Termination According to Kündigungsschutzgesetz

Is the employee in a bigger business then this Act on Unfair Dismissal will be applicable. When logging in, LG2G will describe what you need to know if firing the employee is correct or not.


When is this law applicable?

This law is applicable for all employers having at least 10 fulltime employees (§23 KSchG). Since this law changed to January 1st 2004, you have to know if you fall under the old or new rules. The old rules remain valid for you if you were already employed on December 31, 2003. The old rules are basically the same as the new ones, however only for employers having up to 5 employees. This means that you are protected against termination if your boss had 6 or more employed persons in December 2003. Contact your attorney to determine the correct applicable law.

What are the rules for a dismissal following the Kündigungsschutzgesetz?

The boss can only give notification, if firing is “socially justified” (§1 KSchG). The Kündigungsschutzgesetz (Unfair Dismissal Act) applies to all private or public companies with more then ten fulltime employees.

Who counts as a fulltime employee?

Employees who are working for at least six months in the same firm. Apprentices do not count as employees. Part-time workers count ½ if they work up to 20 hours a week, and ¾ for up to 30 hours. This statute also requires a balancing of the employer’s and employee’s interests (tending to favor the employee). There are operational, person-related and conduct-related reasons for dismissal, also to be met (§622 III BGB).

When can an employer bring forward operational reasons to dismiss any employees?

Operation reasons apply when a special position is abolished, further employment in another position is not available, and the “Sozialauswahl (social selection)” fell on you. The employer must give detailed reasons on why all three grounds implicate a particular employee. Details depend on whether the operational reasons are either “internal” or “external”.

What is meant by “internal operational reasons” for dismissal?

If your boss wants to fire you for internal reasons then he must prove that

  • he made a genuine operational decision, and described the contents of his decision in detail,
  • he really implemented that decision,
  • he showed the potential impact of his decision on the need to keep the employee (by the time notice takes effect),
  • his decision affected only the workers directly linked to the positions he eliminated.
What is meant by “external operational reasons” for dismissal?

If the boss wants to fire you for external reasons, he must meet the following conditions:

  • Your employer must be able to prove that the alleged external reasons really exist to the extent he alleges.
  • The external reasons must have direct and unavoidable impact on the need to keep the affected employee.
  • Only the employees whose jobs are directly affected by the alleged external reasons get dismissed.
Are there any exceptions to the Sozialauswahl?

The change in the law in 2004 allows the possibility of keeping certain persons out of social evaluation (§1 III 2 KSchG): special knowledge, special abilities or employees important for balanced personnel structure and personnel structure represents a just operational interest.

When is a dismissal socially unjustified?

In balancing the interests of worker and firm, it is vital to look at workers whose jobs are similar and who occupy similar jobs in the hierarchy of the firm. The criteria here include

  • length of employment in the company,
  • one’s age,
  • child (and other dependents) support,
  • health (including disabilities),
  • marital status,
  • job prospects

In other words, the employer must present compelling reasons for dismissing a particular employee and not someone else, who needs the job more. Of course, he has some discretion. The rules on social justification take second place at times, as long as the employer can show compelling reasons in the realms of operations, economics, and other justifiable concerns. With the change of the law in 2004, there is also the possibility to keep certain persons out of social evaluation (die Sozialwahl nach §1 III 2 KSchG): if you have special knowledge, abilities or if you are important for a balanced personnel structure, then this can represent a just operational interest.

What are person-related grounds for firing?

Person-related grounds allege the objective inability to fill your position. They cover for example: constant or frequent illness leaves, loss of state license, lost physical ability due to an accident. This reason for dismissal may only be used as an ultima ratio. Three considerations are necessary:

  1. At the point of time when notice is given, the facts must justify serious concerns that the employee will not be able to do his job in the future.
  2. The prognosis according to 1.) must allow the employer to conclude that considerable disturbances of the operational process will occur, or, that he will have to pay a considerable amount of money due to the inability of the employee to do his job.
  3. Dismissal must pass the balance of interests of the employer and employee. For instance, let’s say a worker has failed to renew his job permit, or the relevant office has not yet made a decision on his permit and no one knows how long the decision will take. In this case, the employer’s interests may override those of the worker.
What are conduct-related reasons for dismissing?

Neither the courts nor the legal experts have come up with perfect criteria for this procedure. As a rule of thumb, we can say only that there are conduct-related grounds for dismissal if an employee has done something truly worthy of blame (e.g. theft of company property).

I just was given a dismissal with the option of altered conditions of employment. Do I have to give into this?

In general, no. This form of dismissal is unlike others in that it follows the bosses contention that “I do not need this worker in that job anymore, but I have other positions he could fill. So I want to shift him from A to B.” If you get a notice like this, you have 3 weeks to accept the notice with or without reservation. (Getting specific: the reservation can only be that the dismissal is not “socially justified.”) Be careful: if you decline to accept the “altered conditions of employment,” your notice will be considered final. But don’t give up now! You can still contest this final notice in court within 3 weeks of your decision (§4 KSchG). As for procedural questions, see the next question.

My boss fired me one month ago. What can I do about it?

Virtually nothing. The law allows you to file a court case within three weeks of dismissal (§4 KSchG). You can get only an extension if some problem prevents you from filing on time despite your best efforts. You will have to file within 2 weeks after solving your problem and within 6 months after the first 3-week deadline. If your head is spinning with numbers, here’s an example. If you were fired on January 15, the first deadline comes on February 5. The very last chance for filing exceptionally will be on June 15.

As I have noticed for some time, my boss has been reorganizing the company by changing job descriptions and even firing people. Now it has got me. My boss is offering me a dismissal pay. How am I to understand that?

Just simply understand that your boss cannot use you in his company anymore and wants “to treat” you to leave. Usually you have no right to demand a severance pay. Do not understand “pay” too literally; it can be either in money or in goods. If you do not have a job to go to immediately following this position, there are some catches, see on page 197, for becoming unemployed and receiving benefits from labor agency. Get consultation from an attorney of your trust. These rules are pretty tricky.

When can I claim a severance payment?

Generally, you do not have the right to demand a dismissal pay just because you lose your job. The exceptions to this rule are

  • instead of suing (or continuing the lawsuit against) your employer for unfair dismissal and claiming your job back, you agree to leave if you receive a severance payment.
  • if the employer has disclosed that he terminated you for redundancy and if he has offered you severance pay for letting the three weeks deadline expire, then you will be entitled to the severance payment as soon as the three weeks have passed (§1a KSchG).
  • in case of operational changes and mass redundancies above a certain threshold, the works council is allowed to negotiate a so-called "Sozialplan (social plan)" with the employer. In such case, you may claim a severance pay under the social plan.
  • if your employer ignores the requirement to negotiate the “if” and “how” of a on operational change/mass dismissal with the works council (so-called Interessenausgleich / reconciliation of interests), you may sue your employer for a severance payment in form of the so-called Nachteilsausgleich (compensation for disadvantages).
  • some collective labor agreements provide for severance payments (e.g. so-called Rationalisierungsschutzabkommen / restructuring avoidance treaties).
  • if the dismissal was unfair, and it cannot reasonably be expected for you to continue, the court will, upon your petition, dissolve the employment relationship and award you a severance payment.
  • if the dismissal was unfair, but it is unlikely that a continued working relationship would serve the business interests of your employer, the court will, upon your employer’s petition, dissolve the employment relationship and award a severance payment.

Additional information