Sprinter clause in the termination agreement – maximise severance pay

A sprinter clause (“Sprinterklausel” or “Turboklausel”) in the termination agreement allows the employee to leave the company prematurely – and also receive a so-called ‘sprinter bonus’. In total, the employee receives a higher severance payment when exercising the clause, which usually includes the amount of the saved salaries up to the originally planned termination date. The following blog article explains the advantages and disadvantages.

Sprinter clause – what is it exactly?

The ‘sprinter’ clause, also known as the ‘turbo’ clause, is often found in (unwinding and) termination agreements. It allows the employee to end the employment relationship prematurely, i.e. before reaching the termination date agreed in the termination agreement.

In this case, a (future) termination date is initially set as normal. The employee therefore remains with the company as normal until this date. In addition, a sprinter clause is agreed in the termination agreement. This allows the employee (only) to terminate the employment relationship before this specified date – if they wish. This means that they do not have to observe a notice period, but can agree a shorter notice period.

The trick: as a rule, the employee receives higher severance pay when they exercise this option. This includes at least part of the amount of salaries saved up to the originally planned termination date. So agreeing a sprinter clause offers numerous advantages for both employees and employers.

Advantages for employees

• Increased severance pay: In the event of early termination of the employment relationship, the salaries saved up to the planned end date are included in the severance pay. This almost always leads to a higher payout.
• Potential double earnings: The employee can start a new job before the end date. He still receives his severance pay and can theoretically benefit from ‘double earnings’.
• Tax advantages: As severance pay, the sprinter bonus is exempt from social security contributions, so the employee does not have to pay social security contributions. In addition, the severance pay, including the sprinter bonus, may be tax deductible.
• Fast entry into a new job: The employee can take up a new position quickly and flexibly as soon as they find a suitable position before the agreed termination date. Without the clause, a change before the end of the notice period would often only be possible with the consent of the old employer.
• No ‘gap in your CV’: The sprinter clause enables the employee to avoid gaps in their CV. This means that they can start a new job ‘seamlessly’.
• I.d.R. no ALG problems: In theory, exercising the sprinter clause not only affects the employment relationship. It also affects the employee’s entitlement to unemployment benefit (ALG) from the Federal Employment Agency. If, for example, an employee exercises the sprinter clause in the termination agreement without finding new employment, the Federal Employment Agency can order the unemployment benefit to be suspended. This would mean that up to 60% of the sprinter bonus received would be offset against the unemployment benefit payments. From a purely practical point of view, however, this should happen very rarely. As a rule, the sprinter clause is only exercised if the new job is already certain (employment contract signed by both parties).

Advantages for employers

• Savings on social security contributions: Since severance payments are exempt from social security contributions, the employer saves on the employer’s social security contributions when the employment relationship is terminated prematurely.
• Faster termination: If the employer terminates the contract for operational reasons, it is also in the employer’s interest to terminate the contract as quickly as possible – and thus to include the sprinter clause in the termination agreement.

Formalities when exercising the sprinter clause

When exercising the sprinter clause, certain formalities must be observed. The Federal Labour Court has ruled that the employee’s declaration of premature termination of the employment relationship constitutes a termination of the contract, which must therefore be made in writing in accordance with § 623 BGB. A verbal declaration or a message sent by email or fax would therefore not be legally effective. The employee must submit a written, signed declaration in the original. If this is not done correctly, the employment relationship ends on the originally agreed date and the claim to the sprinter severance payment lapses.

Should you consult a lawyer for a sprinter clause?

Given the formal requirements and the possible consequences of errors in the application of the sprinter clause in the termination agreement, it is advisable to consult a lawyer when agreeing and exercising the sprinter clause. We therefore recommend having not only the contractual design but also the exercise of the sprinter clause checked by an expert.

A lawyer can help you avoid pitfalls and find a formulation for your individual case. Nevertheless, we have provided a sample sprinter/turbo clause for our readers below. This should give you a feel for what we are actually writing about here all the time. The usual disclaimer at this point: ‘Handle with Care’. Of course, we recommend always discussing the sprinter clause with a lawyer.

Example of a sprinter/turbo clause

Here is an example of a sprinter/turbo clause that is used in termination agreements – however, it must of course be checked and adapted in individual cases:

“The employee has the right to terminate the employment relationship prematurely. The termination must be made with a notice period of one week by means of a unilateral declaration of dissolution that requires receipt. Upon submission of the declaration of termination, all legal consequences associated with the end of the employment relationship under this agreement shall take effect at the earlier termination date. The severance payment agreed in accordance with point […] shall be increased by […] euros for each full month of early departure, and pro rata for partial months, based on a 30-day month (‘sprinter bonus’). The severance payment and sprinter bonus shall be due for payment at the end of the month following the month of the announcement.”