Settlement agreement

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The winding-up agreement regulates all the modalities that would also be in a termination agreement , for example the amount of the severance payment , the wording of the job reference , when the company car provided is to be handed in, etc. The main difference compared to the termination agreement is that the winding-up agreement does not terminate the employment relationship itself , but this happens through an earlier termination by the employer or through another reason for termination .

In principle, the settlement agreement is not subject to any formal requirements. According to the case law of the Federal Labor Court (2007), however, the written form is constitutive if the waiver of action is agreed and the period of action has not yet expired.

As a rule, the services of the settlement contract only take effect after the deadline for filing a complaint, in which the employee can still have the termination checked for effectiveness. However, the employee does not take action against the termination, as he agrees to the termination on the basis of the modalities regulated in the settlement agreement.

In practice, the agreed amount of severance pay is often based on § 1a , § 9 or § 10 KSchG . The severance payment is not subject to social security obligations. It is fully taxable, but is subject to the moderate progression according to § 34 i. V. m. Section 24 EStG .

However, according to the most recent case law of the Federal Labor Court (2003), the advantage of the liquidation contract, that if the employment relationship is terminated by mutual agreement, an entitlement to social benefits without a vesting period is acquired, no longer exists. In this case, the settlement agreement and the termination agreement are on an equal footing and may result in a blocking period for entitlement to unemployment benefits.

For example, a settlement agreement does not result in a blocking period if an "important reason" i. S. d. Section 144 (1) SGB ​​III is available. This is the case, for example, if the underlying termination is objectively lawful.

However, it must always be checked on a case-by-case basis whether a settlement agreement has any consequences under social law.