Employment contracts may be terminated by mutual agreement between the parties. The legal basis for mutual termination agreements is rooted in “contractual freedom” as a constitutional right. The employer and the worker terminate an existing employment contract through a “reciprocal termination contract.” Sometimes, during the negotiation of a separation agreement, the worker will ask the employer for reciprocal release of rights and compensation, as well as a duty of confidentiality. What does the employer have to take before accepting this application? The labour law does not have a specific provision on reciprocal redundancy agreements. However, Supreme Court decisions have repeatedly emphasized that reciprocal termination agreements, since they are in accordance with a “cancellation contract,” are governed by the general provisions of the law of obligations with respect to legal status. 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. In the event of the cancellation of reciprocal termination agreements, reinstatement action may be brought if the conditions for the application of the employment security provisions under Article 18 of the Labour Act are met. In this context, the Tribunal found that the applicant had not been constructively dismissed.
The applicant`s employment was terminated by mutual agreement and the letter of recognition served as a valid and binding agreement to terminate the applicant`s employment. For example, if a worker is threatened with dismissal if he does not resign, the court may characterize such a “resignation” as constructive dismissal. However, as found by the British authority Sheffield/Oxford Controls  ICR 396, if the resignation is motivated by other factors such as the offer of financial benefits or a letter of reference, termination may constitute voluntary resignation, regardless of whether the worker has been asked to resign or be dismissed.