Unfair Dismissal in Germany: Processes and Employees’ Rights

Unfair Dismissal in Germany: Processes and Employees’ Rights

Have you received notice of termination and are wondering how to proceed against it? If you have doubts about the validity of your dismissal, it may make sense to file a complaint against dismissal. Such an action aims to have the labour court determine that the discharge is invalid. If this is the case and the employer cannot invoke other grounds for termination, the court will declare the employment relationship to continue.

In any case, ensure that you act promptly after receiving the notice of termination and observe the legally prescribed period of three weeks.

Schlun & Elseven Rechtsanwälte offers comprehensive legal assistance in labour law to both employees and workers. We provide support that is both competent and committed to bringing employment law disputes to a quick and effective conclusion, whether through mediation or litigation. Please, do not hesitate to contact us to benefit from our expertise.

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General Provisions: Action for Protection against Dismissal in Germany

An action for protection against dismissal can only be brought within three weeks of the dismissal (§ 4 sentence 1 KSchG). However, make sure to take legal action in good time. The deadlines must be observed at all costs.

Ineffective Terminations of Employment

There are many examples in which a termination is invalid. For example, an employer must always give notice in writing. It is invalid if they do not do so (§ 623 BGB).

A dismissal may also be invalid if it is given to a pregnant woman during pregnancy and without the prior consent of the occupational health and safety authority (§ 17 Maternity Protection Act). If the employer did not consult a works councilnsulted before the dismissal, the dismissal is also invalid (§ 102 Works Constitution Act). If one of these cases applies to you, you can expect your action for protection against dismissal to be successful.

However, it is often advisable to file a complaint, even in situations that are not so obvious. Were you dismissed on the pretext that you had committed a serious breach of duty, but it is not true? Were you dismissed for operational reasons, while younger colleagues who have been employed for less time and do the same work as you were not dismissed? Has your employer dismissed you for misconduct, but you have only been warned in vague terms about this alleged breach of duty? If this is the case, you should doubt the effectiveness of the employer’s notice.

In such cases, it makes sense to seek legal advice, as an action for protection against dismissal is only promising if it can be well substantiated.

The Unfair Dismissal Procedure in Germany

As a rule, a “conciliation hearing” takes place within two weeks after the complaint has been filed (§ 61a (2) Labour Court Act). Often a settlement is reached there.

The employee and employer can agree on terminating the employment relationship and paying a severance package. With a view to the settlement, an action for protection against dismissal can also be brought if it is clear to the employee from the outset that no continuation of the employment relationship is desired.

If no agreement is reached, a chamber hearing is held before the chamber, which is fully staffed. The time between the conciliation and chamber hearings is usually between three and five months.

Before the hearing, the employer is allowed to respond to the complaint in writing. The employee is then in a position to respond in writing. Before the chamber, the parties can try again to find a settlement.

If this is not the case, the chamber decides, and the dismissal protection proceedings end unless an appeal is filed with the regional labour court.

Is there a Right to Severance Payment in Germany?

In principle, the employer is not obliged to pay severance pay. Severance pay is, therefore, generally based on a mutual agreement between the employer and the employee.

Exceptions are usually only found in two rare situations. The labour court may, upon application, terminate the employment relationship and order the employer to pay if the termination was invalid and the employee cannot reasonably be expected to continue the employment relationship. This situation applies, for example, if the employer has made disparaging remarks about the employee. However, unreasonableness is not assumed lightly.

Furthermore, the employer is to be ordered to pay severance if stipulated in the employment contract or the like that termination for operational reasons directly leads to a claim for severance pay.

Severance pay, therefore, usually results from a settlement. Although the employee has no legal claim to severance pay in principle, the employer often agrees to such a settlement if they see a risk of losing the case. This situation would have the consequence that he would have to pay the employer wages in the period from the notice of termination to the pronounced invalidity even if no work was done during this period (§ 615 BGB).

