Termination without notice in Germany: requirements and consequences

A termination without notice (also known as ‘extraordinary termination’) ends the employment relationship immediately – without any notice period. This can have significant consequences for the employee, such as sudden loss of income and a waiting period for unemployment benefits. However, strict requirements must be met for a termination without notice to be effective. In particular, there must be a ‘good cause’ that makes it ‘unreasonable’ for the employer to continue the employment until the end of the notice period. Since the labour courts set high standards in this regard, terminations without notice often do not stand up to legal scrutiny in court. In addition, termination without notice can only take place within two weeks ‘of becoming aware of the relevant facts’.

The most important points at a glance:

• Termination without notice terminates the employment relationship with immediate effect, i.e. without observing a regular notice period.
• However, for such termination without notice to be effective, there must be good cause and a balancing of interests must be carried out. This requires significant misconduct.
• Termination without notice can only be effected within two weeks of becoming aware of the relevant facts. After this period, it is ineffective. Termination without notice and without a warning is also often ineffective.
• The consequences of effective ‘termination without notice’: No wages/salary are paid from the date of termination. The employment agency often also imposes a block on unemployment benefits.
• Action for unfair dismissal: If you want to defend yourself against termination without notice, you must file an action for unfair dismissal within three weeks.

What is ‘termination without notice’?

Termination without notice (also known as ‘extraordinary’ termination) is a termination that ends the employment relationship immediately without observing the notice period. Unlike normal or ordinary termination, there is therefore no notice period. From the day of termination, there is also no further wage/salary. As an employee, you are no longer required to work from the moment you receive the termination. You also have no opportunity to prepare for a job change or unemployment. In most cases, termination without notice also results in a waiting period for unemployment benefits.

Termination without notice can generally be issued by both the employer and the employee. However, it is usually the employer who terminates the employment relationship without notice. However, termination without notice is only legally effective if there is an important, serious reason. In addition, the continuation of the employment relationship must be unreasonable ‘even for one more day’. The requirements of the labour courts are extremely strict in this regard, as employment law in Germany tends to be employee-friendly. This also applies to ‘termination without notice’.

Incidentally, the requirements for termination without notice are regulated in the German Civil Code (BGB), not in the Unfair Dismissal Protection Act. And it does not matter whether you refer to termination without notice or extraordinary termination. Both terms mean the same thing.

Requirements for termination without notice

Termination ‘without notice’ is regulated in Section 626 of the German Civil Code (BGB). According to this, employers or employees may (only) terminate the employment relationship for good cause without observing a notice period if there are facts which, taking into account all circumstances of the individual case and weighing the interests of both parties to the contract, make the continuation of the employment relationship until the expiry of the notice period unreasonable.

These requirements are interpreted by case law in a manner that tends to favour employees. This is because termination by the employer has significant consequences, especially for employees. In detail, an (effective) termination without notice therefore requires the following conditions to be met:

• Existence of good cause: There must be such serious misconduct or a breach of duty that the continuation of the employment relationship until the expiry of the notice period is unreasonable.
• Balancing the interests of the employee and employer: A careful examination must be carried out to determine whether, taking into account all circumstances and both sides (employer and employee), immediate termination is justified.
• Two-week notice period: The termination must be declared within two weeks of becoming aware of the reason for termination (Section 626 (2) BGB).

1. Existence of good cause

The law does not define in detail what constitutes ‘good cause’. It is therefore an ‘undefined legal term’. This means that the courts interpret and specify this term in each individual case. Due to the scope for discretion in individual cases, there are therefore different case groups. However, there must always be significant misconduct that makes it unreasonable to continue the employment relationship until the end of the regular notice period. According to case law, this includes, for example:

• Fraud against the employer, e.g. by feigning illness
• Other criminal offences that damage the employer, e.g. theft, embezzlement, extortion, etc.
• Other criminal offences at the workplace, such as working time fraud, physical assault and coercion at the workplace against colleagues, customers, business partners – under certain conditions, also criminal offences that do not occur at the workplace.
• Serious breaches of obligations under the employment contract, such as betrayal of trade secrets or unauthorised self-imposed leave
• Unauthorised competitive activity with direct competitors during the current employment relationship despite a non-competition clause
• Other, e.g. dismissal due to mobbing, sexual harassment at work, Nazi slogans or the Hitler salute at work

2. Balancing the interests of the employee and employer

If the objective facts are in themselves sufficient to justify termination without notice, the next step is to weigh up the interests. This means:

• All circumstances of the individual case must be taken into account. The criteria for weighing up the interests are: What misconduct has occurred (type, severity, frequency of the violations)? How badly has trust been damaged? How serious were the violations? What operational disruptions did they cause? What economic damage did the misconduct cause? Damage to the business? Can the misconduct be attributed to the employee? How long has the employee been with the company? Are there any maintenance obligations?
• There must be no less severe means of termination without notice (principle of proportionality).
• This principle also includes the question of whether warnings must have been issued. The following applies in principle:
  • If warnings have already been issued regarding the same misconduct, this may argue in favour of the effectiveness of the dismissal.
  • In principle, no warning is required for particularly serious violations that the employer obviously does not have to accept (e.g. serious fraud against the employer).
• The interests must always be weighed up with the idea that it’s unreasonable to continue the employment relationship until the end of the normal notice period.
• It’s not necessary to hear the employee before giving notice of termination.
• In the end, the interests of the person giving notice (usually the employer) must clearly outweigh the interests of the person being dismissed (usually the employee).

