Action for unfair dismissal: When is it worth taking legal action?

Actions against unfair dismissal are advisable if there are doubts about the dismissal. E.g., in the case of an “unfair” termination. Another example is the failure to comply with deadlines and information requirements. It is also advisable in cases of suspected discrimination or violation of protective regulations. It can also help to negotiate severance pay in the event of an unavoidable dismissal. Before filing a complaint, you should have your chances of success checked by a lawyer.

Dismissal protection under § 4 KSchG

Employees who have received a notice of dismissal and wish to take action against it can file a complaint under Section 4 of the German Unfair Dismissals Act (Kündigungsschutzgesetz, KSchG). It reviews the legality of the dismissal. An employee must file this action within three weeks of receipt of the written notice. Even without a lawyer, the requirements of the labour courts are quite user-friendly. You do not even have to formally label the action as “action for protection against dismissal”. You must simply make clear that it is the dismissal you are contesting.

If your employer has a works council, it is advisable to contact the works council within one week of receiving the notice of termination in order to appeal (Section 3 of the German Unfair Dismissals Act, KSchG), even if this is not mandatory for the appeal.

Caution: Late filing of a complaint is a clear exemption and you can only do this under very strict conditions. However, if you fail to do so without good reason, the termination will become effective!

Typical reasons for an invalid termination

A notice of termination can be ineffective for many reasons. Failure to comply with the notice period under Section 622 of the German Civil Code (BGB) in the case of ordinary termination is a common issue.

• In the case of an extraordinary notice of termination (e.g. in the event of serious breaches of contract such as theft), there is sometimes a lack of solid evidence. This type of termination requires a good reason (§ 626 BGB. It has to be in writing – oral or email terminations are invalid.
• In many cases, a notice of termination requires prior warnings, which can render the notice null and void. Exceptions apply for serious offenses, for which the courts do not require a prior warning.
• Errors in social selection in the context of dismissals for operational reasons, can also render the dismissal void.
• In the case of personal dismissals due to illness, the absence from work can be insufficient as a reason for dismissal.
• Employees such as works council members, pregnant women or people with disabilities enjoy additional statutory protection against dismissal.

Action for unfair dismissal: Time limits for legal action

In order to challenge a valid notice of dismissal, it is essential that the employee submits the notice of dismissal in time. For this purpose, the Arbeitsgericht (Labour Court) is to be convened within a three-week period. This period starts on the date of receipt of the notice of termination. Sometimes, this period expires without the employee’s fault. Then it is possible to apply for subsequent admission of the action for unfair dismissal.

The application for subsequent admission must be made two weeks after the cause of the delay has been removed. The employee must convincingly justify the reason for the delay, although the bar is set high. An acceptable reason is, for example, a serious illness that has significantly impaired the employee’s ability to work.

The Federal Labour Court (Bundesarbeitsgericht – BAG) has made it clear that the employee can be held responsible for the lawyer’s omissions and that in such a case a subsequent admission of the action is out of the question (BAG – Case No. 2 AZR 472/08).

Procedure after filing a lawsuits against unfair dismissal

In general

When the action for unfair dismissal is filed, the court sets a date for a preliminary hearing, ideally within two weeks. Realistically, however, this preliminary hearing can take up to two months. The conciliation meeting aims to reach a settlement between employer and dismissed employee. Focus of the talks is often the compensation (severance pay). The conciliation hearing is conducted by the presiding judge alone, without the presence of the assistant judges. The judge gives a preliminary and non-binding case assessment and outlines possible risks and opportunities for the parties involved.

If no agreement is reached at the conciliation hearing, a further hearing will be scheduled before the full panel, now including the lay judges (panel hearing). If the parties fail to reach an agreement at this hearing, the Tribunal shall deliver its judgment. The hearing can take up to six months.

Concrete steps

There are several steps in the process of filing an unfair dismissal claim:

1. Receiving the notice: As soon as you have received a notice of termination from your employer, you should act quickly.
2. Deadline: Within three weeks of receiving the notice, you must file the dismissal claim with the relevant labour court.
3. Filing the claim: The complaint must be filed in writing or orally with the registry of the labour court. It is better to hire a lawyer to file the claim on your behalf and guide you through the process.
4. Arbitration hearing: As a first step, the Labour Court will hold a conciliation hearing to try to reach an amicable settlement between the parties.
5. Hearing: If no agreement is reached at the hearing, a hearing is held at which the court clarifies the points in dispute and makes a decision.
6. Judgment or settlement: The proceedings end either with a judgement or a settlement, which can either annul the dismissal or provide for compensation.
7. Appeal: If you are dissatisfied with the judgement, you can lodge an appeal. However, further deadlines and conditions apply.

Costs of a dismissal claim

The costs associated with an action for dismissal are made up of court and lawyer’s fees, the amount of which depends on the employee’s monthly salary. If a settlement is reached during the conciliation hearing, the court costs are usually waived. In labour law, however, there is no obligation for the losing party to pay the lawyer’s fees, so the rule that the losing party must pay the costs is only applicable to a limited extent. For people on low incomes or without legal expenses insurance, legal aid can provide financial support and should be considered when filing a dismissal claim.

Summary:

1. Court costs: These depend on the value of the case and are set by the labour court. There are usually no court costs in the first instance.
2. Lawyer’s fees: The amount of the lawyer’s fees is regulated by the German Lawyers’ Remuneration Act (Rechtsanwaltsvergütungsgesetz, RVG) and also depends on the value of the case.
3. Other costs: For example, for expert opinions or witnesses, if necessary.

Cost coverage: In some cases, legal expenses insurance will cover the costs of a dismissal claim. Ask your insurance company about the exact terms and conditions.

Summary Action for unfair dismissal

• A dismissal claim must be lodged with the relevant labour court within three weeks of receiving the notice of dismissal. If this deadline is missed, the dismissal will become final.
• As a rule, there is no general entitlement to compensation under the law; compensation tends to be the result of negotiations. Nevertheless, it is common for severance payments to be made. The amount depends on the length of service, the likelihood of success and the previous income.
• The costs of a dismissal claim include both the court and the lawyer’s fees. In the event of a settlement, the court costs are waived.
• The amount of these costs depends on the value of the claim, which is usually three times the monthly gross salary and can rise if there are additional points of comparison (such as a reference or Christmas bonus).
• If you cannot afford the costs of a dismissal protection case, you often have a good chance of having the costs covered or supported by legal aid.

Overall, one should carefully weigh up the own chances and risks before one decides for a dismissal protection lawsuit. A consultation by a Fachanwalt für Arbeitsrecht can be helpful, in order to make the best decision.

What are the alternatives to dismissal?

An unfair dismissal claim is not always the only way to fight a dismissal. Here are some alternatives:

• Out-of-court settlement: Try to negotiate directly with the employer and find an amicable solution. This could be in the form of a severance payment, leave of absence or even continued employment.
• Mediation: A neutral conciliator can help to reach an agreement between the employer and the employee, without it coming to court.
• Severance agreement: Both parties agree to end the employment relationship amicably. This can include compensation or other agreements.
• Change of notice: If the reason for termination is null and void, the employee can request a change in the terms and conditions of employment.
• Involving the works council: In the case of dismissals for operational reasons, the works council can help to find alternative solutions, such as a transfer within the company.