Resignation, termination for just cause and mutual termination: which rights apply?
Does someone who resigns get severance? Termination by the employee for just cause (art. 24), notice periods, mutual termination and unemployment benefit; practical notes for employees and employers.
How an employment relationship ends decides the compensation payable and unemployment benefit. The same departure can have very different consequences depending on how it is documented.
Four routes, four outcomes
| Severance | Notice | Unemployment benefit | |
|---|---|---|---|
| Resignation (no just cause) | No | Employee pays the employer if notice is not observed | No |
| Termination by employee for just cause (art. 24) | Yes | No (right to terminate without notice) | Yes (codes 23–25) |
| Termination by employer (no just cause) | Yes | Yes (if notice not given) | Yes |
| Mutual termination (ikale) | Per agreement | Per agreement | No (usually code 22) |
Employee's just causes (art. 24)
- Health reasons: if the work endangers the employee's health.
- Breach of morality and good faith: unpaid or underpaid wages, unpaid overtime, SGK premiums under-reported or reported on a lower wage, mobbing, changing contract terms to the employee's detriment.
- Force majeure: work stopping at the workplace for more than a week.
Termination for just cause must be used within 6 business days of learning the reason and in any case within 1 year (for continuing situations such as unpaid wages the period may not run). It must be in writing with reasons; use a provable channel such as a notary or e-mail.
When resigning
- Observe the notice periods in an indefinite contract (2–8 weeks). If you do not, the employer may set notice pay off against your entitlements. Notice period calculator
- Pay for unused annual leave is also due on resignation.
- If you have met all retirement conditions except age, leaving with an SGK letter confirming eligibility for severance gives a right to severance.
Mutual termination
Mutual termination (ikale) is the parties ending the contract by agreement. The Court of Cassation generally requires a reasonable benefit for the employee (a payment beyond severance and notice) for it to be valid. If the offer comes from the employer and the employee receives only statutory entitlements, it may be treated as an employer termination. It is usually reported with code 22 and no unemployment benefit is paid. For the tax on the additional payment, release conditions and the mediation option: Mutual termination and releases.
For employers
- Give written, reasoned notice; for employees with job security (30+ workers, 6 months' seniority) observe the valid reason and defence requirements.
- Calculate final wage, leave, severance and notice in one payroll; a release is valid only if made at least one month after termination.
- File the termination notification within 10 days. Exit codes
Calculate: Severance, notice, leave · Unemployment benefit