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Termination Agreement

Key Points and English template

On this page, we provide you with an overview of the most important aspects of a Termination Agreement in Switzerland, including the elements to be taken into account when drawing up the agreement.

Subsequently, we will provide you with a legally compliant template of a Termination Agreement under Swiss law.

Use a Termination Agreement if ...

… you and an employee have agreed to terminate the employment relationship early (regardless of contractual terms or notice periods)

… you would like to cover the risks associated with the termination of the employment relationship in an agreement for protection purposes (e.g. illness)

… you are prepared to make certain compromises in favour of the employee in return for the early termination of the employment relationship (for example release from work obligation)

Key Points included in a Termination Agreement:

Mutual agreement on the date of termination of the employment relationship
Settlement and mutual release from all employment claims and waiver by the employee to assert any remaining claims (for example holiday entitlement balance) subsequently
Whether the employee continues to be employed or is released from work until the end of the relationship and, in either case, under which conditions
Competition restrictions after the end of the employment relationship
If necessary, additional compensation of the employee and terms of payment of the compensation

What is a Termination Agreement?

Under a termination agreement, an employer and an employee agree to terminate their employment relationship.

The termination agreement is a settlement in which the parties release each other from their employment claims in return for certain payments or waivers.

While a termination is unilateral (often by the employer), a termination agreement requires the consent of both parties. If there is agreement, neither notice periods nor termination blocking periods have to be observed. In the event of a subsequent complaint, however, it must be clear that the termination agreement is in the mutual interest and not in the unilateral interest of the employer. It is useful to precisely specify in the agreement the mutual rights and obligations of the parties in connection with the termination, in particular with regard to the salary.

Legally compliant template of a Termination Agreement

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