Termination Agreement (Aufhebungsvertrag) in Germany

What Is an Aufhebungsvertrag

A termination agreement (Aufhebungsvertrag) is a bilateral agreement under which the employment relationship ends by mutual consent on agreed terms. It requires written form under § 623 BGB; electronic form is excluded — an oral agreement, email, scanned signature or ordinary electronic signature is not sufficient. Unlike an employer dismissal, a termination agreement does not require social justification under the KSchG and may provide for an end date that differs from the applicable notice period. It remains subject to the statutory written-form requirement and the general rules governing contractual validity, avoidance and fair negotiation.

The parties may agree the termination date contractually. However, an end date before expiry of the applicable employer notice period may have significant unemployment-benefit consequences and must be assessed separately.

Key provisions to address: effective date; garden leave, including whether it is revocable or irrevocable, whether outstanding holiday and time-off entitlements are credited, and how remuneration, bonuses, benefits and any interim earnings are treated; the scope of any release or settlement clause, including outstanding salary, bonus, commission, overtime, holiday, equity and expense claims; severance amount and payment date; social-security and health-insurance consequences during any garden-leave period and after the agreed termination date; employment reference (Zeugnis) — content, timing, and grade; return of company property; confidentiality and non-disparagement; post-contractual non-compete if applicable; and — for foreign employees — the immigration dimension.

For the employer, a valid termination agreement can provide greater planning certainty and reduce the risk of dismissal-protection litigation. For the employee, a termination agreement may provide a negotiated exit, severance and certainty on the terms of departure. At the same time, the employee generally gives up the opportunity to challenge an employer dismissal and assumes potential unemployment-benefit risks.

If the employer has already issued a dismissal, negotiations over a termination agreement do not suspend the three-week filing deadline for a dismissal-protection claim. Further detail is on our termination protection page.

The Sperrzeit — § 159 SGB III

A Sperrzeit for Arbeitsaufgabe may arise where the employee terminates or agrees to terminate the employment relationship and thereby intentionally or through gross negligence causes unemployment without an important reason. The standard Sperrzeit for Arbeitsaufgabe is twelve weeks. It may be reduced to six or three weeks in the specific cases set out in § 159(3) SGB III. During the Sperrzeit, unemployment benefits are not paid.

In addition to the temporary non-payment of benefits, the total entitlement period is reduced under § 148 SGB III. It is generally reduced by the number of Sperrzeit days; in the case of a twelve-week Sperrzeit for Arbeitsaufgabe, the reduction is at least one quarter of the original entitlement period.

The employer’s and employee’s expectations about the Sperrzeit — or the wording of the termination agreement itself — do not bind the Federal Employment Agency. The agency assesses the circumstances independently and on the facts. Merely describing the termination as employer-initiated does not by itself prevent a Sperrzeit if the factual circumstances do not support an important reason.

The Separate Question of Ruhen — § 158 SGB III

A separate risk, distinct from the Sperrzeit, arises under § 158 SGB III. Where the employment ends before expiry of the applicable employer notice period and the employee receives a severance payment or similar compensation, the entitlement may temporarily rest. The statutory calculation under § 158 SGB III may result in a shorter period than the full remaining notice period and takes account of factors including the amount of compensation, age and length of service. Ruhen and Sperrzeit are independent and may apply cumulatively.

The employee should also observe the separate job-seeking notification deadline. As a general rule, the Federal Employment Agency must be notified at least three months before the agreed end date or, where the employee learns of the termination later, within three days. A late notification may trigger a separate Sperrzeit.

Important Reason (Wichtiger Grund)

Whether an important reason exists depends on the circumstances of the individual case and on whether the employee could reasonably have been expected to avoid or postpone unemployment. The following situations may be relevant but do not automatically exclude a Sperrzeit.

Threatened employer dismissal: A concrete and seriously threatened employer dismissal for operational or personal reasons may constitute an important reason, particularly where the agreed end date does not precede the date on which the employer could have terminated and the severance structure remains within the recognised parameters. The assessment nevertheless depends on the actual circumstances and on whether the arrangement constitutes an attempt to circumvent the Sperrzeit rules.

Health reasons: Documented health reasons may constitute an important reason where continued performance of the contractual work is medically unreasonable and no suitable, less disruptive alternative is available. Medical evidence and prior efforts to resolve the situation may be relevant.

New employment: A concrete and reliable prospect of new employment may be relevant, particularly where the new employment is expected to begin without a material period of unemployment. A merely hoped-for or speculative opportunity is insufficient.

Closure of the unit: A company closure or permanent shutdown may be relevant where it gives rise to a concrete employer dismissal that would otherwise have occurred. The closure alone does not automatically determine the Sperrzeit assessment.

