Negotiate a termination agreement: get more severance pay

What you can negotiate in a termination agreement

A termination agreement is an offer, not a dictate. Since there’s no statutory right to severance pay with a termination agreement, the amount is purely a matter of negotiation, and the rule of thumb (0.5 months’ salary per year) is just a reference point, not a guaranteed sum. And severance pay is far from the only item with a monetary value:

• Severance amount: the starting point, and your biggest lever.
• Garden leave: paid and irrevocable until the contract ends, so you can focus on what’s next.
• Reference grade: the grade and exact wording belong in the agreement, not left uncertain.
• Remaining holiday & overtime: payment for outstanding claims instead of a silent waiver (holiday pay).
• Non-compete clause: a post-contractual non-compete clause is only valid with compensation, so this can be negotiated or dropped entirely.
• Termination date: often worth more for tax purposes (the one-fifth rule) and unemployment benefit than a few thousand euros more severance.

Your negotiating leverage

Your strongest lever is a potential unfair dismissal claim. As long as you haven’t signed the termination agreement, the employer would, in doubt, have to dismiss you instead, and they want to buy out that dismissal risk with the termination agreement. That’s exactly your currency:

• How vulnerable a dismissal would be: the more error-prone an alternative dismissal would be (selection criteria for redundancy, protection against dismissal, works council consultation), the more your waiver is worth.
• Timing: if a voluntary redundancy programme or job cuts with deadlines are underway, the employer has an interest in a quick, clean solution, which increases your room to negotiate.
• Planning certainty: the employer pays for peace of mind and a predictable exit. Use that.

For the detail on how much is realistically achievable in a termination agreement and how to set the severance figure yourself, see Severance pay in a termination agreement.

The benefit suspension trap (§ 159 SGB III): don’t sign unchecked

The most expensive mistake with a termination agreement is the benefit suspension period for unemployment benefit. If you end your own employment relationship, you risk a 12-week suspension period (§ 159 SGB III), plus a reduction in how long you can claim. At around €2,000 unemployment benefit per month, that’s roughly €6,000 that a poorly structured severance payment can quickly eat back up.

The suspension period can be avoided for good cause, in particular if a lawful redundancy dismissal would otherwise have occurred at the same date, the ordinary notice period is observed, and the severance payment is no more than 0.5 months’ salary per year of service (guidance from Germany’s Federal Employment Agency). The guidance doesn’t require a minimum amount. If the severance exceeds that, the agency also checks whether the threatened dismissal would have been lawful. If your employment ends before the ordinary notice period expires, your unemployment benefit can also be suspended (§ 158 SGB III). Both points need to be built into the agreement, not left to chance.

For the details on how the suspension period works and which wording protects your unemployment benefit, see Termination agreement & unemployment benefit and Benefit suspension period for unemployment benefit.

Why you shouldn’t sign immediately

Once signed, a termination agreement is immediately binding: no right of withdrawal, no statutory cooling-off period, and contesting it only works in extreme exceptional cases. Artificial time pressure (“this offer expires tonight”) is almost always a tactic, a genuine offer survives a few days of scrutiny.

Before you sign, get the agreement checked: Is the severance pegged only to the rule-of-thumb level when more would be realistic? Is the suspension period properly covered? Are there hidden, broad waiver or repayment clauses? The AI check flags these points in seconds.

How our partner firm negotiates for you

Employers negotiate termination agreements routinely, while you’ll likely do this once in your life. That’s why our partner law firm negotiates on your behalf: they know the leverage points, assess your litigation risk against the employer, and make sure the suspension period is properly covered.

Team Abfindung acts as the litigation funder here, not your law firm. We take on the cost risk, while our partner firm provides the legal representation. For you, it stays success-based, with no upfront cost risk.