Ordinary termination of the employment contract – what to know?

Ordinary termination (ordentliche Kündigung) is the unilateral termination of an employment relationship in compliance with statutory or contractual notice periods. Unlike summary (extraordinary) termination, the employment does not end immediately upon notice but only after the notice period has expired. Ordinary termination is the normal form of dismissal under German employment law. It can be initiated by either the employee or the employer. This article explains, among other things, when an ordinary termination by the employer is valid or invalid in both permanent and fixed-term contracts, what formal requirements must be observed, and how ordinary termination by the employee is regulated.

Key facts at a glance

• Ordinary termination is a (unilateral) declaration that terminates the employment relationship in compliance with the agreed notice period.
• Employers are subject to restrictions when giving ordinary notice of termination. They must:
  • Observe ‘special protection against dismissal’ (e.g. maternity protection, parental leave)
  • Prove that the termination is socially justified
  • Meet the general requirements for termination: written form, compliance with notice periods, consultation with the works council, etc.
• Employees can terminate their employment relationship ‘with notice’ without restrictions and without giving reasons.

What is ordinary termination?

Ordinary termination is a unilateral declaration by either the employer or the employee to terminate the existing employment relationship in compliance with the contractually or legally stipulated notice period. Ordinary termination ends the permanent employment relationship at the end of the notice period. In contrast, termination without notice or extraordinary termination terminates the employment relationship with immediate effect.

In fixed-term employment relationships, ordinary termination is only possible if this has been agreed in the employment contract or collective agreement. Otherwise, the fixed-term employment relationship ends automatically upon expiry of the term or fulfilment of the purpose (substitution, completion of a specific project).

Ordinary termination by the employer

If the employee receives ordinary termination by the employer, a number of questions regarding the validity of the ordinary termination must be examined:

• Is there ‘special protection against dismissal’ (maternity protection, parental leave, etc.)?
• Is the Protection Against Dismissal Act (KSchG) applicable?
• If so, does the ordinary termination meet the requirements of the KSchG?
• If not, what requirements must the employer meet for terminations outside the scope of the KSchG?
• What formal requirements must the employer meet when giving ordinary notice of termination?

We will answer all these questions in the following chapters.

Application of special protection against dismissal

If ‘special protection against dismissal’ applies, the employer cannot, as a rule, give notice of ordinary dismissal. Here are the most important cases in which ‘special protection against dismissal’ applies to employees:

1. Maternity protection: Pregnant employees and women up to four months after giving birth cannot be dismissed. An exception only applies if the competent authority has given its prior consent to the dismissal in special cases, e.g. in the event of a company closure.
2. Parental leave: From the time parental leave is requested – at the earliest eight weeks before it begins – and during parental leave, dismissal is not permitted (Section 18 BEEG). Here too, the competent authority may give its prior consent to dismissal in exceptional cases.
3. Care leave: Dismissal is not permitted during the notification and implementation of care leave or short-term absence from work. In exceptional cases, the competent authority must give its prior consent (Section 5 PflegeZG).
4. Works council members and similar functions: Members of the works council, the youth and trainee representatives, the election committee and election candidates enjoy special protection against dismissal during their term of office and for one year thereafter. Termination is only possible for good cause and with the consent of the works council (Section 15 KSchG).
5. Severely disabled persons: The dismissal of a severely disabled person requires the prior consent of the Inclusion Office/Integration Office.
6. Vocational training relationships: After the probationary period, ordinary dismissal by the employer is excluded. Termination is only permissible without notice and for good cause (Section 22 (2) BBiG).
7. Data protection officers, emission control officers and waste officers enjoy special protection against ordinary termination during their term of office and for one year thereafter. Termination is only possible for good cause (Section 6 BDSG, Section 58 (2) BImSchG, Section 60 (3) KrWG).

