Employment and pensions

Planning severance payments realistically – what helps companies do this

Published on 26th Apr 2023

Severance payments are commonplace in the case of termination of employment contracts by mutual agreement. But what are the right legal steps to take and, above all, what sums should employers expect to pay their employees?

When companies want to part with an employee, they often consider the possibility of an amicable termination through a cancellation agreement instead of a dismissal. In many cases, a severance payment is made as compensation for the loss of the job. But what amount of severance offer is likely to make the employee agree to a termination so that a dismissal protection court case can be avoided? 

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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