FAQ: Protection Against Dismissal in Germany

Protection against dismissal in German labour law is generally understood as the legal and contractual regulations that make it difficult or impossible to terminate an employment relationship. The Protection Against Dismissal Act (“KSchG”) is particularly relevant in this context; corresponding regulations can also be found in the Maternity Protection Act (“MuSchG”), the Vocational Training Act (“BBiG”), or concerning severely disabled persons in the Social Code IX (“SGB IX”).

In addition, the termination of the employment relationship can be made more difficult by regulations in the employment contract or collective agreements.

Basically, a distinction is made between general and special protection against dismissal:

General protection against dismissal under the KSchG applies to employees if they are

  • have worked in the same establishment or company without interruption for more than six months (§ 1(1) KSchG), and
  • if this enterprise is not a small enterprise (§ 23 (1) KSchG).

If only one of the two requirements is missing, the KSchG does not apply.

A “small business” is a business in which, as a rule, only ten or fewer employees are employed. Part-time employees are counted proportionately, while trainees are not. Concerning temporary workers, the Federal Labour Court (“BAG”) has ruled that they are to be included in the calculation of the size of the enterprise if their deployment is based on a usually existing need for personnel (BAG, judgement of 24 January 2013, 2 AZR 140/12).

Until 31 December 2003, more than five (i.e. at least 5.25) employees were sufficient for the applicability of the Dismissal Protection Act. A person who had protection against dismissal under this old regulation on 31 December 2003 retains this protection against dismissal even if more than five “old employees” continue to be employed in the enterprise when the notice of dismissal is given.

However, if such “old employees” leave the employment relationship and the threshold value is reduced to five or less, all others lose their previous protection against dismissal. In this case, only the small business threshold of more than 10 employees is decisive according to the new legal situation (cf. § 23 (1) sentence 2 and 3 KSchG).

In the absence of the applicability of the KSchG, employers in small businesses can in principle terminate their employees at any time – subject to the applicable notice periods.

However, the Federal Labour Court (Bundesarbeitsgericht, BAG) has ruled that dismissals in small businesses must also comply with a minimum level of social consideration required by Article 12 German Constitution (Grundgesetz, GG), otherwise they are invalid due to a breach of good faith (BAG, judgement of 21 February 2001 – 2 AZR 15/00).

The Protection Against Dismissal Act offers employees considerable protection against ordinary dismissals by their employer. This protection means such a dismissal is only effective if it is socially justified. This, in turn, requires that the dismissal can be based on one of the three grounds for dismissal listed in § 1(2) KSchG. Accordingly, the dismissal must

  • for reasons relating to the person or
  • grounds relating to the employee’s conduct, or
  • for operational reasons and must also be socially justified in other respects.

Accordingly, a distinction is made between dismissal for personal reasons, for reasons of conduct and operational reasons. In the event of a legal dispute on the validity of the discharge, the employer must explain and prove the existence of the grounds for dismissal. However, the KSchG does not make an employee ineligible for release. If the conditions for dismissal for personal, behavioural or operational reasons as set out in the KSchG actually exist, the employer may also terminate the employment relationship by ordinary notice.

Moreover, the employer may also give extraordinary notice of termination if there is an “important reason” according to § 626 (1) BGB. Such good cause is a severe reason for termination, which makes it impossible for the terminating party to wait until the expiry of the ordinary notice period.

If you have received a notice of termination, you must quickly decide whether you want to take action against the termination. The law prescribes a period of three weeks for bringing an action for protection against dismissal (§ 4 p. 1 KSchG). If this three-week period is missed, the dismissal is considered legally effective from the beginning (§ 7 KSchG) and taking action is practically futile.

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Practice Group: German Employment Law

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German Employment Law

Dr. Thomas Bichat

Certified Specialist Lawyer in Employment Law

Jens Schmidt

Certified Specialist Lawyer in Employment Law

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