Problems and conflicts in the workplace can be tough to deal with, especially when you’re in a new country and aren’t sure of your rights or the correct process. Employment law in Germany outlines procedures that must be followed in the case of workplace conflict and protects employees working in Germany from unfair dismissal. Here's what you need to know about termination of employment in Germany.
Workplace conflicts
Simple disagreements are a normal part of everyday working life, but if you are experiencing a conflict that is affecting your ability to work effectively (for instance discrimination, harassment or inappropriate behaviour), it is important to seek advice.
Most companies will have an HR (Personal) department which will be able to intervene to mediate the situation. Works councils, employee associations and trade unions also continue to have a strong presence in German organisations; if you are a member, you can ask for advice from a representative. You might also consider seeking legal advice from a lawyer.
Losing your job in Germany
Almost all employees in Germany are protected from random or unfair dismissal by the Employment Protection Act (Kündigungsschutzgesetz). Special protection, effectively prohibiting dismissal, is also given to:
Note that this protection does not apply to everyone: if you have worked in your position for less than six months, or your company employs fewer than 10 individuals, you are not protected and your termination does not need to be justified, so long as it is not discriminatory.
Otherwise, employers must prove that they have good cause to terminate an employment contract. Whether due to a temporary contract not being renewed, a company restructure or workplace misconduct, there are several reasons why you might lose your job in Germany:
Expiry of a temporary contract
If you have a temporary work contract with a specified end date, your employer is not obliged to renew it. They must inform you at least a month in advance if they are not intending to renew.
If your employer wishes to terminate the temporary contract early, they must abide by the rules and procedures for the termination of permanent contracts, set out below.
Termination of a permanent contract
If you have a permanent work contract, you can only be dismissed under certain circumstances. You must almost always be notified in advance by your employer, and you may be entitled to severance pay. There are three common reasons for the termination of a permanent contract:
Business-related dismissal/redundancy (betriebsbedingte Kündigung)
If your company is undergoing a restructuring, is facing significant financial difficulties or is shutting down altogether, this can be a viable reason for terminating a contract. Your employer must prove that your job position no longer exists and that there are no other vacant positions in the company that are suitable for you. You are entitled to a notice period, even if your company goes insolvent.
Conduct-related dismissal (verhaltensbedingte Kündigung)
If you continually breach the employment terms set out in your contract, for instance behaving inappropriately or not performing satisfactorily, you can be dismissed based on your conduct. In order to be dismissed this way, German law requires that at least one prior warning (Abwarnung) has been given to you, in writing. This might set out a strategy for improving your performance, such as providing training or adjusting your role.
In the case of a severe breach of the employment agreement (e.g. theft, embezzlement or abuse), an employer can give a summary dismissal (fristlose/außerordentliche Kündigung) and terminate employment immediately. Your employer needs a very good reason to dismiss you in this way, and they must act within two weeks of finding out about the (alleged) misconduct.
Person-related dismissal (personenbedingte Kündigung)
German employers are legally allowed to dismiss you if you are unable to work long-term due to illness. Your employer must demonstrate that you are not fulfilling the requirements of the role as laid out in your contract. If you are dismissed due to illness, you can still continue to claim sickness benefit through your health insurance.
Termination process & notice period
If your employer wishes to terminate your contract then they must provide you with a notice of dismissal in writing; a verbal notice is not sufficient.
Usually, a notice period will apply. The statutory notice period varies from two weeks during your probation period (Probezeit), to seven months if you have worked at the company for longer than 20 years. The period of notice your employer must give you is set out in your employment contract. You will continue to work regular hours and be paid your salary during your notice period. Usually, your employer is not permitted to pay you in lieu of notice without your expressed consent. In the case of summary dismissal, no notice period is required.
You have the option to contest the dismissal by filing a legal complaint (Klage) in the labour court (Arbeitsgericht), but you must do this within three weeks of the date you were given notice. You may be able to negotiate severance pay (Abfindung) from your employer.
Your employer might ask you to sign a separation agreement (Aufhebungsvertrag), an agreement stating that both sides have mutually agreed to end the employment contract. Once you have signed, you will not be in the position to make further demands, such as requesting severance pay. Therefore you should only sign the agreement if you agree to the termination of the employment and accept the terms. You should consult with a lawyer first.
Entitlements & severance pay (Abfindung)
If you are dismissed, you are legally entitled to demand, from your employer, both a reference and documentation of your deregistration from the social security system (Abmeldung zu Sozialversicherung). You can also ask to be provided with a printout of your electronic income tax certificate (Lohnsteuerbescheinigung), which you may require if you wish to claim a tax refund on your income tax return. You may also be entitled to remuneration for any unused holiday leave.
There is no statutory severance in Germany. Employees are usually only entitled to severance payments under collective bargaining agreements. In practice, however, employers often compensate dismissed employees to avoid protracted negotiations over dismissals. The severance payment is usually around 50% of the monthly salary per year you have worked at the company. The actual amount, however, will depend on the circumstances of your dismissal and your company.
Applying for unemployment benefit
Depending on the reasons for your dismissal, and the amount of time you have contributed to social security schemes, you may be entitled to receive unemployment benefit (Arbeitslosengeld). You should apply as soon as you receive notice of your dismissal.
Looking for a new job
Losing your job can be a shock. You might need to take some time to process everything, but at some point, you may start to view your situation in a positive light. Finding a new job, although it might seem scary, can also be an exciting opportunity. There are many international companies in Germany looking for expats. Find your new position on our Jobs in Germany page.