A Severance and Release Agreement is a critical document used in German employment law when an employer and employee agree to terminate their employment relationship by mutual consent. This document is commonly used during corporate restructuring, voluntary separation programs, or to resolve potential employment disputes. The agreement must strictly comply with German labor law requirements, including specific provisions under the Civil Code (BGB) and Employment Protection Act (KSchG). It typically includes detailed terms regarding severance payments, tax implications, social security considerations, and comprehensive releases of claims. The document is particularly important in Germany due to the country's strong employee protection laws and the need for clear documentation of mutual termination agreements.

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

2. Background: Context of the employment relationship, including start date, current position, and reason for separation (ensuring compliance with German labor law requirements)

3. Definitions: Key terms used throughout the agreement, including specific German legal terminology where relevant

4. Termination of Employment: Specific details about the termination date, handover of responsibilities, and final working arrangements

5. Severance Payment: Amount, calculation method, payment date, and tax treatment under German law (including reference to § 3 No. 9 EStG if applicable)

6. Release of Claims: Mutual releases of employment-related claims, specifically tailored to German employment law requirements

7. Return of Company Property: Requirements and timeline for returning all company assets, documents, and data

8. Confidentiality Obligations: Ongoing confidentiality requirements post-employment

9. Reference Letter: Agreement regarding the content and issuance of the mandatory qualified reference letter (qualifiziertes Arbeitszeugnis)

10. Social Security and Benefits: Impact on social security benefits and unemployment benefits (Arbeitslosengeld)

11. Tax Provisions: Tax treatment of the severance payment and respective obligations of both parties

12. Final Provisions: Severability clause, applicable law, and jurisdiction provisions