In principle, the employer is not obliged to pay severance pay. Severance pay is, therefore, generally based on a mutual agreement between the employer and the employee.
Exceptions are usually only found in two rare situations. The labour court may, upon application, terminate the employment relationship and order the employer to pay if the termination was invalid and the employee cannot reasonably be expected to continue the employment relationship. This situation applies, for example, if the employer has made disparaging remarks about the employee. However, unreasonableness is not assumed lightly.
Furthermore, the employer is to be ordered to pay severance if stipulated in the employment contract or the like that termination for operational reasons directly leads to a claim for severance pay.
Severance pay, therefore, usually results from a settlement. Although the employee has no legal claim to severance pay in principle, the employer often agrees to such a settlement if they see a risk of losing the case. This situation would have the consequence that he would have to pay the employer wages in the period from the notice of termination to the pronounced invalidity even if no work was done during this period (§ 615 BGB).