Due to the high standards of protection against dismissal, it is not uncommon for the job to be terminated by a contract between the employer and the worker, i.e. a separation contract. This can be done at any time, with or without severance pay. The protection against unfair dismissal provisions do not apply in such cases. As a general rule, the employer will propose severance pay to encourage the employee to accept the dismissal by agreement. But in reality, most companies and workers will try to avoid such an impasse and negotiate some kind of severance package. The company will probably ask you to sign a reciprocal disillusionment of the employment contract (cancellation contract) which stipulates that the termination of the employment relationship is agreed by mutual agreement. They will probably “soften the pot” by offering severance pay (separation pay) and possibly paid leave (leave) until the agreed termination date. Section 314 of the BGB is the general rule when it comes to exceptional dismissal for reasons.

For certain types of contracts, German law provides specific rules for exceptional dismissals for reasons (for example. B art. 89a, HGB; Article 543, BGB; Article 626, BGB). Art. 314 BGB creates for both parties the possibility of a permanent obligation to terminate the contract without notice for an as yet unexplained pause (i.e. for a compelling reason). This right of termination cannot be excluded by agreement between the parties. The termination of a contract is not general when the other party is in a difficult financial situation, with the sole exception of the termination of leases after the application to initiate insolvency proceedings under Section 112 of the InsO. In the event of a serious breach of the employment contract, the employer may terminate and terminate the employment with immediate effect.

This termination must be notified within two weeks if the employer is aware of the underlying facts that led to the dismissal. It is customary and allows for the adoption of comprehensive force majeure clauses in contracts that regulate long-term relationships, such as framework and supply contracts, OEM agreements or distribution agreements.