In this blog, we would like to answer a few questions on the topics of terminating an employment contract and a „dismissal protection suit“ (Kündigungschutzklage). We expressly point out that the explanations and statements are non-binding and that they definitely cannot replace consultation on a specific individual case.

1. Did you receive a notice of dismissal? The clock is ticking!

If you want to defend yourself against termination of your employment contract, you do not have much time. There is a period of three weeks from reception of the notice of dismissal and you or your lawyer must file a so-called dismissal protection suit within this period. If you fail to do so within the given time period, the notice of termination will take effect, regardless of whether or not the termination was unjust. The time limit must be adhered to in the case of both ordinary and immediate termination. Only in exceptional cases is further action still possible if you were unable to meet the deadline „despite the application of all due care in the circumstances“.

2. What does dismissal protection mean?

In principle, an employer can terminate their employee at any time by observing the contractual or statutory notice period. Under certain circumstances, however, the employee can defend themselves against the dismissal because they are subject to protection against dismissal. In this case, the employer needs a reason for dismissal; otherwise, the dismissal will be ineffective due to lack of “social justification“. A reason for termination can be

• based on the employee as a person,
• be justified by the conduct of the employee, or
• a reason can arise from urgent operational requirements.

The Labor Court (Arbeitsgericht) will examine whether there is a reason for dismissal or not. If the court determines that there is no reason for dismissal, the court will issue a ruling stating that the employment relationship has not been terminated despite the notice of dismissal. In such a case the employer must continue to employ the employee.

3. Who has a right to protection against dismissal?

Not every employee has a right to protection against dismissal. Protection against dismissal requires that the employee works in a company that usually employs more than ten employees. Employees who work up to 20 hours a week are counted as 0.5 and employees who work up to 30 hours a week are counted as 0.75.

4. Am I without protection if I work in a small company?

If you work in a small company, you have no protection against dismissal in the sense of the “Law on protection against dismissal” (Kündigungsschutzgesetz). Nevertheless, there may still be reasons in such a case that could render a termination invalid. For example, a dismissal is invalid if an existing works council has not been properly consulted, or if a notice violates § 612a of the BGB (German Civil Code).

5. How high will my compensation be?

It is a widespread misconception that employees in Germany are entitled to severance pay after dismissal. In the vast majority of dismissals, such a claim does not exist; it is rather a rare exception. However, the fact that so many people believe that they are legally entitled to severance pay has a reason: Dismissal protection complaints rarely result in a verdict, but rather in a settlement, in which the employer-employee relationship is terminated and the employee is given severance pay. The amount of such compensation is solely a matter of negotiation. Often the negotiations will be based on half a gross monthly salary per year of service with the company. If the legal situation is favorable for the employee, better results can sometimes be achieved. However, if the dismissal is obviously justified, for example because the employee has committed serious crimes to the detriment of the employer, it will be difficult to attain any compensation at all.

6. What does a „dismissal protection suit“ cost?

The costs of the lawyer are dependent on the employee’s salary and are therefore to be calculated on a case-by-case basis. The same applies to court costs. Consult your lawyer about this, they can already calculate the amount for you at the beginning of the mandate. If the parties reach an agreement in the first instance, usually no court costs arise. Important: In contrast to many other proceedings, in a dismissal suit the opposing party does not have to reimburse the costs of the legal counsel in the first instance. For employees with a low income, there is the possibility of applying for legal aid. If this is granted, the lawyer will be remunerated by the state. Anyone who has insurance for legal expenses regarding employment law, does not have to worry about the costs of the dismissal protection suit.