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Severance Payment Agreement

Severance Payment Agreement Template for Austria

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Key Requirements PROMPT example:

Severance Payment Agreement

"I need a Severance Payment Agreement under Austrian law for a senior IT executive's voluntary resignation, including provisions for stock option vesting and continued health benefits until March 2025."

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Document background
The Severance Payment Agreement is a crucial document used in Austrian employment relationships when an employment contract is being terminated, whether by mutual consent, resignation, or dismissal. This agreement is particularly important under Austrian law, which has specific requirements for severance payments (Abfertigung) based on length of service and circumstances of termination. The document needs to comply with the Austrian Severance Pay Act (BMSVG) and related employment legislation, including provisions for both the "old" and "new" severance pay systems. It typically includes detailed calculations of the severance amount, treatment of outstanding benefits, tax considerations, and any special arrangements regarding company property or ongoing obligations. The agreement serves to prevent future disputes by clearly documenting all aspects of the final settlement between employer and employee.
Suggested Sections

1. Parties: Identification of the employer and employee, including full legal names, addresses, and relevant registration numbers

2. Background: Context of the severance agreement, including employment history, reason for termination, and reference to original employment contract

3. Definitions: Key terms used in the agreement, including 'Severance Payment', 'Termination Date', 'Final Salary', etc.

4. Termination of Employment: Confirmation of employment termination date and nature of termination (mutual agreement, resignation, etc.)

5. Severance Payment Amount: Specification of the total severance payment amount and its calculation basis

6. Payment Terms: Timeline and method of severance payment, including tax treatment and social security implications

7. Final Settlement: Details of final salary, pro-rated bonuses, and outstanding vacation days

8. Waiver and Release: Mutual release of claims and obligations post-payment

9. Return of Company Property: Requirements and timeline for returning company assets

10. Confidentiality: Ongoing obligations regarding confidential information

11. Governing Law: Confirmation of Austrian law application and jurisdiction

12. Signatures: Execution clause and signature blocks for all parties

Optional Sections

1. Post-Employment Restrictions: Non-compete and non-solicitation clauses, if applicable to the employee's position

2. Special Benefits Continuation: Any continuation of benefits like health insurance or company car during a transition period

3. Reference Letter: Terms regarding the provision of employment references (Dienstzeugnis)

4. Works Council Approval: Required when works council involvement is necessary under Austrian law

5. Outplacement Support: Details of any career transition services offered

6. Special Circumstances: Provisions for specific situations like long-term illness or partial retirement

7. Stock Options/Share Rights: Treatment of any outstanding equity compensation

8. Pension Arrangements: Details of any company pension adjustments or settlements

Suggested Schedules

1. Schedule 1 - Calculation of Severance Payment: Detailed breakdown of severance payment calculation, including years of service, salary basis, and applicable multipliers

2. Schedule 2 - Outstanding Payments: List of all outstanding payments including pro-rated bonuses, overtime, and vacation compensation

3. Schedule 3 - Company Property Inventory: List of company property to be returned

4. Schedule 4 - Benefits Summary: Summary of any benefits being continued or terminated

5. Appendix A - Tax Information: Information about tax treatment of the severance payment

6. Appendix B - Original Employment Contract: Copy of the original employment contract for reference

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreement
Effective Date
Termination Date
Employee
Employer
Employment Contract
Notice Period
Severance Payment
Abfertigung
Final Salary
Base Salary
Variable Compensation
Bonus Payment
Pro-rata Bonus
Company Property
Confidential Information
Works Council
Betriebsrat
Outstanding Vacation Days
Settlement Amount
Payment Date
Social Security Contributions
Tax Deductions
Special Payments
Sonderzahlungen
Company Benefits
Release Claims
Gross Amount
Net Amount
Reference Letter
Dienstzeugnis
Business Day
Governing Law
Parties
Professional Secrecy
Company Pension
Outstanding Claims
Final Settlement
Company Documents
Non-Compete Obligations
Continuing Obligations
Clauses
Parties
Recitals
Definitions
Employment Termination
Severance Payment
Payment Terms
Tax Treatment
Social Security Contributions
Final Settlement
Outstanding Vacation
Bonus Payments
Company Property Return
Confidentiality
Data Protection
Non-Competition
Non-Solicitation
Reference Letter
Release and Waiver
Works Council Approval
Continuing Obligations
Company Benefits Termination
Pension Arrangements
Legal Costs
Governing Law
Jurisdiction
Entire Agreement
Severability
Amendment
Counterparts
Notices
Assignment
Third Party Rights
Force Majeure
Execution
Relevant Industries

Banking and Financial Services

Information Technology

Manufacturing

Professional Services

Healthcare

Retail

Construction

Education

Telecommunications

Energy

Transportation and Logistics

Real Estate

Media and Entertainment

Hospitality

Pharmaceutical

Relevant Teams

Human Resources

Legal

Finance

Compliance

Executive Leadership

Administration

Payroll

Employee Relations

Corporate Governance

Risk Management

Relevant Roles

Chief Executive Officer

Human Resources Director

Legal Counsel

Chief Financial Officer

Department Manager

Line Manager

HR Business Partner

Compliance Officer

Finance Manager

Operations Director

General Manager

Administrative Manager

Project Manager

Senior Executive

Department Head

Industries
Austrian Labour Law Act (Arbeitsrecht): Primary legislation governing employment relationships, including basic provisions for termination and severance payments
Salaried Employees Act (Angestelltengesetz): Specific regulations for white-collar employees, including severance payment calculations and notice periods
Severance Pay Act (Betriebliches Mitarbeiter- und Selbständigenvorsorgegesetz - BMSVG): Governs the 'new' severance pay system (Abfertigung neu) implemented since 2003, including contribution rates and payment conditions
Income Tax Act (Einkommensteuergesetz): Covers taxation of severance payments, including special tax provisions for lump-sum payments
General Social Insurance Act (Allgemeines Sozialversicherungsgesetz - ASVG): Regulations regarding social security contributions and their treatment in severance payment calculations
Works Constitution Act (Arbeitsverfassungsgesetz): Requirements for involvement of works council in severance agreements, if applicable
Equal Treatment Act (Gleichbehandlungsgesetz): Ensures non-discrimination in severance payment arrangements
Special Protection Laws (Various): Special provisions for protected groups like pregnant employees, works council members, and disabled employees
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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