Termination of fixed-term contract: rules, notice periods, tips

Fixed-term employment contracts are common in Germany, and many employees work on a temporary basis for years. Problems often start when employers want to end the contract early or when the time limit itself is not valid. Our article explains when the termination of a fixed-term contract is legal under the Part-Time and Fixed-Term Employment Act (TzBfG). We also look at how employees can defend themselves against unlawful time limits and unfair dismissals.

Ending a fixed-term contract

Fixed-term employment relationships are generally permitted in Germany – and not at all unusual any more. A significant share of employees over 25 works under a fixed-term contract. The share is even bigger in the public sector, in education, and project-driven roles. The main legal rules governing these contracts are found in the Part-Time and Fixed-Term Employment Act (TzBfG). This law distinguishes between two basic types of fixed-term:

• Fixed-term by time: the contract ends automatically on a specific calendar date.
• Fixed term by purpose: The contract ends when its purpose has been achieved. For example, project completion or return of another employee from parental leave. The earliest is two weeks after the employer has notified the employee in writing that the purpose has been achieved.¹

Strict legal requirements for a fixed-term contract

A fixed term is only valid if certain requirements are met. In principle, there must be an objective reason – such as a temporary additional workload or the need to cover a maternity or parental leave. Also, a fixed-term employment contract for a new hire can be agreed upon without an objective reason if the total duration does not exceed two years and only a limited number of renewals are used.²
Furthermore, a fixed-term contract must be made in writing before work starts. If the written form is missing, the fixed term is usually invalid. The content of the fixed-term agreement can be agreed electronically. However, a mere verbal side agreement is not enough for a valid fixed-term.

What happens if the legal requirements are not met?

If the fixed term is legally invalid, the contract does not just end automatically. Instead, the employment is treated as open-ended from the beginning:

• In this situation, the employer can usually terminate the contract only in line with the normal rules for permanent employees and in respect of the protection against dismissal.
• If the fixed term is invalid solely because the written form is missing, courts allow ordinary termination even before the originally agreed-upon end date. In practice, this gives the employer and the employee an earlier exit option, but at the same time, the employee can rely on all normal protection rules for the termination of a permanent employment contract.

Early termination of fixed-term contract

As fixed-term employment contracts are set up to end automatically, the parties normally do not need an ordinary notice to bring them to an end. Still, situations arise where one party tries to end a temporary contract early. The law distinguishes between extraordinary termination for cause and ordinary termination based on a clear contractual or collective agreement clause.

Extraordinary termination for cause

An extraordinary or summary termination of a fixed-term contract is possible in principle. It follows the general rules for termination for cause and requires a good reason that makes it unreasonable for the terminating party to continue the employment, even until the end of the ordinary notice period. Typical examples are serious breaches of duty. Examples include criminal offences against the employer, colleagues, or customers, or other massive breaches of trust. 

An extraordinary termination for operational reasons is usually not possible in a fixed-term contract. The employer consciously took on the risk of employing the person for the full term. Only in rare and extreme cases, this might be possible. We have not found any court decisions confirming such exemptions in the case law. On the other hand, an extraordinary termination for personal misconduct is clearly possible. This includes serious breaches of contract after a valid warning. For example, repeated unexcused absences, violent attacks, or grave insults, depending on the overall circumstances.

Case example: termination of a fixed-term contract after unauthorized leave

A fixed-term employee can file a claim with the labor court against an extraordinary termination. The claim must be filed within three weeks after receiving the termination letter. If the claim succeeds, the employment continues until the agreed end of the fixed term. If it fails, the employment ends when the summary termination is received.

Ordinary termination in a fixed-term contract

An ordinary termination during a fixed-term employment relationship is only possible in narrow circumstances. As a rule, it requires a clear term in the employment contract, allowing an ordinary termination before the fixed term expires. This clause must be unambiguous and should specify who may give notice and under which conditions.

If a fixed-term employment contract is concluded for more than five years, the TzBfG grants the employee an additional termination right. In other words, there is a right to end the contract after five years of service. The employee may terminate the contract with a notice period of six months.

In the event of the employer’s insolvency, a fixed-term employment contract can be terminated ordinarily by the insolvency administrator. The statutory notice period is three months. However, if shorter contractual or collective notice periods apply, the administrator may use those.
If a right of ordinary termination exists, any notice is subject to all rules on protection against unfair dismissal. This means that employees can bring a claim for protection against dismissal. That is, if they consider the ordinary termination of a fixed-term contract to be unjustified. And also want to keep the job or negotiate a better exit solution.

Notice periods for fixed-term contracts

If a right of notice has been agreed in a fixed-term contract, the agreed notice period usually applies. Many contracts refer to statutory notice periods or collective agreements. In that case, those rules govern the exact length of notice.

If no contractual or collective rules at all are in place (a rare exception), statutory notice periods apply by default. Depending on the total agreed length of the fixed term, the following guidelines are used in practice:

• For a fixed term of up to two years, a statutory notice period of one month may apply.³
• For fixed terms of more than two and up to five years, a notice period of two months may apply.
• If the fixed-term employment relationship is agreed for >five years, the employee can terminate it with six months’ notice. This special right intends to protect employees from being tied to a long fixed term without an exit option.

Special: Probation periods in fixed-term contracts

If the contract includes a “probation” with the possibility of termination, it can be ended with a statutory notice period. This is usually two weeks, unless the contract provides a different, longer period. Since 1 August 2022, a new regulation⁴ required that any probationary period in a fixed-term contract must be proportionate to the contract’s duration and the type of work, but the law gives no concrete number. Courts and scholars therefore worked with a rule of thumb: no more than 25% of the fixed term (e.g., three months in a 12-month contract) – a limit the Federal Labor Court expressly rejected on 30 October 2025.⁵

Claim to remove the time limit

If an employee wants to argue that a fixed-term employment contract is invalid, he must file a lawsuits (Entfristungsklage). Such a lawsuit must be filed within three weeks after the agreed end date of the fixed-term contract.⁷

Deadlines apply

The three-week period starts when the calendar-based term expires, or when the purpose of a fixed term is fulfilled. Or when the employee receives the employer’s written notice stating that the contract will end after the purpose is fulfilled.

Professional help recommended

In theory, you can file a claim for permanent employment on your own. In practice, however, questions around deadlines, evidence, and social selection can be very technical. Therefore, it is usually safer to involve a specialized employment lawyer early on.

If you suspect that your fixed term is unlawful, put the end date and notice period in your calendar. And get legal advice well before that date. Clarify whether there was a real objective reason, check how often the contract has already been renewed. Also, discuss with a lawyer the chances and risks of a lawsuit (either Entfristungsklage or a dismissal protection claim).

Frequently asked questions (FAQ)

1. Section 15 Part-Time and Fixed-Term Employment Act ↩︎
2. Section 14 Part-Time and Fixed-Term Employment Act ↩︎
3. Always only to the end of a calendar month ↩︎
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7. Section 17 Part-Time and Fixed-Term Employment Act ↩︎