Information you should be aware of.

Severance packages are voluntary cash payments from employers to employees who are losing their jobs. These packages can provide financial leeway for reorientation, further education, or taking a break.

In Germany, there is generally no claim to severance pay, but a severance package can be a crucial factor in court, especially when considering the so-called regular severance of 0.5 times the monthly gross salary per year of employment. Factors influencing the amount of the severance package include the duration of employment, age, social aspects, the economic strength of the company, and the reason for dismissal.

If a social plan exists, affected employees have a claim to the severance payment. In such cases, severance packages are often negotiated as part of the social plan when a company has to close or reduce staff.

It is essential to seek legal advice before signing a contract, even if the negotiation position seems good and secure. This is because a separation agreement regulates the agreement after the dismissal has already taken place, and factors such as personal negotiation position, personal motivation, age, length of service, pension claims, maintenance obligations, and further job market prospects should be carefully considered when deciding between staying or accepting a severance package.

Depending on the negotiation situation, region, and industry, factors of 1.0 or 1.5 may also be considered for the severance package. However, it is advisable to start with a higher amount rather than a lower one when negotiating a severance package.

One should also be aware of common pitfalls such as underestimating one's own negotiation position, giving in to pressure, agreeing to unclear arrangements, missing deadlines, hastily signed documents being legally difficult to reverse, and overly optimistic assessments of one's chances on the job market.

In the case of a mutual termination of the employment relationship, a waiting period of up to twelve weeks for receiving unemployment benefits may apply. Employees who receive a dismissal must observe a three-week deadline for filing a lawsuit.

Severance packages are taxable but not subject to social security contributions. The so-called fifth regulation, i.e., the distribution over several years, can help reduce the tax burden - a consultation with a tax advisor is recommended.

In Hamm, no news was found about companies offering severance packages to their employees in the past year. However, severance packages are often a topic of discussion in the context of social plans when a company has to close or reduce staff.

It is important to remember that every situation is unique, and seeking professional advice can help navigate the complexities of severance packages.