Termination of Employment and Employment Termination Agreements
Terminating employment carries certain risks. It is within the employer’s right to terminate an employee’s employment contract with the company, but many legal aspects need to be considered. Firstly, the dismissal must be fair. Fairness refers to the reason for dismissal (ensuring that discrimination has not played a role in the dismissal) and how the dismissal is carried out. Secondly, the required notice periods need to be respected. Such notice periods can differ depending on how long the employee has been a part of the company. Thirdly, according to § 623 BGB, the termination intent should be provided in writing.
The above are the rules for ordinary termination. However, there are also grounds for extraordinary termination where notice periods do not apply. Extraordinary terminations are allowed under § 626 Paragraph 1 BGB. Extraordinary termination needs to have a reason given, as it is only given in exceptional cases, namely in serious misconduct, such as refusal to work and criminal offences. Employers should be wary in such cases, as extraordinary dismissal can leave them open to legal challenges. Consulting with a legal professional in advance provides peace of mind before making the decision to issue the dismissal.
Terminations can also be arranged by contract through employment termination agreements.