Termination of employment in Germany is a structured process governed by labor laws to protect both the employer and the employee. The procedures and requirements vary depending on the type of contract and the reason for termination. Below is an overview of the key aspects:
1. Types of Termination
- Ordinary Termination (Kündigung):
- The most common form of contract termination.
- Either party (employer or employee) can terminate the contract by adhering to the notice period outlined in the employment contract or collective agreements.
- Extraordinary Termination (Fristlose Kündigung):
- Immediate termination without notice, permissible only for serious reasons (e.g., gross misconduct, breach of contract).
- Mutual Agreement (Aufhebungsvertrag):
- Termination by mutual consent between the employer and employee. A written agreement is required, often including severance pay or additional terms.
2. Notice Periods
- Notice periods are regulated under the German Civil Code (Bürgerliches Gesetzbuch, BGB), Section 622:
- For employees, the standard notice period is 4 weeks, ending either on the 15th or the last day of a calendar month.
- For employers, notice periods vary based on the employee’s length of service:
- 2 years = 1 month
- 5 years = 2 months
- 8 years = 3 months
- 10 years = 4 months
- 12 years = 5 months
- 15 years = 6 months
- 20 years = 7 months
- Probation Period:
- During probation (maximum of 6 months), the notice period is only 2 weeks.
3. Protected Employees
Certain groups have special protection and cannot be dismissed under ordinary termination without government approval:
- Pregnant Employees: Protection begins from the time the employer is informed of the pregnancy until 4 months after childbirth.
- Employees on Parental Leave: Special protection applies during parental leave.
- Disabled Employees: Dismissal requires prior approval from the Integration Office (Integrationsamt).
- Members of the Works Council: Special protections apply to union or council representatives.
4. Grounds for Termination by the Employer
Employers must provide valid reasons for termination, which fall into three categories:
- Personal Reasons: Inability to perform work due to long-term illness or other personal issues.
- Conduct-Related Reasons: Violations of workplace rules, such as repeated tardiness or misconduct. A formal warning (Abmahnung) is typically required beforehand.
- Operational Reasons: Downsizing, restructuring, or elimination of a role due to economic factors.
5. Severance Pay
- Severance pay (Abfindung) is not mandatory under German law but may be offered in the following cases:
- Termination under mutual agreement.
- If specified in the employment contract or collective agreement.
- By court order during disputes over wrongful dismissal.
6. Termination Procedures
- Written Notice: Termination must always be communicated in written form (not via email or orally) and signed by the employer or employee.
- Reason for Termination:
- For ordinary termination, reasons do not need to be explicitly stated.
- For extraordinary termination, valid reasons must be documented and clearly communicated.
7. Employee Rights During Termination
- Right to Contest: Employees can file a claim with the labor court (Arbeitsgericht) within 3 weeks of receiving the termination notice if they believe it is unjustified.
- Right to a Reference: Upon termination, employees are entitled to receive a work reference letter (Arbeitszeugnis) summarizing their duties and performance.
8. Special Considerations for Fixed-Term Contracts
- Fixed-term contracts automatically end on the specified date without the need for termination, unless extended or converted to a permanent contract.
- Early termination is possible only if explicitly stated in the contract or through mutual agreement.
Summary
Understanding the termination process ensures that both employees and employers follow fair practices and comply with German labor laws. Employees should carefully review their contracts, understand their rights, and seek legal advice if disputes arise. Always consult with your HR representative for personalized support in termination matters.
Disclaimer: HireQuest Global has compiled these helpful tips to assist you in navigating compliance processes effectively. The information provided here is for general guidance only and does not constitute legal advice. It is not legally binding. For specific legal concerns or tailored assistance, we strongly recommend consulting a qualified legal professional or referring to official government resources. HireQuest Global assumes no liability for any actions taken based on this information.