Protection against dismissal: What conditions apply in Germany?

The law protects the continuity of employment relationships. The legislator takes into account the fact that the employer is usually in a stronger economic position. In this article, you will learn more about general protection against dismissal within and outside the scope of the Unfair Dismissal Protection Act (Kündigungsschutzgesetz) and about special protection against dismissal for particularly vulnerable groups, such as pregnant women or severely disabled persons, etc.

The most important information at a glance:

• General protection against dismissal under the Unfair Dismissal Protection Act applies if employees have been employed for more than six months in a company with more than 10 employees.
• In addition, there is special protection against dismissal for vulnerable groups of employees, such as pregnant women, works council members or severely disabled persons.
• If you are dismissed, you have three weeks to file an action for unfair dismissal with the labour court. After this period has expired, the dismissal is considered valid from the outset, with a few exceptions.

Requirements for protection against dismissal under German law

Protection against dismissal is a key concern for many employees. However, the Unfair Dismissal Protection Act (Kündigungsschutzgesetz, KSchG) only applies if the employee (1) has been employed by the same company or business for six months (waiting period) and (2) the company usually employs more than 10 employees (not a small business):

First requirement: fulfilment of the waiting period

Protection against dismissal pursuant to Section 1 (1) of the Unfair Dismissal Protection Act (KSchG) only begins after an uninterrupted period of employment of more than six months in the same company or business. This so-called waiting period begins on the first day of work. It is irrelevant whether you actually worked during this period. The waiting period must have been completed at the time the notice of termination is received. It is also irrelevant whether you work full-time or part-time – the six-month waiting period applies equally in both cases.

Second requirement: The company employs more than 10 employees

Another important aspect of protection against dismissal is the number of employees in the company. The Unfair Dismissal Protection Act only applies to companies that have a certain minimum size. Until the end of 2003, protection against dismissal applied to companies with more than five employees. Since the beginning of 2004, however, protection against dismissal only applies to companies with more than ten employees.

Third requirement: Protection against dismissal if the KSchG applies

If the KSchG applies in a company, the employer can only dismiss an employee for operational, personal or behavioural reasons.

The dismissal must be ‘socially justified’. The specific requirements for when this is the case are not expressly regulated in the KSchG, but have been developed by case law:

• In the case of personnel-related dismissal(illness, lack of driving licence, etc.): Here, the employer must prove the following in order to protect the employee: (1) The employee can no longer fulfil their contractual obligations due to their lack of personal suitability/skills (negative future prognosis). (2) This must lead to significant impairments to operational processes or economic interests. (3) It is unreasonable for the employer to continue the employment relationship. They must first take less severe measures (balancing of interests).
• In the case of behaviour-related dismissal (tardiness, theft, etc.), the employer must prove the following to protect the employee: (1) The employee has breached their contractual obligations. (2) Warnings must have been issued. There are no less severe measures available. (3) Balancing the interests of the employer and the employee.
• In the case of termination for operational reasons (restructuring, decline in orders, etc.), the employer must prove the following to protect the employee: (1) Urgent operational requirements that lead to the loss of the job. (2) No other employment opportunities within the company (no less severe measures). (3) Social selection: if there are several comparable employees in the company, the employer must decide who will be dismissed based on length of service, age, maintenance obligations and severe disability.

Entitlement to severance pay in the event of dismissal under the KSchG

Many employees mistakenly assume that they are entitled to severance pay in the event of dismissal.

There is no automatic entitlement to severance pay. Only Section 1a of the KSchG regulates a statutory entitlement to severance pay if (1) the employer gives notice of termination for operational reasons and (2) the employer indicates in the notice of termination that the employee can claim severance pay if the period for bringing an action expires and (3) the employee does not actually bring an action for unfair dismissal. If these conditions are met, the employee is legally entitled to 0.5 gross monthly salaries per year of employment.

In addition, a contractual entitlement to severance pay may arise from a collective agreement or social plan (agreement between the employer and the works council).

In all other cases, the employer and employee can negotiate a severance payment on a voluntary basis. The amount depends on the prospects of success of the dismissal, length of service, age, etc. For more information, see our article ‘Severance pay upon dismissal’. If you would like to get a quick overview of the amount of a possible severance payment, use our handy severance payment calculator.

Special protection against dismissal for certain groups of employees

In addition to the general protection against dismissal under the KSchG, there are a variety of special regulations on special protection against dismissal. These are aimed at particularly vulnerable groups and include, among others:

• Pregnant employees (Section 17 (1) MuSchG)
• Parents during parental leave (Section 18 (1) BEEG)
• Employees on care leave (Section 5 (1) PflegeZG)
• Severely disabled employees (Section 168 SGB IX)
• Members of the works council (Section 15 (1) KSchG)
• Trainees (Section 22 BBiG)
• Data protection officers (Section 6 (4) BDSG)

These groups of people have extended protection against dismissal, which means that dismissal is either not possible at all or only possible under difficult conditions. The legislator has clearly defined the criteria and circumstances that must be taken into account when dismissing these specially protected groups in order to ensure special protection against dismissal.

Prohibition of dismissal during pregnancy and thereafter

There is a prohibition on dismissal during pregnancy and after childbirth. This applies from the first day of pregnancy until a certain period after childbirth. Only in special cases may an employer dismiss an expectant mother with official approval.

Prohibition of dismissal during parental leave

The employer may not terminate the employment relationship from the date on which parental leave is requested. Only in special cases may termination be declared permissible by way of exception.

Severely disabled persons: Termination only with official approval

Severely disabled persons may, in principle, be dismissed. However, the dismissal is only effective if the approval of the integration office has been obtained in advance.

Works council members: Only extraordinary dismissal with the consent of the works council

Works council members also enjoy special protection against dismissal. Dismissal is not permitted unless there are facts that entitle the employer to dismiss the employee for good cause without observing a notice period and the works council has given its consent.

Circumventing protection against dismissal

In order to circumvent the strict regulations of dismissal protection, many employers use termination agreements to terminate existing contracts by mutual consent. Another tactical measure to circumvent dismissal protection can be the increased use of fixed-term employment contracts.

Termination agreement

Some employers try to circumvent protection against dismissal by offering a termination agreement in exchange for severance pay. Before signing such an agreement, employees should ask for time to consider it. Termination agreements can have positive and negative legal consequences. Among other things, a waiting period for receiving unemployment benefits may be imposed. A termination agreement should only be signed after seeking legal advice.

Fixed-term employment contract

Nowadays, many employees are hired on fixed-term contracts. This practice allows employers to hire employees for specific projects, temporary replacements or seasonal work, with the employment relationship ending automatically at the end of the agreed period. This type of fixed-term contract is permissible for objective reasons. As termination is not required in this case, neither the protection against dismissal under the KSchG nor the special protection against dismissal applies.

Employers can also hire employees on a fixed-term basis without specific reasons, provided that the employee in question has not previously worked for the company.

A fixed-term employment contract can be extended, but the total duration may not exceed two years. For example, a contract limited to six months can be extended seamlessly for another six months.

Legal action to secure protection against dismissal

Upon receipt of a notice of termination, the employee has the option of bringing an action for unfair dismissal before the labour court within three weeks of receiving the notice. Terminations become effective upon expiry of this period. The employee should seek legal advice before bringing an action.

Frequently asked questions (FAQ)