:

• Rule of thumb: 0.5 gross monthly salaries per year of employment
• Is NOT offset against unemployment benefit I
• Tax: fully taxed, but the one-fifth rule is possible (§34 EStG)

No right of withdrawal!

• Once signed, the agreement is immediately binding
• No statutory right of withdrawal (unlike online purchases!)
• Exceptions only for deception, threats or a contractually agreed right of withdrawal

Advantages over dismissal:

✅ Severance is negotiable
✅ No legal dispute
✅ Agree on a good reference
✅ Freely chosen end date

Expert tip: it's better to file an unfair dismissal claim first and then conclude a court settlement – the Employment Agency is more likely to accept that than a termination agreement.