The Severance Settlement Agreement (Aufhebungsvertrag) is a crucial document in German employment law, typically used when an employer and employee agree to terminate their employment relationship by mutual consent. This approach often presents advantages over unilateral termination, providing legal certainty for both parties while avoiding potential dismissal protection proceedings. The agreement is particularly relevant in corporate restructurings, leadership changes, or when parties seek an amicable separation. It must comply with stringent German legal requirements, including proper consideration of notice periods, severance calculation methods, and tax implications under the Income Tax Act. The document typically includes provisions for severance payment, treatment of outstanding benefits, confidentiality obligations, and the mandatory qualified reference letter (qualifiziertes Arbeitszeugnis). Special attention must be paid to works council rights and social security implications.
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1. Parties: Identification of the employer and employee, including full legal names, addresses, and registration details for the employer
2. Background: Brief context of the employment relationship, including start date, position, and reason for the settlement agreement
3. Definitions: Key terms used throughout the agreement, including 'Effective Termination Date', 'Severance Payment', and other relevant terms
4. Termination of Employment: Statement of mutual agreement to terminate, specifying the effective termination date and final working day
5. Outstanding Remuneration: Details of final salary payment, including treatment of accrued vacation, overtime, and bonus entitlements
6. Severance Payment: Amount, calculation basis, payment date, and tax treatment of the severance payment
7. Company Property: Requirements and timeline for returning company property, documents, and data
8. Confidentiality: Ongoing obligations regarding confidential information and trade secrets
9. Reference Letter: Commitment to provide a qualified reference letter (qualifiziertes Arbeitszeugnis)
10. Release of Claims: Mutual release of all claims arising from the employment relationship
11. Final Provisions: Standard closing provisions including severability clause, governing law, and entirety of agreement
1. Garden Leave: Used when employee is to be released from duty before termination date while maintaining employment status
2. Post-Contractual Non-Compete: Include when enforcing or addressing existing non-compete obligations or establishing new ones
3. Outplacement Support: When employer offers career transition services or support
4. Company Benefits Continuation: Used when certain benefits (insurance, company car, etc.) will continue for a specified period
5. Works Council Agreement: Required when works council involvement is necessary under BetrVG
6. Stock Options/Share Rights: Include when addressing outstanding equity compensation
7. Pension Arrangements: Used when specific arrangements regarding company pension schemes need to be addressed
8. Social Media Handover: Include when employee managed company social media accounts or had significant online presence
1. Severance Calculation: Detailed breakdown of severance payment calculation, including tax considerations
2. Outstanding Payments Schedule: Itemized list of all outstanding payments including salary, bonuses, and benefits
3. Company Property List: Comprehensive list of company property to be returned
4. Benefits Summary: Details of any benefits continuation or termination
5. Reference Letter Draft: Agreed form of employment reference letter as required under German law
6. Data Privacy Notice: GDPR-compliant information about personal data processing post-termination
Relevant legal definitions
Clauses
Relevant Industries
Manufacturing
Technology
Financial Services
Professional Services
Healthcare
Retail
Telecommunications
Energy
Construction
Automotive
Pharmaceuticals
Consumer Goods
Media and Entertainment
Transportation and Logistics
Education
Real Estate
Relevant Teams
Human Resources
Legal
Finance
Executive Leadership
Compliance
Operations
Payroll
Employee Relations
Talent Management
Risk Management
Relevant Roles
Chief Executive Officer
Managing Director
Human Resources Director
HR Manager
Legal Counsel
Chief Financial Officer
Department Head
Senior Manager
Project Manager
Operations Director
Sales Director
Regional Manager
Division Head
Executive Assistant
Financial Controller
Account Manager
Technical Lead
Senior Engineer
Marketing Director
Product Manager
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