Termination of employment
What are the termination requirements, types and notice periods in Germany?
Germany is an employee-friendly country. Firstly, the notice period must be observed. In addition, the Dismissal Protection Act (“Kündigungsschutzgesetz”) grants employees far-reaching rights, so that termination by the employer is often invalid. As a result, legal actions against dismissal are successful and end with high severance payments . In this blog, we outline the requirements, types and deadlines for termination of employment in Germany .
If you have received a job termination letter contact the experts at AHS Lawyers immediately. We are specialist labor and employment lawyers and, thanks to our outstanding experience, we can assess the effectiveness of a termination , represent you in dismissal protection proceedings and negotiate severance pay . Please note that there is only a 3-week notice period for filing a claim.
Compliance with German notice periods
Certain notice periods apply to terminations of employment in Germany . The first requirement for an effective termination is therefore that the employer complies with the statutory notice period. After the probationary period, the statutory minimum notice period in Germany for both the employer and the employee is four weeks to the 15th or last day of a calendar month (Section 622 BGB).However, the notice period for the employer increases progressively with the employee's seniority:
| Years of service | Notice period | Termination is effective to… |
|---|---|---|
| Within first 6 months | 2 weeks | 2 weeks after receiving the termination |
| During first 2 years | 4 weeks | the 15th or to the end of a calender month |
| After 2 years | 1 month | the end of calendar month |
| After 5 years | 2 months | the end of calendar month |
| After 8 years | 3 months | the end of calendar month |
| After 10 years | 4 months | the end of calendar month |
| After 12 years | 5 months | the end of calendar month |
| After 15 years | 6 months | the end of calendar month |
| After 20 years | 7 months | the end of calendar month |
Requirements and reasons for termination of employment
An employer's freedom to terminate an employment relationship is primarily governed by the German Civil Code (BGB) and the Dismissal Protection Act. German labor law sets high standards for the employer when terminating an employment contract . In particular, the application of the German Dismissal Protection Act has a strong impact on the termination of employees .
However, the Dismissal Protection Act does not apply to all terminations. There are two requirements :
- an employer generally employs more than ten employees and
- the employee has worked in the same company or business establishment for six months without interruption.
If the Dismissal Protection Act applies, a termination of employment is only legally valid if it is " socially justified ". This, in turn, requires that it can be based on one of the three grounds for termination . Accordingly, the Termination must be
- for personal reasons , or
- for reasons relating to the employee's conduct , or
- for operational reasons and must also be socially justified in other respects.
According to the Dismissal Protection Act, a distinction is made between terminations for personal, conduct-related and for operational reasons. In the event of a legal dispute over the validity of the termination, the employer must explain and prove the existence of the grounds for termination - which is often difficult and therefore leads to severance payments. However, the law does not does not rule out the possibility of an employee being dismissed. If the conditions for termination for personal, conduct-related or operational reasons are met, the employer can terminate the employment relationship by ordinary notice .
Termination for personal, conduct-related and operational reasons
Termination for personal reasons applies in particular to physical or mental impairments, prolonged absences due to illness and reduced capacity to work.
Termination for conduct-related reasons usually requires that the employee has been given a warning. Conduct-related reasons include intentional or grossly negligent breach of contract.
Termination for operational reasons requires proof from the employer that the dismissal of the employee was necessary for compelling operational reasons, such as restructuring. These measures (set out in a management decision) must lead to the loss of the employee's job and there must be no alternative job available for the employee. Furthermore, terminations due to operational restructuring are only socially justified if the correct "social" criteria have been applied.
Among employees with comparable personal and professional qualifications and comparable jobs, the employer must select the employee with the weakest social standing based on several criteria, including age, length of service, maintenance obligations towards dependents and severe disability (so-called "social selection").
In the case of serious breaches of duty, the employment relationship can also be terminated by either party for good cause with immediate effect and without observing a notice period. The very rare grounds for termination without notice include criminal offenses against the employer. The employer must give notice of termination within two weeks of becoming aware of the relevant circumstances.
If the Dismissal Protection Act does not apply, no reason for dismissal is required. However, the termination must comply with the applicable notice period as well as the principles of good faith and morality .
