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Termination by mutual agreement is one of the most commonly used ways to end an employment relationship by consensus. However, despite appearing to be a simple mechanism, the law imposes strict formal requirements, and failure to comply with them may entail serious consequences for both employers and employees.
In an article for RH Magazine, Carlos de Oliveira Sarmento, Senior Associate in the Labour practice at CCA Law Firm, explains that a termination agreement is only valid if it contains three mandatory elements: the date of execution, the termination date, and an express reference to the legal seven‑day period during which the employee may revoke the agreement. The absence of this last reference, often overlooked, has been considered by the courts as grounds for nullity of the agreement, leading to the reinstatement of the employee and the return of amounts paid.
The lawyer also warns that although attention usually focuses on negotiation, “it is in the formal details that the greatest risks for companies arise”, reinforcing the importance of rigorous legal oversight.
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- RH MAGAZINE