Termination agreement

What is a termination agreement?

This is a bilateral legal act. This means that for its validity it requires the full consent of both parties (employer and employee) with the content of the agreement. The Labor Code itself does not say exactly how this expression of consent should take place. If it were not clear whether the steps towards a termination agreement had been taken correctly.

According to the Labor Code, what are the requirements for a termination agreement?

As both parties agree that it will be best for them when agreeing to terminate their employment, the Labor Code sets out only a minimum of requirements for this legal institute. We will list them in the following points.

1. The agreement must be in writing

First and foremost, this agreement must be in writing. This is due to the so-called principle of legal certainty. Should doubts arise in the future about the content of this agreement, a written document would very easily remove them. However, the termination agreement will apply even if it is not in writing. The law here takes into account the interest of both parties to terminate their employment. (This is a difference, for example, from a notice. A notice that is not given in writing cannot be valid under any circumstances.)

If the agreement were not in writing and there were doubts as to whether the intention of both parties to terminate the employment by agreement was genuine, that fact would be assessed on the basis of their conduct. (For example, as an employee, you would stop going to work after a certain period of time, take all your belongings out of the office, and at the same time your employer would not take any disciplinary action against you because you no longer go to work.)

Even the oral consent of the parties to the termination of the employment relationship would therefore lead to its valid termination. However, it would be concluded in a form that is in conflict with the Labor Code. The employer could face sanctions from the Labor Inspectorate for such an agreement.

2. The agreement must include the date of termination of employment

Another requirement is a clearly defined date of termination of employment. The Labor Code states that without a clear (written) determination of the time, the agreement on termination of employment will be invalid. Therefore, make sure that this information is included in your termination agreement. In most cases, a clear date indicates that you will specify the exact date according to the calendar in the agreement. However, there is nothing to prevent the employer and the employee from agreeing on another method of determination, provided that such designation is sufficiently clear and unequivocal. For example, that the employment relationship ends after the production of a certain number of products, the cleaning of the warehouse, the organization of a conference, the end of incapacity for work, etc.

3. The reason for termination of employment must be stated in writing in the agreement

The last element of the termination agreement is a written statement of the reasons for which the employment is being terminated. The Labor Code recognizes two cases in which these reasons for termination must be stated in the agreement.

The first case is that your employment terminates as an employee for the reasons. Then your employer must always explicitly state them in the agreement.

The reasons are in simplified form the following:

1. The company that employs you, or part of it, is being wound up or relocated.
2. The company you are an employee of will improve work processes, modernize production, or otherwise change the organization of work, and you will become redundant as an employee due to these changes.
3. As an employee, you have become incapacitated for work through no fault of your own. You must prove this by a medical opinion.

Another case in which the reason for termination of employment must be stated in the agreement is if, as an employee, you explicitly want it.

Written reasons for termination of employment fulfill the role of a kind of social protection of the employee. If you apply for another job in the future, you will be able to easily prove that you left your previous job not through your own fault. Just show the text of the agreement.

However, the written justification we write about only applies to situations where the termination of employment came from your employer. If the termination of employment came from the employee, the protection is slightly lower. We’ll talk more about that in the next subchapter.

Severance pay and your claims in the event of termination of employment by agreement

The Labor Code distinguishes whether the initiative to terminate the employment relationship came by agreement by the employer or employee.

If this initiative comes from your employer, the law will take it into account, and your social and economic protection is higher then. You will also be entitled to so-called severance pay. Severance pay is an extra payment, a kind of pain that you, as an employee, deserve when you leave your job, in addition to the normal salary.

The amount of severance pay in a termination agreement depends on the length of the employment relationship and the reasons for the termination of your employment. You can see the specific amount of severance pay in this table.

(Note: the amount of severance pay varies depending on whether your employment was terminated by agreement or termination. When you terminate, your entitlement to severance pay is lower or non-existent. agreed ”).

It is a special case if your employer terminates your employment with you because you have suffered an accident at work or have started to suffer from an occupational disease (or have started to suffer from an occupational disease). The same is true if you are exposed to, for example, chemicals or radiation at work and you reach the highest permissible level of exposure. The level of exposure shall be determined by the competent public health authority. As the employee is then no longer able to carry out his work without endangering his own life and health, he is entitled to severance pay of at least ten times his average salary.

If the employee receives the termination of the employment agreement, then the employee is not entitled to severance pay. However, the employer may give severance pay to the employee even if the law does not expressly require it.