Settlement Agreement In Germany

Sometimes, after listening to the parties for a while, the court realizes that while the pending action may be about a certain claim, the underlying issue between the parties to the trial is actually quite different. The real causes of disputes between family members or neighbours can go back decades. In such cases, a German judge can not only attempt a conciliation conference, but also go further by proposing to the parties to opt for judicial mediation (attempted mediation). In the case decided by the Finanzgericht Münster, the employment relationship was terminated prematurely by a mutual/consensual agreement between the employer and the worker in order to avoid disputes. The court decided that the settlement package was subject to the reduced rate. The mutual/consensual compensation agreement does not exclude a reduced rate. Severance pay is paid upon termination of employment in the following cases: (1) the employment contract provides for contractual severance pay (which is very unusual); (2) the parties agree on severance pay (judicial or extrajudicial) to settle a dismissal dispute; (3) the court terminates the employment relationship against payment of severance pay where it finds that, despite the ineffectiveness of the dismissal, the maintenance of employment would not be unbearable for either the employer or the worker; or (4) which provides for redundancy payments as part of a social plan concluded with the works council in the context of a collective redundancy. If the negotiation on quality, i.e. the conciliation conference at the beginning of the first oral procedure, did not lead to an amicable solution, this does not mean that all hope of reaching an agreement is lost.

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