1. Seek advice: You’re not on your own
As soon as your employer terminates your employment, you are strongly advised to seek legal advice. Since brief deadlines begin to run upon receipt of the notice of termination, you should act as soon as possible and contact a lawyer.
2. You’ve got three weeks to file a lawsuit
Employees whose employment has been terminated can have the termination reviewed by the labour court. The court will determine whether the dismissal was effective and justified or whether the dismissal was invalid - in which case your employer must continue to employ you. Employers and employees often also use the court proceedings to negotiate a severance payment.
However, if you wish to challenge the termination, it is essential that you do this within three weeks of receiving the notice, i.e. the moment when you hold the notice on a piece of paper in your hands (or it lands in your mailbox). Otherwise it will be irretrievably deemed valid. In that case, your employer will have no incentive to negotiate the terms of your exit with you.
3. You may be protected by the Unfair Dismissal Protection Act
In companies with more than 10 employees, workers are covered by the Unfair Dismissal Protection Act after six months of employment. Under this, the employer can only give effective and lawful notice of termination if the termination is justified by a reason recognised by the Act. Reasons for termination can be:
- Operational: E.g. the company is reshuffling and as a result your job will be made redundant
- Person-related: E.g. a truck driver loses their driving licence and therefore can no longer be employed, or an employee is permanently ill and can no longer perform their job.
- Behavioural: The employee violates an obligation under their employment contract. For example, they do not show up for work or they steal company property.
The result of the Unfair Dismissal Protection Act is that it becomes much more difficult for the employer to issue a valid termination. Whether a termination is justified will be determined after an overall view of all the circumstances of the individual case following a weighing of interests, so each termination must be examined on its own merits. For this reason alone, it is always advisable to have your termination checked by a specialist in the field of law.
The reason for termination does not usually have to be stated in the termination letter itself.
4. You don’t have to sign anything
More often than not, the employer will request your signature to confirm that you have received the notice of termination. You are under no obligation to provide this signature.
Your employer may also offer you a severance agreement along with the notice, which may include a severance payment. Be sure to seek legal advice before signing this severance agreement. If you sign a termination agreement, you may be at a disadvantage vis-à-vis the Federal Employment Agency, which may refuse to pay benefits for up to 12 weeks.
That said, as always, do not sign anything unless you fully understand the terms of the agreement.
5. You might be able to secure a severance payment
Under German labour law, there is no definite requirement for a severance payment in most cases. Either a termination is lawful, in which case the employer does not have to pay severance, or the termination is unlawful, in which case the employment relationship continues uninterrupted and again there is no entitlement to severance pay.
However, in cases where the employer and employee mutually agree to terminate the employment relationship, they often agree on the payment of a severance package as compensation for the loss of employment.
The severance payment is freely negotiated in accordance with the likelihood of the employee being successful in taking legal action against an unfair dismissal. Generally, however, half a month's gross salary per year of employment is considered a rough guideline. Depending on the circumstances of each individual case, the severance payment may be considerably higher or lower than this benchmark.
6. Look out for your notice period
Typically, an employment relationship can only be terminated subject to a notice period. The notice periods are usually specified in your employment contract; the statutory minimum notice periods are listed in Section 622 of the German Civil Code (BGB). This means you will often continue working for your employer for a set period of time after receiving your termination notice.
During this period, the employment relationship will continue in the usual way: you are required to continue working and your employer is required to continue paying you. During the notice period, you may take your remaining vacation and may be able to use up overtime.
Occasionally the company will put you on garden leave: this means that the company waives its right to your work performance, but continues to pay your salary.
Under exceptional circumstances, for example in the event of serious breaches of duty by the employee, the company can terminate the employment relationship without notice. In this case, the employment relationship ends immediately.
7. You can file for unemployment benefits
Anyone who has paid contributions to the mandatory unemployment benefits fund for at least one year may be entitled to unemployment benefits after being laid off.
If you have received a termination, you must first register as looking for work within three days (by telephone, online, in writing or in person). You must also register as unemployed with the Federal Employment Agency no later than the first day of unemployment - usually in person.