Termination without cause in Germany: Is it legal?

After receiving a termination letter, many employees wonder not just about their career future but also: Why me? Especially with unexpected dismissals, there’s a need to know the reasons. However, employers initially only need to declare termination in writing. Usually, it’s sufficient if they can state and prove termination grounds only in (later) legal proceedings. Employers typically don’t have to provide reasons in the termination letter. However, distinguishing between explaining termination reasons and having valid termination grounds is crucial – the latter is practically always required for valid dismissal. Our article has the details on all types of dismissal without cause.

What exactly is termination without cause?

Termination without cause can simply mean that a dismissal “only” lacks stated termination reasons – in the sense of an explanation. This doesn’t necessarily mean anything. However, many dismissals (additionally) also lack actual, legal termination grounds. This, in turn, usually leads to dismissal invalidity.

Termination without legal grounds

For dismissals falling under the Dismissal Protection Act, employers cannot terminate without grounds. Under this Act, valid termination requires at least one of these grounds:

• Operational dismissal: Operational dismissal is the most common type, occurring with restructuring or closures. However, employers must specifically prove that operational requirements exist leading to permanent job elimination. Additionally, employers must demonstrate correct social selection. If employers cannot prove these requirements, the dismissal is invalid.
• Conduct-based dismissal: Conduct-based dismissal occurs due to culpable behavior (e.g., constant tardiness, work refusal, etc.). Here, employers must primarily prove serious duty violations, prior warnings, and no milder alternatives exist. If they cannot prove these grounds, the dismissal is invalid.
• Personal dismissal: Personal dismissal is possible when employees can no longer perform agreed work duties permanently due to personal, uncontrollable reasons (e.g., illness). Here, employers must primarily prove that employees cannot fully meet contractual obligations due to lack of personal suitability, this leads to significant operational disruptions, and continuing employment is unreasonable for the employer. If they cannot prove these grounds, the dismissal is invalid.

Whether and when exactly employment falls under the Dismissal Protection Act can be found in our article on the Dismissal Protection Act.

If employers cannot prove grounds under the Dismissal Protection Act, they carry high litigation risk. Willingness to negotiate employment termination and conclude settlements with severance payments is therefore often high.

Termination without cause: Act quickly

Whether termination grounds are sufficient for valid dismissal is decided by the labor court. Naturally, this is independent of whether and what reasons are stated in the termination letter (see above). Often, no court decision is needed when parties quickly agree on severance. Nevertheless, to preserve deadlines, employees should file a dismissal protection lawsuit within three weeks of receiving termination. This deadline applies to all dismissals – regular, extraordinary, or modification dismissals.

Termination without written explanation: Usually permissible

People often read online that termination must be justified. Actually, this isn’t true in most cases – employers may terminate without stating reasons. However, exceptions exist, which we explain below. But first, the standard case:

Explanation: Generally not required 

Usually, no explanation is required in the termination letter. On the contrary: in practice, employment attorneys often expressly advise their employer clients not to state reasons in the termination letter initially, to offer less attack surface for dismissal protection lawsuits. Employers can generally submit termination grounds (including new grounds!) later. However, this only applies when no works council exists.

An explanation doesn’t need to be included in the termination, but other requirements exist: Termination must be in writing and personally signed by the terminating party.¹ For companies, an authorized representative must sign. Errors can occur here. However, the law typically doesn’t require explanation in the termination letter (we’ll cover exceptions shortly).

Nevertheless, employers must disclose at some point why they issued termination. At the latest when employees file dismissal protection lawsuits, employers must present and prove in proceedings that valid legal termination grounds exist (assuming Dismissal Protection Act applicability).

Exceptions: Explanation required in termination letter

Exceptions exist where “explanation” – meaning presentation of termination grounds – is required in the termination letter. The most important exceptions are:

• Termination during apprenticeship: Under the Vocational Training Act, written explanation is required if termination occurs after probation. Employers may not submit other grounds later. Important: if apprentices terminate, they must also state reasons. However, it’s sufficient if they only communicate they want to abandon training.² Not stating grounds leads to dismissal invalidity.
• Special protection provisions: For pregnant women, the Maternity Protection Act expressly requires termination grounds be stated in the termination letter. Otherwise, the dismissal is invalid.
• Collective bargaining agreements and employment contracts can also mandate stating termination grounds in the termination letter. Examples include the collective agreement for public service (TVöD) and individual agreements in the metal and electrical industries and other collective agreements.

Special case: extraordinary (“immediate”) dismissal

An extraordinary termination (fristlose Kündigung) also does not need to contain termination grounds in the termination letter. However: upon employee request, employers must provide grounds in writing after extraordinary dismissal. Note: if employers violate their disclosure obligation and don’t provide reasons despite employee request, employees can claim damages (e.g., litigation costs) if they wouldn’t have filed a dismissal protection lawsuit had grounds been stated.³

Frequently asked questions (FAQ)

1. Section 623 BGB ↩︎
2. Section 22(3) BBiG ↩︎
3. Section 626(2) sentence 3 BGB ↩︎