General protection against dismissal under the KSchG

Whether a reason for ordinary dismissal is required depends on the legal framework, in particular on the applicability of the Dismissal Protection Act (KSchG). This Act is intended to protect employees from unfair dismissal and specifies the conditions under which ordinary dismissal can be effective.

Application of the Dismissal Protection Act

The Unfair Dismissal Protection Act (KSchG) applies to ordinary termination by the employer if the following conditions are met:

1. 6 months of service: The employee must have been employed by the same company or organisation for at least six months without interruption (Section 1 (1) KSchG). The six months of service must have been completed by the time the notice of termination is received.
2. No small business (more than 10 employees): The company must regularly employ more than ten employees (excluding trainees) (Section 23 (1) KSchG). Part-time employees count proportionally:
   • Up to 20 hours/week as 0.5 employee,
   • up to 30 hours/week as 0.75 employee,
   • over 30 hours/week as 1.0 employee.

If both conditions are met, ordinary dismissal is subject to the protection of the KSchG.

Requirements under the Unfair Dismissal Protection Act

Ordinary dismissal under the KSchG is only permissible if it is socially justified. There are three types of dismissal: personnel-related, behaviour-related or operational dismissal:

1.) Dismissal for personal reasons

In the case of dismissal for personal reasons, the employee is wholly or partially unable to fulfil their contractual obligations due to their personal aptitude/ability. Examples: Dismissal due to illness, lack of work permit, lack of driving licence for truck drivers. The employer must prove: (1) The employee will no longer be able to fully fulfil their contractual obligations in the future due to a lack of personal aptitude/skills (negative prognosis for the future). (2) The lack of personal aptitude leads to significant impairment of operational/economic interests. (3) It is unreasonable for the employer to continue the employment relationship. Before doing so, the employer must take less severe measures, such as continuing employment in another position, etc. (balancing of interests).

2.) Conduct-related dismissal

Conduct-related dismissal is based on conduct by the employee that is contrary to the contract and can be controlled (e.g. unexcused absence, alcohol consumption at work, tardiness, etc.). The employer must prove: (1) The employee has breached contractual obligations. (2) Have there been any (relevant) warnings? Are there less severe measures that could be taken to remedy the breach of contract in future? (3) Balancing of interests: Is the dismissal reasonable? Is it unreasonable to continue the employment relationship after weighing up all interests?

3.) Termination for operational reasons

Termination for operational reasons is based on urgent operational requirements that lead to the loss of the job in question. Examples: lack of orders, restructuring or plant closures. The employer must prove: (1) Urgent operational requirements that lead to the permanent loss of the job opportunity for the employee concerned. (2) There must be no other employment opportunities within the company or vacant positions in the company (no less severe measures). (3) Social selection: If there are several comparable employees in the company, the employer must carry out a social selection process. Criteria: length of service, age, maintenance obligations, severe disability.

Termination without the Unfair Dismissal Protection Act

If the Unfair Dismissal Protection Act does not apply, for example in small businesses with no more than ten employees or in the case of employees who have been with the company for less than six months, no social justification is required under the KSchG. However, there are a number of protective provisions that must be taken into account in the event of ordinary termination by the employer:

• Even outside the scope of the KSchG, the employer must comply with the general rules on termination in writing and notice periods.
• The employer may only give extraordinary (immediate) notice for good cause.
• All provisions on special protection against dismissal (maternity protection, parental leave, severe disability, etc.) apply. Protection against dismissal in the event of a transfer of the business
• The General Equal Treatment Act, which protects against discrimination, applies.
• If there is a works council, it must be consulted in accordance with the rules before dismissal. Otherwise, the dismissal is invalid.

In case of doubt, you should consult a lawyer specialising in employment law to check whether the company is actually a small business or whether the waiting period has not yet been fulfilled.

Formal requirements for proper termination

Strict formal rules must be observed for proper termination to be effective. These include, in particular, the written form, verifiable receipt of the termination letter and compliance with the applicable notice periods. Anyone who disregards these requirements risks the termination being invalid. We explain the three most important points in detail below.

