Termination Of A Contract By Mutual Agreement

Several Supreme Court decisions have invalidated mutual cancellation agreements, so that termination of the employment relationship is equated with “dismissal by the employer” in the absence of additional payments or benefits, and, as a result, related reinstatement claims have been accepted by the Supreme Court. On the other hand, where a worker is required to obtain an amicable cancellation agreement, the payment of statutory duties under a mutual cancellation agreement – which would not have been paid in the event of ordinary dismissal – is considered a `reasonable advantage`. Consequently, cancellation agreements concluded in this way are in principle valid. . . .