BSG Case Law — B 11 AL 6/11 R

In its judgment of 2 May 2012 — B 11 AL 6/11 R — the BSG held that an employee may have an important reason for entering into a termination agreement where a specific operational dismissal is threatened and the agreed severance remains within the framework of § 1a KSchG, provided the arrangement does not constitute an attempt to circumvent the Sperrzeit rules. The decision addresses a betriebsbedingte Kündigung scenario specifically; other arrangements require a separate assessment. The decision shapes how the Federal Employment Agency assesses termination agreements structured around a threatened operational dismissal.

Severance — Amount and Structure

There is no statutory right to severance pay in every case. Where the Aufhebungsvertrag is agreed because the employer wishes to end the relationship, severance is typically negotiated. The conventional reference point is 0.5 gross monthly salaries per year of service — the same factor used in § 1a KSchG — but the actual amount depends on the legal position, the KSchG litigation risk, the employee’s length of service and age, and the commercial circumstances of the exit. Further detail is on our severance pay page.

A genuine severance payment compensating for the loss of employment is generally not subject to social security contributions. Amounts that in substance represent salary, bonus, commission, holiday pay or remuneration for a garden-leave period may be treated differently. Severance pay is subject to income tax. Since 2025, the employer no longer applies the reduced-tax calculation under § 34 EStG through payroll. Where the statutory requirements are met, the employee may claim the tariff reduction through the annual income-tax assessment. The tax treatment depends in particular on whether the payment qualifies as compensation and produces the required concentration of income. Tax structuring should be coordinated with a tax adviser.

For Executive Service Contracts — Anstellungsvertrag

Managing director exits require separate assessment. The termination of the Anstellungsvertrag and the removal from corporate office (Abberufung) are separate legal steps. The validity of a managing director termination agreement must be assessed under the applicable civil-law and corporate-law rules. Whether employment-law principles such as the BAG’s fair-negotiation doctrine apply, and to what extent, depends on the individual’s status and the circumstances of the negotiations.

Executive exits often involve accelerated garden leave, complex severance structures, commercial register filings after resignation of office, and — where a post-contractual non-compete applies — the restriction, compensation and any waiver mechanism. The principles of §§ 74 ff. HGB may be relevant, but their application to managing directors requires a separate assessment. Further detail is on our managing directors and shareholders page.

For Employees — What to Check Before Signing

An Aufhebungsvertrag presented to an employee requires careful review before any commitment is made. Key questions: Is there an important reason that avoids the Sperrzeit? Does the agreed date comply with the notice period (§ 158 SGB III)? Is the severance amount proportionate? Is the Zeugnis negotiated with the right grade and timing? Is the scope of any general release appropriate, including outstanding salary, bonus, commission, overtime, holiday, equity and expense claims? Are post-termination obligations (non-compete, confidentiality) proportionate? Are pension rights and social-security and tax consequences addressed? Is there an immigration dimension?

Depending on the circumstances, allowing adequate opportunity to review the agreement and obtain advice may reduce legal risk. German law does not impose a general mandatory cooling-off period for termination agreements. The employee should observe the job-seeking notification deadline: generally at least three months before the agreed end date, or within three days if the employee learns of the termination later. If the employer has already issued a dismissal, the three-week filing deadline for a Kündigungsschutzklage continues to run. Further detail is on our employment law for employees page.

For Employers — What to Structure Correctly

From the employer’s side, the Aufhebungsvertrag requires: written form under § 623 BGB — the agreement must be signed in the statutory written form before the parties rely on it, and an oral agreement, email, scanned signature or ordinary electronic signature is insufficient; compliance with the BAG’s duty of fair negotiation (Gebot des fairen Verhandelns, BAG, 7 February 2019 — 6 AZR 75/18); a clear effective date; and resolution of outstanding claims.

Employers must comply with the duty of fair negotiation. This does not create a general cooling-off period or a right to withdraw, and requiring an immediate decision is not by itself unlawful. A breach may arise where the employer creates or exploits a situation of psychological pressure that materially impairs the employee’s ability to make a free and considered decision. In BAG — 6 AZR 75/18 — the Federal Labour Court confirmed that employees do not have a general statutory right to withdraw. The agreement may nevertheless fail where it was concluded in breach of the duty. The assessment focuses on the circumstances of the negotiation process. Where the duty is breached, the legal consequence may be that the employee must be placed in the position they would have occupied had the agreement not been concluded.

Employers should avoid giving binding assurances about the Sperrzeit assessment. Further detail is on our employment law for employers page.

Advice by Alexander Kagan, Attorney at Law, admitted to the Hanseatic Bar Association Hamburg. As of: June 2026.

The contents of this page are for general information only and do not constitute legal advice. A mandate is established only upon express acceptance.