Compliance with the written form

In the case of ordinary termination, both the employer and the employee must always comply with the written form requirement for termination. Termination is only effective with a letter of termination. This means that the employer must sign the termination by hand. Therefore, termination that is communicated verbally, sent by email or text message is not effective. A signature stamp or ‘Docusign signature’ is also not sufficient.

Receipt of the termination

A termination is deemed to have been received when it reaches the recipient in such a way that they can read it under normal circumstances. This is the case, for example, if the termination letter was placed in the letterbox and the recipient usually finds it there. However, in the event of a dispute, the employer must prove that the termination was actually received. This is practically impossible with a simple letter. Find out more in our article on receipt of termination.

Compliance with notice periods

In the case of ordinary termination, the applicable notice periods must be observed:

• The notice period may be specified in the employment contract or collective agreement.
• If there are different notice periods in the employment contract and collective agreement (or even in the law), the principle of favourability applies, i.e. the more favourable notice period applies to the employee. The longer notice period is usually more favourable for the employee, as they have a greater interest in the later termination of the employment relationship. If it cannot be decided in individual cases which is more favourable, the collective agreement applies.
• In the absence of a specific agreement, the statutory notice periods pursuant to Section 622 of the German Civil Code (BGB) apply. The basic notice period is four weeks to the 15th or the end of a calendar month. For the employer, the notice periods are extended in accordance with the employee’s length of service:

Duration of employment	Period of notice
From 2 years	1 month
From 5 years	2 months
From 8 years	3 months
From 10 years	4 months
From 12 years	5 months
From 15 years	6 months
From 20 years	7 months

Consultation with the works council

The works council must be consulted in accordance with § 102 of the Works Constitution Act (BetrVG) in the event of any dismissal. It must be informed of all essential points so that it can assess the validity of the dismissal. If the consultation is not carried out or is not carried out properly, the dismissal is invalid.

Received a valid termination – what should you do?

If an employee receives a valid termination from their employer, they should take the following important steps:

• The employee should review the termination letter or have it reviewed by an employment lawyer. It is important to ensure that the letter was received properly, is in writing, has been signed by the correct representative and does not violate any special protection against dismissal. Errors can render the termination invalid. A specialist employment lawyer will clarify whether legal expenses insurance covers the costs.
• Do not sign anything upon receipt of the termination notice or immediately thereafter!
• The employee should contact the works council. The works council can inform the employee whether a hearing has taken place, what further information it has and whether there is any objection to the termination.
• The employee must register with the employment agency as job-seeking and unemployed in good time. This avoids waiting periods, i.e. delayed and reduced unemployment benefit payments.
• The employee must clarify within three weeks of receiving the termination whether they will file an action for unfair dismissal. This can only be done within a period of three weeks of receipt. If successful, an action may lead to the continuation of the employment relationship or to negotiations on termination with severance pay.
• If necessary, request a reference letter.

Ordinary termination by the employee

Employees have the right to terminate the employment relationship without giving reasons. Proper ordinary termination by the employee requires compliance with certain formalities:

• Notice period: The employee must observe their notice period.
• Written form requirement: The termination must be in writing. The employee must sign it by hand on paper. To ensure proof of receipt, the termination should ideally be sent by registered mail or handed over directly to the relevant department with confirmation of receipt.

Before you quit your job – 3 tips:

• Avoid the waiting period: If you resign of your own accord, you should, if possible, have a binding job offer in hand to avoid the 12-week waiting period for unemployment benefits.
• Comply with the provisions of your employment contract: The rights and obligations set out in your employment contract must be observed. Special clauses, such as the repayment clause for further training costs, can make it difficult to resign voluntarily.
• Termination without notice: Employees are only permitted to terminate their employment without notice if there is a very important reason (long-term non-payment of salary, violations of occupational health and safety regulations, permanent exceeding of working hours, insults or bullying).

Frequently ask questions (FAQ)