Termination of employment contract: 7 steps you should follow!

Losing your job is never easy. A termination can come entirely “out of the blue” and seriously throw you off track. Especially if you are not familiar with the legal system, do not have a good legal advisor ad hand, and the documents you have received are in a technical and unfamiliar language. The end of your employment might also affect your status in Germany (e.g. blue card). So you might wonder how best to deal with this challenge. However, a termination is not the end of the world. In this blog article, we will describe the most important steps you should take after receiving a termination letter.

In General

At first, being made redundant can be quite frightening and you are probably wondering how best to deal with the situation. Firstly, being made redundant does not mean the end of the world. So keep calm and don’t panic. An outburst of anger or even a threat to your boss will not help you now. Similarly, you cannot simply refuse to face reality and ignore a notice of termination that is handed to you personally, following the motto “out of sight, out of mind”. This would not change the fact that the termination of the employment contract has been received from a legal point of view.

Obvious tip: Accept the dismissal without comments or feedback. Behave respectfully and responsibly towards your superiors and colleagues. Contact a specialist lawyer for labour law as soon as possible! AbfindungsHero will help you find a competent labour law specialist to support you locally.

Note the exact date of “receipt” of the notice of termination

For a termination of the employment contract to be effective, it must be received by you. Receipt occurs when the termination is handed to you personally or sent to you by post. Unfortunately, it is useless if you refuse to accept the notice of termination when it is handed to you. Because from a legal point of view, you will still have received the termination. Even if you refuse to open the letterbox, this does not count.

This is because courts assume that letterboxes are emptied once a day. Even a holiday does not protect you from this. You should therefore ask friends or neighbours to check the post regularly if you are not at home for a longer period of time. Even if you receive the notice of termination by registered mail and you receive a notification for a registered letter, you should not wait longer than three days to collect the registered letter, as longer periods are not accepted by the courts.

Why is receipt of the termination important? For example, for the notice period and, above all, for the time limit for bringing an action for unfair dismissal.

Check if the written form has been observed correctly

Notice of termination is only effective with a letter of termination. This means that your employer must sign the notice of termination by hand. Notice of termination can only be given in writing, i.e. on paper. Therefore, a notice of termination that is given verbally, sent by email or text message is not effective. A signature stamp is also not sufficient.

A little tip: Pay attention to who signs the termination. Even minor formal errors can mean that the termination of the employment contract is not formally effective.

Check for the correct signatory

Only two groups of people are authorised to sign your notice of termination:

• Firstly, these are the people in the company who all know that they are authorised to dismiss employees. These are the company owner, the managing director, the authorised signatory or, as a rule, the HR manager.
• On the other hand, these are persons who add an authorisation from the employer to terminate the contract, in the original.

“Handwritten” signature required

The authorisation must also be signed “by hand” by the company owner or managing director. If the signed authorisation is missing, the termination can be rejected. In this case, respond as quickly as possible with a rejection, as the termination will then not be effective. You will probably not be able to prevent the termination of the employment contract. However, you are now aware of the situation and can prepare yourself.

Our tip:

Reject the termination of the employment contract as follows:

“Dear Sir or Madam,

On XX.XX.20XX I received a termination notice from your company dated XX.XX.20XX, which was issued or signed by Mr / Mrs XY as your alleged authorised representative.

As I have not been presented with a power of attorney that would legitimise Mr / Mrs XY, I hereby reject the termination for this reason [insert if applicable? in accordance with § 174 sentence 1 of the German Civil Code].

Yours sincerely,

(Employee)”

Received a termination? Don’t sign anything!

The moment of termination is often overwhelming and accompanied by fear. But no matter how upset you are and no matter what your employer asks you to do: don’t sign anything!

Sometimes employers want to pressure the employee who has just been dismissed to sign a termination agreement. This terminates the employment relationship immediately and the employee loses their claims against the employer. The employer can then no longer claim protection against dismissal and the employee – i.e. you – may also receive less unemployment benefit. Even if the employer puts pressure on you: you do not have to sign anything.

Inform the authorities, where applicable

You have three working days from receipt of the notice of termination to register as a “jobseeker“. You must adhere to this deadline and register as a jobseeker within three days. If you miss the three-day deadline and need to apply for unemployment benefits later, this can have financial consequences for you. You may have to wait up to 12 weeks for your unemployment benefit. In addition, you must also register as unemployed on the first day of your unemployment at the latest and, once you have registered as unemployed, apply for your unemployment benefit.

