The Employee Severance Letter is a crucial document used in German employment relationships when terminating employment through mutual agreement or unilateral termination with severance. It complies with German labor law requirements, including the Protection Against Dismissal Act and the German Civil Code. This document is typically used when companies need to document employment terminations with severance payments, whether due to restructuring, redundancy, or mutual separation agreements. The letter includes essential details such as the termination date, severance amount, final salary arrangements, benefit treatments, and ongoing obligations. It serves as a legally binding document that protects both employer and employee interests while ensuring compliance with German employment regulations, tax laws, and social security requirements.
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1. Opening Details: Date, employee name, address, and formal salutation
2. Termination Confirmation: Clear statement of employment termination, including last working day and reference to prior discussions/mutual agreement
3. Severance Payment: Specific amount, calculation basis, payment date and method
4. Final Salary and Benefits: Details of final regular salary payment, including bonus, vacation days, overtime compensation
5. Company Property Return: List of items to be returned and deadline
6. Confidentiality Obligations: Reminder of ongoing confidentiality duties
7. Reference Letter: Confirmation that a qualified reference letter will be provided
8. Full and Final Settlement: Mutual release of claims and waiver provisions
9. Closing: Signature blocks and formal closing
1. Garden Leave: Used when employee is placed on garden leave for remainder of employment
2. Post-contractual Non-compete: Include if there are existing or new non-compete obligations
3. Outplacement Services: When company provides career transition support
4. Works Council Agreement: Reference to works council involvement if applicable
5. Stock Options/Share Plans: Treatment of existing equity compensation if applicable
6. Insurance Continuation: Details of any continued insurance coverage if offered
7. Tax Treatment Notice: Special tax considerations for severance payment if applicable
1. Severance Calculation Sheet: Detailed breakdown of severance payment calculation
2. Company Property Inventory: Itemized list of company property to be returned
3. Benefits Summary: Detailed list of final benefit payments and entitlements
4. Tax Information Sheet: Information about tax treatment of severance payment
5. Handover Protocol: Template for documenting handover of responsibilities
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