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Update Employment Law May 2022 | Update China Desk 4/2022

Validity of a Termination Agreement

Federal Labor Court (BAG) February 24, 2022 - 6 AZR 333/21

In its decision of February 24, 2022 (Docket No. 6 AZR 333/21), the Federal Labor Court once again had the opportunity to examine the "principle of fair negotiation" (Gebot fairen Verhandelns). 


The parties were in disagreement as to whether the plaintiff‘s employment contract had validly been terminated by a termination agreement (Aufhebungsvertrag). The plaintiff had spent several years as a sales team coordinator in an employment relationship with the defendant.

After having been accused of having made changes to purchase prices in order to misrepresent higher sales profits, the plaintiff agreed to the termination of her employment relationship in a meeting with the defendant’s managing director as well as their later legal counsel. The specific details of the meeting remained in dispute between the parties. Shortly thereafter, the plaintiff contested the termination agreement as the product of undue influence (“widerrechtliche Drohung”).

In court, the plaintiff argued that the termination agreement was invalid. She claimed to have been threatened with dismissal without notice as well as a criminal complaint should she not agree to the mutual termination agreement. Her request to seek legal counsel had been denied. The defendant had thus violated the “principle of fair negotiaton”. 

The Labor Court ruled in favor of the plaintiff, the Regional Labor Court dismissed the claim upon the defendant’s appeal.  

Federal Labor Court Decision

The plaintiff’s revision remained unsuccessful. The press release states: 

Assuming the course of events described by the plaintiff actually were true, the plaintiff was not entitled to contest the validity of the termination agreement as the product of undue influence, an unlawful threat specifically, pursuant to Section 123 of the German Civil Code (Bürgerliches Gesetzbuch – BGB). In the case at hand, a reasonable employer would have considered both dismissal without notice as well as a criminal complaint, and justifiably so given the serious allegations.

The Regional Labor Court had been right in holding that the defendant had not negotiated unfairly and had not thereby violated its duties as defined in Section 311 (2) no. 1 and  Section 241 (2) of the German Civil Code (Bürgerliches Gesetzbuch – BGB). Merely proposing a termination agreement for immediate acceptance, and thus demanding an immediate decision whether or not to accept, did not unlawfully infringe on the plaintiff’s free will.  

Context of the Court’s Ruling

When it comes to the termination of employment agreements, termination agreements are practicable. They do not underlie the requirements of (general and special) protection against dismissal, nor is their validity tied to the involvement of works councils or other bodies. Difficulties may however arise when one side regrets the termination agreement and consequently attempts to withdraw from the unwanted contract.

Following the Federal Labor Court’s ruling of February 7, 2019 (Docket No. 6 AZR 75/18), there was great uncertainty in these cases. For in its decision, the Federal Labor Court had resorted to the so-called “principle of fair negotiation”. It had held that termination agreements that had been entered into in violation of this principle were invalid. “Whenever a situation of psychological pressure is established and exploited that makes a free and prudent decision considerably more difficult or impossible”, there is a violation of the “principle of fair negotiation” (BAG February 7, 2019 - 6 AZR 75/18 - para. 34). The requisite elements of such “situations of psychological pressure” and the limits of such a “principle of fair negotiation” however remained vague. 

The Federal Labor Court’s ruling of February 24, 2022, as far as can be deduced from the press release, now provides greater clarity and defines the scope of application of the “principle of fair negotiation” more precisely. Whether or not a termination agreement has been entered into in violation of the “principle of fair negotiation” will depend on the respective circumstances of the given case. A proposition for immediate acceptance alone does not constitute unfair negotiating – not even if the employee neither has time to consider the offer nor the opportunity to seek legal counsel. 

The decision warrants approval. Unlawful violations of the “principle of fair negotiation” must be limited to strictly limited, exceptional cases, and extreme situations of grave infringement of another party’s free will. Indeed, being confronted with unexpected situations and the demand for a speedy decision is not always unfair (cf. Section 147 (1) 1 of the German Civil Code (Bürgerliches Gesetzbuch – BGB)). It would otherwise unjustly curtail the parties’ right to freely decide to terminate an employment contract, a right that can be deduced from the principle of private autonomy. Nor can the “principle of fair negotiation” serve as a “termination protection light” for mutual agreements. The law already provides extensive protective frameworks with the provisions on legal capacity, fallacies, misrepresentation and threats as well as immoral agreements (Sections 104 et seq., 119 et seq., 138 of the German Civil Code (Bürgerliches Gesetzbuch – BGB)). Thus, not just any threat of dismissal or criminal complaints constitutes unfair negotiating – particularly if an employer had justifiably considered it and the threat had therefore been neither inadequate nor unlawful. 

As a practical note: Whether negotiating has been fair or unfair, depends on the circumstances of the individual case. Negotiations outside the workplace or during non-business hours, fatigue or exhaustion of the other party, linguistic barriers and active misrepresentation in advance regarding the subject of a meeting may indicate violations of the “principle of fair negotiation”. Employers should avoid such indicators in the future. Moreover, it is particularly important to bear in mind that the “principle of fair negotiation” is not limited to termination issues, but it must also be observed in all other negotiations, e.g. when amending contracts. With regard to the termination of employment relationships in particular, settlement agreements after notice of termination (Abwicklungsverträge) may constitute a viable alternative. 

Chinese Update:


德国联邦劳动法院在其2022年2月24日的判决(Az. 6 AZR 333/21)中,再次就“公平协商准则”做出了说明。









针对此类情形,在联邦劳动法院2019年2月7日做出Az. 6 AZR 75/18这项判决后,这类案件的审理就存在很大的不确定性。原因在于,联邦劳动法院在该判决中诉诸所谓的“公平协商准则”,并得出结论:违反该原则而签订的终止协议是无效的。“如果制造或利用心理施压状况,而使得合同一方当事人很难甚至不可能做出自由和深思熟虑的决定”,那么就违反了基于雇主审慎与诚信义务而衍生出的“公平协商准则”(Az. 6 AZR 75/18 - Rn. 34)。然而,这种“心理施压状况”的事实构成前提究竟何时存在,以及“公平协商准则”的界限应如何界定,仍不清楚。




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