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A Severance Agreement is a legally binding contract between an employer and departing employee in Austria that outlines the terms of their employment separation. It typically details the final payment package, including any mandatory severance under Austrian labor law (Abfertigung) and additional voluntary benefits the company offers.

These agreements often include important provisions about confidentiality, non-competition clauses (Konkurrenzklausel), and mutual releases from future claims. Under Austrian employment regulations, they're particularly important for protecting both parties' interests, especially when dealing with long-term employees or management-level staff who might be entitled to significant severance benefits under the BMSVG system.

Use a Severance Agreement when ending an employment relationship amicably in Austria, especially for long-term employees or executives. These agreements become essential during company restructuring, voluntary departures, or when offering early retirement packages. They're particularly valuable when the separation involves substantial benefits beyond the mandatory Abfertigung payments.

The timing is crucial - introduce the agreement early in separation discussions to protect both parties' interests. This approach works well for preventing future disputes, maintaining confidentiality, and managing post-employment obligations like non-compete clauses. It's especially important when dealing with sensitive positions or when the departure might affect company operations or client relationships.

• Basic Separation Package: Standard severance agreements covering mandatory Austrian benefits (Abfertigung) and basic termination terms
• Executive Level Agreement: Enhanced packages for senior management with complex non-compete clauses and extended benefits
• Restructuring Agreement: Specifically designed for company reorganizations, often including special incentives and transition support
• Mutual Termination Agreement: Focuses on amicable separations with negotiated terms beyond statutory requirements
• Early Retirement Package: Tailored for older employees, incorporating pension considerations and gradual transition arrangements

• HR Directors and Managers: Lead the drafting process and negotiations, ensuring compliance with Austrian labor laws and internal policies
• Legal Counsel: Review and refine Severance Agreement terms, particularly for complex cases or executive-level departures
• Departing Employees: Review, negotiate, and ultimately sign the agreement, often with their own legal representation
• Works Council (Betriebsrat): Consult on agreement terms when collective interests are affected, especially during restructuring
• Company Directors: Approve final terms and authorize payments, particularly for senior-level agreements

• Employment Details: Gather length of service, current salary, position, and any existing contractual obligations
• Payment Calculations: Determine mandatory Abfertigung amounts and any additional voluntary benefits
• Notice Periods: Check statutory and contractual notice requirements under Austrian labor law
• Post-Employment Terms: Define non-compete clauses, confidentiality requirements, and reference letter details
• Works Council Input: Document any necessary consultation with employee representatives
• Final Review: Use our platform to generate a comprehensive agreement that includes all required elements and meets Austrian legal standards

• Party Details: Full legal names, addresses, and roles of employer and employee
• Termination Terms: Clear statement of employment end date and separation conditions
• Financial Package: Detailed breakdown of Abfertigung and additional payments
• Mutual Release: Comprehensive waiver of claims from both parties
• Confidentiality: Specific obligations regarding company information and trade secrets
• Non-Competition: Time-limited and geographically specific restrictions under Austrian law
• Data Protection: GDPR-compliant provisions for handling personal information
• Works Council Approval: Documentation of required employee representative consultation

A Severance Agreement differs significantly from a Debt Settlement Agreement, though both involve financial settlements. While severance agreements focus on employment termination and future obligations, debt settlement agreements deal with resolving outstanding financial obligations between creditors and debtors.

• Purpose and Scope: Severance agreements handle employment separation benefits and post-employment obligations, while debt settlements focus purely on restructuring financial obligations
• Legal Framework: Severance agreements fall under Austrian labor law and BMSVG regulations, whereas debt settlements operate under civil and commercial debt laws
• Timing and Duration: Severance agreements typically activate upon employment termination with ongoing obligations, while debt settlements resolve immediate financial matters
• Protected Rights: Severance agreements must preserve mandatory employment benefits and consider Works Council input; debt settlements primarily protect creditor interests