HR-Glossar
Aufhebungsvertrag (termination agreement)
When a German termination agreement is valid, why wet-ink signature is mandatory, what the benefit risk is and what fair negotiation requires.
1. What is Aufhebungsvertrag (termination agreement)?
The Aufhebungsvertrag ends an employment relationship by agreement between both sides – unlike a dismissal, which is a unilateral declaration. It can be concluded at any time, including during sickness, during parental leave, or with people enjoying special protection against dismissal.
That is precisely what makes it attractive to employers: notice periods, protection against dismissal, works council consultation and requirements for official approval do not apply. What cannot be terminated by notice can be ended by agreement.
And that is precisely where the risk sits for employees. The price of the agreement is giving up every protection employment law otherwise provides – plus a consequence lying outside employment law altogether: the risk of a waiting period for unemployment benefit under Section 159 SGB III.
One point deserves to be taken out first for anyone bringing group practice into Germany. This contract requires a handwritten signature on paper. Electronic signature is expressly excluded, and an agreement signed that way is void.
2. Origin and development
German employment law starts from the imbalance between the contracting parties and protects the weaker side through mandatory provisions. The termination agreement is the point at which that protective system ends – because here nobody imposes anything unilaterally; both sides consent.
Against that, the legislature set only a single formal hurdle: Section 623 BGB requires written form. Electronic form is expressly excluded; an agreement by email or messenger is void. The purpose is a warning function – whoever signs should notice that they are doing something final.
The courts later added to this. From Section 241(2) BGB they developed a duty of fair negotiation: a negotiating situation may not be arranged so as to impair the other side's freedom of decision substantially. Catching someone unawares – producing a document with no notice, pressing for an immediate signature, no access to advice – can make the contract challengeable. There is, by contrast, no right of withdrawal; that is regularly confused.
3. Core principles and how it works
Written form is mandatory
Section 623 BGB requires written form and excludes electronic form. A termination agreement concluded by email is void for want of form – the employment relationship continues.
No protection against dismissal, no notice periods
The Dismissal Protection Act, notice periods, special protection against dismissal and works council consultation under Section 102 BetrVG do not apply. The parties set the end date freely.
Waiting period risk for unemployment benefit
Someone who brings their own employment to an end without good cause must expect a waiting period under Section 159 SGB III. The provision governs the trigger and the duration; the employment agency examines the individual case.
No right of withdrawal, but fair negotiation
There is no consumer right of withdrawal. A breach of the duty of fair negotiation can, however, render the agreement ineffective – for instance where someone was caught unawares or pressed to sign immediately.
No entitlement to severance
Severance arises only where it is agreed. It is the price of the settlement, not a statutory entitlement – and it is frequently assumed wrongly.
Whatever is not settled stays open
Remaining holiday, overtime, the reference, a company car, return of equipment, confidentiality: a termination agreement without a full and final settlement clause leaves all of that open and produces the disputes it was meant to avoid.
4. Who is Aufhebungsvertrag (termination agreement) relevant for?
- Employers in separation situations – for them it is the route where a dismissal would be uncertain or impossible. - Employees intending to move – a termination agreement allows a quick move without observing the notice period. - Employees with special protection against dismissal – pregnant employees, severely disabled people, works council members: for them the termination agreement is often the only route to an ending. - HR departments – they shape the process and the content and carry the risk of an unfair negotiating situation. - Payroll teams – severance, holiday compensation and the reports come together with them.
5. How it differs from related terms
- Termination agreement and dismissal – a dismissal is unilateral and subject to notice periods and dismissal protection; a termination agreement is bilateral and subject to neither. - Termination agreement and winding-up agreement – a winding-up agreement is concluded after a dismissal has already been given and governs only its consequences. For the waiting period the two are assessed differently. - Termination agreement and fixed term – a fixed term is settled from the outset; a termination agreement ends an ongoing employment relationship. - Termination agreement and summary dismissal – Section 626 BGB requires good cause and a two-week deadline. A termination agreement needs neither – which is why it is often offered as an alternative where a summary dismissal is in prospect. - Severance and compensation under the AGG – compensation under Section 15 AGG has a different basis and its own deadline; a settlement clause does not necessarily capture it.
