Termination of employment in Germany

Termination of employment in Germany is clearly protected by labour law. Get an idea of how the termination of employment in Germany works.

Marle

6 minute read

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Updated on 19 May 2023

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Working

Termination of an employment contract in Germany might feel like a slap in the face for employees and often comes as a surprise. Try to see the upsides: as an unemployed or seeking employment in Germany, you’ll always be cushioned by a system that supports you through this phase so that you’ll soon be ready to start your new career challenge in Germany.

So what protection against unfair dismissal is provided by the labour law in Germany? When is an employer allowed to terminate an employment relationship and which guidelines have to be followed? We'll walk you through all these questions and help you with the next steps after your termination.

Termination of an employment contract might be a nightmare, especially if you're just setting up your expat life in Germany. Don't worry though, the labour law in Germany gives you strong backing when it comes to termination of your employment contract!

As a matter of fact, in Germany an employment agreement can only be terminated on the basis of a joint decision, upon the expiration of a fixed-term contract or if the employer/employee has been notified within a notice period in advance.

However, the employer's hands are clearly bound by the labour laws when it comes to terminating the employment contract. Whereas a fixed-term contract simply expires as agreed and the employer has to confirm this one month before expiry, a long-term contract can only be terminated for three reasons: personal reasons, behavioural reasons or operational reasons.

Termination of employment with a permanent contract

The Federal Ministry of Labour and Social Affairs has dived deep into each and every detail of the dismissal. So it comes as no surprise that every scenario has been played through at least once when it comes to the termination of employment in Germany where detailed guidelines have been drawn up to protect employees.

1. Dismissal for personal reasons In some cases, an employer may terminate an employment relationship on the basis of personal factors linked to the employee. This can happen, for example,

• if the employee isn't physically or mentally capable of performing the work agreed upon,
• if international employees can't obtain a work permit or
• if the employee is permanently incapacitated due to illness. Again, there are certain policies for dismissal in case of illness.

2. Behaviour-related dismissal When an employee stands out from the crowd through their unprofessional behaviour, this could be a reason for dismissal.

This's true when the behaviour violates the contract and you refuse to work, constantly being late or faking being unable to work. More obvious reasons for dismissal include verbal abuse or physical violence.

However, before a letter of dismissal arrives in your mailbox, the employer must first send you a warning letter and, if you repeatedly misbehave, he can dismiss you.

3. Termination for operational reasons Sometimes it's simply the economical hardship of the company that forces termination of employment. In other words: the company simply can no longer afford to pay your salary. For instance, if the business declines or the employer takes other organisational measures (e.g. changes in production methods, closure of the company), it's legal to dismiss.

When an employment relationship is terminated, there's a distinction between two groups:

• All employees who are covered by the general protection against dismissal and therefore fall under the Dismissal Protection Act
• Vulnerable groups covered by special protection against dismissal (e.g.pregnant employees).

The groups of persons who are specially protected and who may not be dismissed by the employer include

• Workers during voluntary military service or reserve service
• Employees during an aptitude exercise.

These are the groups of persons who are particularly protected by the Dismissal Protection Act:

• Pregnant employees who are protected until 4 months after giving birth
• Employees taking parental leave
• Employees who work 30 hours a week part-time during parental leave
• Employees who, without parental leave, work 30 hours a week part-time and are entitled to parental benefit within the first 14 months of the child's life
• Severely disabled people (with a degree of at least 50)
• Employees who are members of a works council
• Employees in a short-term incapacity to work (e.g. short-term care organisation for a relative)
• Employees who have to go on a nursing leave

Can you find yourself in one of the groups of people? Then you are bound by special protection against dismissal, so you cannot be dismissed so easily. To terminate your employment, the employer has to obtain the prior consent of the public authorities.

As an international, it's certainly not easy to navigate your way through the labour laws in Germany; after all, labour laws tend to be quite different from those in your home country, so you can't draw on your know-how from home. At the same time, it's essential to be familiar with the notice period you're entitled to - and in the end how much time you'll have to find a new job or even resist dismissal.

An employee's employment contract can be terminated with a notice period of 4 weeks (i.e. 28 calendar days) to the 15th or the end of a calendar month.

This period of notice applies to both sides, employer and employee.

Means exactly: If you've decided to quit your job in mid-August, you have to give your notice before 31st August. In this case, your last working month will be September.

Termination during the probationary period in Germany

The probationary period is your time to shine with your expertise and win over your manager to keep you on the team. Feel that your job isn't quite fulfilling for you? Well, then you can simply resign from your job with a short period of notice, and vice versa.

During the probationary period, there's a notice period of just 2 weeks.

Your probationary period is longer than 6 months? In exceptional cases only, your probationary period may be longer than 6 months. However, if that's the case, you'll be entitled to terminate your employment with 4 weeks' notice once you've reached the 6-month minimum.

Extended notice periods in Germany for long-term employees

Not all notice periods are the same and so there are one or two exceptions - perhaps even working in your favour!

There are extended notice periods compared to basic notice periods based on how long you've been working in the company:

• After 2 years in the company: 1 month to the end of the month
• After 5 years in the company: 2 months to the end of the month
• After 8 years in the company: 3 months to the end of the month
• After 10 years in the company: 4 months to the end of the month
• After 12 years in the company: 5 months to the end of the month
• After 15 years in the company: 6 months to the end of the month
• After 20 years in the company: 7 months to end of month

Keep in mind, though, that these are the notice periods determined by law. Typically you'll find in your employment contract the notice period set by the employee or you can check with the works council.

Truth to be told, a dismissal isn't something you'd wish to experience at some stage in your life. For this reason, people are often rather clueless about how this process takes a course in the first place.

Here's the quick walkthrough: 1. The notice of termination must be in written form, both from the employer and the employee. Sending a notice of termination via fax, e-mail, Whatsapp or other social media simply isn't valid. 2. According to the law, the notice period (Kündigungsfrist) is 4 weeks (i.e. 28 calendar days); the longer you've been with the company, the more extended the notice period. Your employment contract states how long the notice period is for your case. 3. Does your company have a works council? In that case they have to be informed prior to your dismissal. 4. Your notice of termination must be legally transmitted, either by personal delivery and acceptance by the recipient.

Do you feel that your dismissal isn't legal? Then you have the full right to take legal action against a dismissal. However, you need to follow certain guidelines here:

You must lodge your complaint with the competent labour court within three weeks of receiving your written notice

If you’ve missed the 3 weeks' deadline you can apply to the labour court for a retroactive claim. Your application must then contain credible reasons why the application is delayed. Oh yes, you see for yourself: punctuality matters a great deal to the Germans.

In the dismissal protection lawsuit, you have to request the labour court to examine the dismissal. In this way, they are officially called upon to review the legal validity of the termination of the employment relationship. Feel free to get help from a lawyer for the lawsuit.

One of your first trips after your dismissal should take you to the Agentur für Arbeit ("employment agency"). At the latest three months before your employment ends, you must report to the Agentur für Arbeit; or at the latest three days after you are informed of your termination. This will allow you to obtain the unemployment benefits to which you are entitled.

Your obligation to register with the employment agency is designed to prevent you from slipping from job search to unemployment or to cut your time in unemployment down to a minimum. The employment agency offers you help in finding a new job at an early stage. So, don't lose hope, your next career in Germany is already waiting for you!

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