Our tip: Don’t let the three-day deadline pass. If you don’t want to do this over the phone or in person, you can now easily register online as a jobseeker (https://www.arbeitsagentur.de/arbeitslos-arbeit-finden/arbeitslosengeld). Useful information on your rights and obligations as an unemployed person can be found here (https://www.arbeitsagentur.de/datei/merkblatt-fuer-arbeitslose_ba015368.pdf).

If you have a residence permit (e.g., blue card), you might have to inform the immigration authorities (Ausländerbehörde) that you will be unemployed asap.

Termination of employment contract? File an action for unfair dismissal in time

Regardless of how you feel about the dismissal, whether you are happy about it because you didn’t like your employer or whether you are hurt and never want to contact them again: If you receive a dismissal notice, you can defend yourself against it with an action for unfair dismissal. In many cases, this can make sense.

Don’t forget: The three-week period for filing an action for protection against dismissal begins when you receive the dismissal notice. This period applies even if the dismissal is invalid! Once the deadline has expired, you can (with a few exceptions) no longer file an action for protection against dismissal in order to avoid receiving the highest possible severance pay.

Our tip: Make a note of the date of receipt and the 3 week deadline in your diary and contact a lawyer immediately.

Legal action for continued employment

By filing an action against unfair dismissal, you are suing for continued employment. The employer has already made it clear that he wants to get rid of you quickly and is no longer interested in you. However, if the employer were to lose the action against unfair dismissal, he would still have to employ you and continue to pay you. To prevent this, he is probably prepared to pay you a certain amount of money for the loss of your job. You will then reach a settlement with the employer before the labour court, in which the employer’s payment and the termination of the employment relationship are stipulated.

The amount of this settlement depends, for example, on your employer’s litigation risk. However, you can also use your negotiating skills to influence the amount of your severance payment and thus gain further advantages. For example, the termination date can be postponed or a good reference can be agreed. You can therefore limit the economic consequences of your job loss with an action for unfair dismissal.

Request an employer’s reference

You have the right to an employer’s reference, so make use of this right! The employer must issue you with a reference after you have been dismissed. Even if you have to work until the notice period, you are entitled to an interim reference. If you no longer have to go to work, request the reference from your employer.

In addition, the reference should be printed on company stationery and signed by hand by the employer. A reference will help you to find a new job on the labour market. And if you do not agree with the employer’s assessment in your reference, seek a dialogue with the employer! You have the right to have incorrect information corrected or incomplete information added.

Here you can find out what you should look out for in the wording of your reference.

Start looking for a new job

Our tip: Make a list of all your areas of responsibility and projects and give this list to your line manager to draw up your reference. In the best-case scenario, you will at least be spared any disputes about the accuracy of the reference.

As soon as the notice period has expired, a new chapter in your life begins. The reference will help you to find a new job. Your employer must also release you for job interviews if you inform them of the dates in good time.

You now have the task of looking for a new job! If you receive a severance payment, you can use this to bridge the gap until you start your new job and thus overcome financial bottlenecks.

Our tip:

Calculate the amount of your potential severance pay right away in our severance pay calculator and find the right specialist lawyer for labour law to support you locally. AbfindungsHero will help you with your search.

Demand special protection against dismissal!

Are you pregnant, on parental leave or severely disabled? Then you are protected against dismissal and the dismissal is not effective if the competent authority has not approved the dismissal.

Of course, this only applies if your employer was aware of your pregnancy or severe disability. If not, you must inform your employer of your pregnancy or disability. In the case of pregnancy you have 2 weeks and in the case of severe disability you have 3 weeks to do so. This period applies from the date on which you received the notice of termination. However, your special rights will lapse if you do not adhere to this deadline.

Please note: Don’t forget the three-week deadline for filing an action for unfair dismissal, which applies despite your special rights. It is also important to note the special protection afforded by the Dismissal Protection Act: The law does not apply to small businesses. These are companies with ten or fewer employees. However, even in the case of a dismissal in a small company, there are ways to take action against the dismissal. For example, small businesses are also protected against dismissals based on discriminatory motives. Employers must also show social consideration.

You can download our “Checklist & rules of conduct in the event of dismissal by an employer” as a PDF here.