6. Variants and adaptations
Three arrangements are common and work differently:
- Termination at the earliest possible date with severance – the standard case in redundancy situations. - Termination observing the ordinary notice period – noticeably reduces the waiting period risk, because the employment is not brought to an early end. - Termination with release from duties – revocable or irrevocable. An irrevocable release extinguishes holiday entitlements where that is expressly provided for; it also affects the social security assessment. - Acceleration clause – allows the employee to leave early, with the severance increased by the pay thereby saved.
7. Advantages and challenges
Advantages
- A predictable, dispute-free ending instead of uncertain dismissal protection proceedings
- Effective even where a dismissal would be excluded or require approval
- Both sides can set the end date freely
- Every consequential question can be settled conclusively in one document
- For employees, a quick move without being bound by the notice period
Challenges
- Waiting period risk for unemployment benefit under Section 159 SGB III
- Complete waiver of dismissal protection — without severance, a pure concession
- No right of withdrawal; a signature can practically not be taken back
- Void for want of form where agreed electronically, which happens regularly in practice
- A breach of the duty of fair negotiation can overturn the agreement afterwards
- Incomplete agreements produce exactly the disputes they were meant to avoid
8. Best practices for implementation
Allow time to consider, and document it
A draft to take away, a reference to the possibility of legal advice, no pressing for an immediate signature. That costs a few days and removes the basis for any allegation of unfair negotiation.
Conclude on paper, not digitally
Section 623 BGB excludes electronic form. A termination concluded by DocuSign or email is ineffective – and that surfaces only when somebody comes back. For a group that signs everything electronically, this is the single most expensive habit to carry into Germany.
Raise the waiting period question openly
Whoever offers a termination agreement should point out the waiting period risk and, where possible, observe the ordinary notice period. That is not legal advice but honesty – and it forestalls the allegation that someone was misled about the consequences.
Settle everything, not merely the ending
End date, severance, release from duties, holiday, overtime, the reference including its grade, return of equipment, full and final settlement. Whatever is missing comes back.
9. Tips for employers and employees
For employers
- **Written form is mandatory** – Section 623 BGB excludes electronic form
- **Allow time to consider** – otherwise the duty of fair negotiation can overturn the agreement
- **Agree the reference grade** – otherwise the dispute follows the settlement
- **Include a settlement clause** – but know that it does not capture every claim
For employees
- **Do not sign immediately** – you have no right of withdrawal, but you do have a right to consider
- **Budget for a waiting period** – Section 159 SGB III; clarify it with the employment agency before signing
- **Severance is not automatic** – it arises only where it is agreed
- **Put the reference grade in the contract** – afterwards you have no leverage left
10. Conclusion
The termination agreement is the point at which German employment law withdraws its protection: no dismissal protection, no notice periods, no consultation, no approval requirement. It is therefore available even where a dismissal is not – and for that very reason it is the riskiest form of ending for an employee.
Three points decide matters in practice. First the form: Section 623 BGB requires paper and excludes electronic form; an agreement concluded digitally is ineffective. Second the waiting period under Section 159 SGB III, which can substantially reduce the economic value of a severance payment. Third the duty of fair negotiation – there is no right of withdrawal, but a situation in which someone was caught unawares can make the agreement challengeable afterwards.
For an international group the first of these is the one that goes wrong most often and costs most. Electronic signature is standard practice almost everywhere else and is expressly excluded here. An agreement signed that way does not merely have a defect – it does not end the employment at all, and the discovery usually comes months later.
The most frequent mistake in practice is a fourth, unspectacular one: an agreement that settles the ending and nothing else. Holiday, overtime, the reference and the return of equipment belong in it, otherwise the argument follows the settlement.
A note on sources: the German Civil Code, the Works Constitution Act and the General Equal Treatment Act have official English versions, cited below. SGB III does not (checked on 2026-09-27); its German text governs.
Sources
- Section 623 BGB – Written form of termination (official English version of the German Civil Code) (opens in a new tab)
- Section 626 BGB – Termination without notice for good cause (official English version) (opens in a new tab)
- Section 622 BGB – Notice periods in employment relationships (official English version) (opens in a new tab)
- Section 159 SGB III – Suspension during a waiting period (German original; no official English version) (opens in a new tab)
- Section 102 BetrVG – Co-determination on dismissals (official English version) (opens in a new tab)
- Section 15 AGG – Compensation and damages (official English version) (opens in a new tab)
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