The Voluntary Resignation In Lieu of Termination agreement is utilized in situations where both employer and employee agree to end the employment relationship through resignation rather than formal termination. This approach, common in German employment practice, often provides advantages for both parties: the employee may avoid a termination on their employment record and maintain eligibility for unemployment benefits, while the employer reduces the risk of wrongful termination litigation. The document is structured to comply with German employment law requirements, including provisions from the Civil Code (BGB) and Protection Against Dismissal Act (KSchG). It typically includes detailed terms regarding notice periods, final compensation, benefit treatments, confidentiality obligations, and mutual releases, while ensuring all mandatory employee protections under German law are maintained.
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1. Parties: Identification of the employer and employee with full legal names and addresses
2. Background: Context of the agreement, confirming the voluntary nature of the resignation and that it is in lieu of termination
3. Definitions: Key terms used throughout the agreement
4. Resignation and Effective Date: Clear statement of voluntary resignation and the effective termination date
5. Final Payment and Settlement: Details of final salary, pro-rated bonuses, and treatment of outstanding benefits
6. Return of Company Property: Requirements and timeline for returning all company property
7. Confidentiality Obligations: Ongoing obligations regarding confidential information
8. General Release: Mutual release of claims between parties
9. Reference Letter: Commitment to provide a reference letter (Arbeitszeugnis) as required by German law
10. Governing Law: Specification of German law as governing law
11. Severability: Standard clause ensuring validity of remaining provisions if others are found invalid
1. Severance Payment: Terms of any severance payment offered, if applicable
2. Garden Leave: Provisions for garden leave during notice period, if applicable
3. Post-Employment Restrictions: Non-compete or non-solicitation provisions, if required
4. Ongoing Benefits: Treatment of insurance, pension, or other benefits that may continue post-employment
5. Works Council Acknowledgment: Reference to works council consultation if company has a works council
6. Stock Options/Equity: Treatment of any outstanding stock options or equity compensation
7. Outplacement Support: Details of any career transition support offered
8. Tax Indemnity: Provisions regarding tax treatment of payments and indemnifications
1. Schedule 1 - Final Payment Calculation: Detailed breakdown of final payment including salary, vacation pay, and other entitlements
2. Schedule 2 - Company Property List: Itemized list of company property to be returned
3. Schedule 3 - Benefit Summary: Summary of benefit termination dates and any continued coverage
4. Appendix A - Reference Letter Draft: Draft of the agreed reference letter (Arbeitszeugnis)
5. Appendix B - Settlement Payment Schedule: If applicable, schedule of severance or settlement payment dates
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