The (judicial) balancing of interests between employer and employee often decides the validity of a conduct-related termination. Even in cases of serious breaches of duty, the termination may be invalid if it is disproportionate. Labour courts carefully examine whether termination was truly the last resort or if milder measures would have sufficed.

3. Compliance with the two-week notice period

Termination without notice can only take place within two weeks, Section 626 (2) of the German Civil Code (BGB). The period begins at the point in time at which the person giving notice of termination becomes aware of the relevant facts. Furthermore, the notice of termination must reach the employee within this period.

Important: If your employer terminates your employment without notice even though they have been aware of the reason for termination for more than two weeks, the termination is invalid! The employer must prove that the two-week notice period (and receipt of the termination) has been observed. However, the notice period is suspended if the employer takes measures to clarify the circumstances of the termination (e.g. hearing).

Further general requirements for termination

As already mentioned above, termination without notice must meet strict legal requirements in order to be effective. The following section deals with further general requirements. These include the written form and rules of representation, as well as consultation with the works council. It also examines whether termination without notice is legally possible without a warning.

Written form and rules of representation

Termination without notice must be made in writing, Section 623 of the German Civil Code (BGB). The letter of termination must be signed by the employer or a person authorised to represent them. Verbal termination or termination by email, WhatsApp or fax is always invalid. Incidentally, the termination does not necessarily have to include a reason. However, in the case of termination without notice, the terminating party, i.e. usually the employer, must upon request immediately provide the reason for termination in writing.

If the termination is not made by the employer but by an authorised representative, employees should always check whether a power of attorney has been submitted in addition to the letter of termination. In the absence of such a document, the employee can reject the termination on these grounds. A prompt rejection (usually within one week) leads to the invalidity of the termination (Section 174 BGB). However, there is no right of rejection if the termination is made by a person whom the employee knows to have the authority to do so, such as a human resources manager. Even if the employer has previously informed the employee of the authorisation, the employee cannot reject the termination. In such a case, the rejection does not render the termination invalid.

Important: If in doubt, you should always consult an expert, as many terminations fail due to formal requirements. Under certain circumstances, however, the termination must then be rejected immediately in the correct form and within the specified time limit. A solicitor can advise you on the best course of action if you have doubts about the formal validity of a dismissal. However, a dismissal that is only signed electronically or (only) sent by email is always invalid.

Works council consultation

Even in the case of termination without notice, the works council must be consulted in advance – if there is one in the company. The employer must inform the works council of the reasons for the termination without notice. Without this consultation, the termination is invalid, even if the reason itself is justified.

Termination without notice without warning

Termination without notice and without warning is permissible – but only in exceptional cases. As a rule, termination without notice also requires that the employee has previously received one (or more) warnings. These inform the employee that their conduct or work performance is objectionable. They also make it clear that a termination may follow if the offence is repeated. Termination without notice and without warning is only possible if it is absolutely unreasonable for the employer to continue the employment relationship. In such cases, the employee can be dismissed immediately. However, behaviour that has already been warned about cannot be used again as a reason for dismissal. After all, the purpose of a warning is to give the employee the opportunity to correct their behaviour.

Other general requirements

In addition to the works council, other bodies may also need to be involved in the event of termination without notice if special protective provisions apply. For example, the consent of the integration office is required in advance when terminating the employment of severely disabled persons. Termination is also generally prohibited in the case of pregnant employees or mothers on maternity leave – in this case, the consent of the competent supervisory authority must be obtained in advance. If this consent is not obtained, the dismissal is invalid.

Legal consequences of a dismissal without notice

Assuming that the dismissal without notice is actually effective, the following consequences arise for the employee:

• The employment relationship ends with immediate effect, i.e. without observing a notice period.
• This means that all remuneration claims are also forfeited from the date of dismissal.
• In many cases, the employment agency also imposes a waiting period of up to twelve weeks for unemployment benefits. This applies especially if the employee is accused of conduct contrary to the contract.
• In addition, termination without notice can have a negative impact on the employment reference and make it more difficult to find a new job.

If, on the other hand, the termination without notice is invalid:

• The employment relationship continues with all rights and obligations.
• The employer must pay the wages for the period since the termination was declared on the basis of default of acceptance.
• However, termination without notice can be reinterpreted as ordinary termination by the court or the contracting parties. The prerequisite is that the terminating party can be assumed to have intended to give at least ordinary notice. This applies in the event that the termination without notice is found to be invalid.

In many cases, employers therefore expressly state in the termination that, in the event of the invalidity of the termination without notice, they wish to give at least ordinary (timely) notice (‘alternatively’ ordinary termination).

Dismissed without notice – what needs to be done?

If you receive a dismissal without notice as an employee, you should act immediately. The consequences of dismissal without notice are significant. This is regardless of the validity of the dismissal if you do not defend yourself and allow the deadline for bringing an action for unfair dismissal to expire. You should take the following steps:

• Carefully review the termination letter, note the deadline for filing a lawsuit (3 weeks from receipt of the termination) and seek legal advice immediately. Ideally, you should discuss the termination immediately with a lawyer specialising in employment law in order to assess your options.
• Within three weeks of receiving the termination, an action for unfair dismissal must be filed with the labour court. Otherwise, the termination will be deemed effective by law. Most actions for unfair dismissal are settled quickly, usually within 1 to 3 months. The chances of success are generally good for employees. You can find out more in our article on actions for unfair dismissal.
• In addition, you should secure all relevant documents and evidence, such as warnings, emails or witness statements. This will strengthen your position and increase your chances of receiving a high severance payment. If you file your claim within the deadline, the employer has the burden of proof in the unfair dismissal proceedings to demonstrate that the dismissal without notice was valid.

Frequently asked questions (FAQ)