Change notice: requirements, deadlines, and severance explained

An employer can issue a change notice (Änderungskündigung) to end an existing employment contract while simultaneously offering a continuation under modified conditions. The goal of a change notice is not primarily to terminate employment, but to continue it under altered terms. Upon receiving a change notice, an employee can accept the modifications, reject them, or accept them with reservation. This article explains these options and the effects on the existing employment relationship, including potential legal and severance implications.

Definition of a change notice

A change notice (Änderungskündigung) consists of two elements: (1) termination of the existing contract, and (2) simultaneous offer to continue employment under modified conditions. Like any termination, a change notice must meet all legal requirements, including those under the Protection Against Dismissal Act (KSchG) and formal requirements such as written notice and procedural compliance.¹

Social justification for a change notice

A change notice is socially justified if the proposed changes are based on operational, behavioral, or personal grounds. It must respect the interests of both employer and employee and comply with proportionality requirements.

Operational change notice

Among all types, operational change notices are the most common in practice. Employers issue them to align working conditions with changing business circumstances. Examples include adjusting work hours due to reduced orders or revenue, or relocating employees due to a change of workplace.

In a legal challenge, the employer must demonstrate:

• The original position cannot continue due to urgent operational needs, such as reduced revenue or workload.
• Continuation under previous conditions is impossible.
• A proper social selection process has been conducted when only a subset of comparable employees is affected. “Comparable” means employees performing similar tasks and who could be reassigned to equivalent positions. Social criteria include length of service, age, dependents, and recognized disability.² Employees with higher protection needs should be shielded from dismissal.
• Changes must be proportional; the new conditions should not exceed what is necessary to address operational changes. Any proposal violating equal treatment principles is disproportionate and may render the notice invalid.

Personal change notice

A personal change notice applies when an employee is no longer fully capable of performing duties due to professional, physical, or psychological factors. Examples include:

• An employee injured in an accident can no longer perform prior warehouse tasks but can work in lighter roles.
• Chronic illness restricting work to part-time.
• Loss of professional license or certification.

The employer must prove:

• Employee’s ability to perform contract duties is impaired (negative prognosis).
• Business operations are significantly affected, e.g., strain on colleagues or need for replacement hires.
• Proposed changes, such as reassignment to lighter duties, must respect both employee and employer interests.
• Changes must be proportional; less intrusive alternatives should be considered first.

Behavioral change notice

In practice, behavioral change notices are rare. They are issued if the employee’s conduct makes continued employment in the current role unreasonable. Example: an employee performs well but causes repeated conflicts. The employer may reassign the employee to a different location or department.

In legal proceedings, the employer must demonstrate:

• Breach of contractual duties.
• Prior warning has been issued.
• No less severe measures are feasible.
• Proposed changes balance the interests of both parties.

General requirements for a change notice

Change notices must meet all legal formalities, including:

• Clarity: The offer must specify new working conditions. Ambiguous references to collective agreements are insufficient.
• Written form: Electronic notifications like email or messaging apps are invalid.
• Works council consultation: If applicable, prior consultation is mandatory with full disclosure of rationale. Failure renders the notice invalid.
• Notice periods: Statutory or contractual notice periods must be respected.

Employee options

When an employee receives a change notice, the first and most important step is to seek advice immediately. The works council cannot provide legal counsel, but it can serve as a first point of contact for information or for referrals to a trade union or employment lawyer. These advisors can assess the employee’s specific situation and explain the rights under the Protection Against Dismissal Act (KSchG). Early consultation is crucial because the employee has only a three-week window from receipt of the notice to potentially file a legal challenge against the change notice.

After obtaining initial advice, it is important for the employee to clarify personal objectives. The following questions should guide the decision-making process: Do you want to remain with the company? Are the proposed changes acceptable in principle? Or would you prefer a transfer to another position?

Three options for action for employees

Based on these decisions, the employee generally has three possible courses of action:

• Unconditional acceptance: If the employee agrees with the new conditions, they can accept the change notice without reservation. The employment relationship continues under the modified terms. This decision is binding and cannot later be changed unilaterally.
• Conditional acceptance: In most cases, it is advisable to accept the change under reservation. This allows the employee to continue working under the new conditions while simultaneously having their legality reviewed in court. The reservation must be declared within the notice period, and no later than three weeks from receipt of the change notice. Advantage: If a legal challenge is filed within the three-week period and (1) the claim is successful, the employment relationship continues under the previous conditions; (2) if the claim is unsuccessful, the employment relationship continues under the modified terms.
• Rejection of the offer: The employee may refuse the proposed changes entirely. In this case, the change notice effectively becomes a termination notice. The employee may then file a legal challenge within the three-week window, but if unsuccessful, the employment relationship ends.

Change notice and severance

A severance claim may arise:

• By law under Section 1a KSchG if the change is operational, no legal challenge is filed, and the employer mentions it in the notice.³
• Via collective agreements or social plans.
• Through voluntary negotiations between employer and employee.

Frequently asked questions (FAQ)

1. § 1 KSchG => Section 1 Protection Against Dismissal Act ↩︎
2. § 1 KSchG ↩︎
3. § 1a KSchG ↩︎