If one party wants to terminate the contract, the other does not, it can create problems with the contracts. In the event of reciprocal termination, there are no adverse or negative consequences, unless the contract affects other contracts. The contract is no longer applicable once terminated. Due to the nature of an agreement, the terms can be defined and agreed by both parties in reason. This may involve a negotiation process. If you have set a date in your agreement, it will take effect. There are always technical elements like manual delivery or delivery by an agent who can trigger the contract. It is important to go with a qualified professional if you are not sure in any way. Such aspects must be set out in the agreement. Do you have questions about drafting or evaluating a transaction contract or would you like to discuss a deal? Please contact our Labour Law section.
The most important condition for the performance of a valid reciprocal termination contract is the existence of „reasonable performance criteria“ arising from the court decision. The Supreme Court applies the validity of the reciprocal termination contract to the existence of a reasonable benefit from the worker`s point of view. The main reason for the Supreme Court`s „reasonable utility“ criteria in reciprocal termination agreements is that, since the worker is granted termination of the employment contract by the employer with severance pay and severance pay, the preference for another method, which is not more advantageous, cannot be considered appropriate at the normal stage of his life. This is why, in several cases, and particularly in cases where the request for a reciprocal termination agreement is made by an employer, the Supreme Court expects, in addition to the legal rights allegedly paid in the event of dismissal by the employer and not by a reciprocal termination agreement, certain additional benefits equal to „reasonable benefits“. Several Supreme Court decisions have invalidated reciprocal termination agreements, effectively terminating the use of „employer termination“ in the absence of additional payments or benefits and, as a result, related re-employment remedies have been accepted by the Supreme Court. On the other hand, when a worker is subject to a reciprocity contract, the payment of legal rights under a reciprocal termination contract – which would not have been paid in the event of ordinary termination – is considered a „reasonable benefit“. As a result, reciprocal termination agreements executed using such a method are generally considered valid. The termination of an employment contract by a reciprocal termination agreement means that, in such circumstances, the worker does not benefit from the employment security provisions of Article 18 and the related articles of the Labour Act and introduces an action for reintroducation. However, an agreement with mutual termination may be annulled if there is a corrupt intention of the parties in the performance of the reciprocal termination contract or if a staff member has signed the reciprocal termination contract with a reservation.