Offered a settlement agreement? Check it before you sign
Do not sign until three things are clear: the suspension of unemployment benefit, the notice period and the severance. Anyone who signs a settlement agreement (Aufhebungsvertrag) will as a rule face twelve weeks without unemployment benefit (§ 159 SGB III); if the employment ends earlier than it could with notice, the benefit is suspended for longer (§ 158 SGB III). A deadline your employer sets for signing binds the employer to the offer, not you. As a rule there is no right to severance, but it can almost always be negotiated; the calculator below shows the usual order of magnitude.
Christian Czirnich, Rechtsanwalt (attorney) since 1994, KirchseeonPrefer to call? +49 8091 617 7777
Write to me in English and I will answer in English. Proceedings before a German labour court are conducted in German; I take care of that.
What the figure does not tell you
This figure is where the negotiation starts, not your result. Whether you get it depends on the reason for the dismissal. Whether it helps you depends on the benefit suspension, the notice period and when it is paid. That can only be said on the facts of your case.
Tell me what the draft says and by when you are expected to sign – I will look into it.
I read every message myself and usually reply on the next working day. What you write to me is covered by legal professional privilege from the first word, even if no engagement comes about. The initial assessment is free of charge.
Your message has arrived. I will usually reply on the next working day. If it is urgent: +49 8091 617 7777
Frequently asked questions
How much severance is customary?
There is no standard amount, and as a rule no entitlement either. As a negotiating benchmark, the common rule of thumb is half a gross monthly salary per year of service; the statute picks this up for one special case in § 1a para. 2 KSchG and there rounds a period of more than six months up to a full year. The calculator on this page gives you that order of magnitude. What is actually negotiable depends above all on how robust a dismissal would be if one were issued instead of the agreement.
Will I face a benefit suspension period?
As a rule, yes. Anyone who takes part in ending their own employment is treated as having acted contrary to the insurance scheme; the employment agency then regularly imposes a suspension period (Sperrzeit) of twelve weeks (§ 159 para. 1 SGB III, German Social Code Book III). An important reason can remove it. If the employment ends earlier than ordinary notice could have ended it, the claim is additionally suspended (§ 158 SGB III). Both depend on how the agreement is drafted — and can only be influenced before you sign.
How long may I take to think about it?
There is no statutory period for reflection. If your employer sets a deadline, that deadline binds the employer to the offer; once it expires, the offer lapses (§§ 145, 146 BGB). The pressure to sign “today” is therefore a negotiating position, not a legal consequence. If a deadline has been set for you, say so in your message — I will then deal with it as a priority.
Do I have to sign a settlement agreement?
No. A settlement agreement (Aufhebungsvertrag) only comes about if both sides enter into it — nobody can be forced. If you do not sign, your employment continues. An employer who wants it to end must give notice, and against a dismissal you can bring an unfair dismissal claim (§ 4 KSchG, the German Protection Against Dismissal Act). That is precisely why the negotiating position before signing is often better than it feels.
Can I withdraw from a settlement agreement I have signed?
There is no general right of withdrawal; consumer withdrawal rights under distance selling law do not apply to an agreement concluded at the workplace. What may come into play is rescission for unlawful duress or fraudulent misrepresentation (§ 123 BGB, the German Civil Code) and the requirement of fair negotiation developed by the Federal Labour Court — for instance where someone was taken by surprise or given no time to think. Both are exceptions, not a return ticket. The safe route is to have it checked beforehand.
How does this differ from a winding-up agreement?
A settlement agreement ends the employment itself. A winding-up agreement (Abwicklungsvertrag) presupposes that notice has already been given and only governs the consequences — severance, reference, garden leave — in return for giving up the claim. For the benefit suspension period this makes no reliable difference: taking part in the winding-up can likewise be treated as conduct contrary to the insurance scheme.
What besides severance belongs in the agreement?
The grade and closing formula of your job reference, whether a period of garden leave counts against your holiday entitlement or not, the return of company car and equipment, any post-contractual non-compete clause together with the compensation payable for it, and the reach of the final settlement clause at the end. Whatever is not in there is hard to enforce afterwards — in case of doubt the settlement clause also disposes of everything nobody thought about at the meeting.
Office: Hubertusstr. 8a, 85614 Kirchseeon (OT Eglharting), a few minutes from Eglharting S-Bahn station. Directions and map