The most important things at a glance:
- In case of termination by the employer, a distinction is made between extraordinary and ordinary termination.
- The requirements then depend on whether it is a termination for personal reasons, conduct-related reasons, or operational reasons.
- Certain groups of employees have special protection against dismissal: This includes, in particular, pregnant women, mothers, works council members, and severely disabled persons.
- Often, a separation agreement can be a sensible alternative to termination.
Note: The term „employee“ below includes all genders (m/f/d) and is used for improved readability..
Is this an ordinary or extraordinary termination by the employer?
In the event of termination by the employer, it must first be clarified whether it is an ordinary or extraordinary (also: termination without notice) termination. This is relevant because different requirements are placed on the two types of termination. In addition, different notice periods apply here.
Extraordinary termination is regulated in Section 626 of the German Civil Code (BGB).
Crucial difference: Unlike ordinary termination, the employment relationship ends here immediately, not according to the statutory notice periods.
To issue an extraordinary termination, a so-called important reason must exist. This regularly occurs in the event of a serious breach of duty by the employee, for example, when committing a criminal offense within the employment relationship.
In principle, the employer can terminate the employment relationship in an ordinary manner, i.e., by observing the notice period. An exception applies if the Protection Against Dismissal Act comes into force. If this is the case, the dismissal must be socially justified for reasons related to conduct, the person, or operational requirements.
Is there protection against dismissal?
General protection against dismissal exists when the Dismissal Protection Act applies.
The Protection Against Dismissal Act only applies to employees, not to managing directors.
Furthermore, it only applies from a certain company size. If more than 10 employees work in the company, the Protection Against Dismissal Act applies.
When calculating the number of employees, the following should be taken into consideration:
- Part-time employees working <20 hours per week are counted as 0.5.
- Part-time employees with <30 hours per week are compensated at a rate of 0.75
- Trainees are not taken into account
Important: Up until the year 2004, the number was 5 employees. This has the consequence that the affected 5 employees (provided they are still employed by the company) are also covered by the general protection against dismissal, even if the company as a whole does not employ 10 employees.
Furthermore, it only applies to employees who have been with the company for more than 6 months.
What needs to be considered regarding general protection against dismissal?
If the Protection Against Dismissal Act applies and thus general protection against dismissal is in effect, employees can only be terminated in the ordinary way if the termination socially justified is. This feature will be filled out depending on the type of termination reason (more on that shortly).
For what reasons can an employer terminate employment?
In case of termination by the employer, there are 3 types of grounds for termination: person-related, conduct-related, and operational.
Termination for personal reasons
As the name suggests, the reason for termination here lies with the employee. It is based on a characteristic or trait of the person that cannot be controlled by the employee.
Consider here, for example:
- Long-term illness
- Loss/Revocation of work permit
- Loss/Revocation of driver's license (especially for professional drivers, in the taxi industry, bus drivers)
- Drug/Alcohol Addiction
- Loss/revocation of professional practice license (e.g., medical license)
- Inability to work due to imprisonment
- Lack of personal or professional suitability
Prerequisites for termination for reasons related to the person are:
- Negative prognosis
First, it must be determined that the employee can no longer perform their work.
- Impairment of significant interests of the employer
Then the employer must face unreasonable burdens due to the employee's absence.
- Impossibility of continued employment
Continued employment of the employee – even in another position within the company – must be impossible. Therefore, the employer must examine all possibilities for continued employment before termination.
- Balancing of interests
Finally, a so-called balancing of interests must be carried out. The protected interests of the employee are weighed against those of the employer. If the employee's protected interests outweigh those of the employer, the termination is invalid.
Further details on termination for reasons related to the employee can be found in our article on Termination for personal reasons.
Excursion: Termination Due to Illness
A special case of termination due to personal reasons is termination due to illness. You can find more information about termination due to illness in our article on Termination due to illness.
Termination for cause
The reason for termination lies in the employee's conduct. It is based on behavior by the employee that also constitutes a breach of their duties in the employment relationship.
Consider here, for example:
- Mobbing
- Personal mobile phone use at work
- So-called „faking illness“
- Taking vacation without authorization
- Violations of company operational order
- Drug abuse and alcohol consumption in the workplace
- Frequent lateness
- Late submission of sick note (multiple times)
- Non-disclosure of illness (multiple times)
Excursion: Warning before termination for misconduct
In principle, a warning is required for termination due to conduct. Termination due to conduct is only permissible if the warning does not lead to the desired outcome. This is because the employee's behavior is controllable (in contrast to dismissal due to employee conduct or operational reasons) and to first give the employee the chance to change their behavior.
The termination must then relate to conduct that has previously been warned against. For example, it is impermissible if the warning related to completely different conduct.
For the warning to be effective, the following conditions must be met:
- The employee's admonished behavior must be precisely identified and described.
- The warning letter must clearly state that repeat offenses will lead to termination.
Further details on termination for conduct can be found in our article on termination for conduct.
Redundancy dismissal
In the case of operational termination, the reason for termination does not lie with the employee but originates with the employer. Reasons for operational termination can include the cessation of operations, outsourcing of a part of the business, general restructuring, or a significant decline in orders. Since the reason for termination originates with the employer and the employee is „not to blame,“ high standards must be met for an operational termination.
Prerequisites for a redundancy dismissal are:
- Urgent operational requirements
First, the characteristic of urgent operational requirements must be met. The operational reasons leading to the termination decision must directly result in a loss of jobs.
- Lack of continued employment opportunity
Then, there must be no other employment opportunities for the employee in a comparable position within the company.
- Flawless social selection / social selection in case of operational termination
Finally, a flawless social selection must have been made. The social selection follows the idea that employees for whom termination represents the least hardship are dismissed.
Further details on dismissal for operational reasons can be found in our article on Termination for operational reasons.
Is there special protection against dismissal?
In addition to general protection against dismissal, some social groups are also entitled to special protection against dismissal. For these groups, special requirements must be met for a dismissal to be socially justified. The groups concerned are:
- Pregnant
- Mothers
- Parents on parental leave
- Works council members
- Severely disabled
Specific requirements apply to the validity of a termination for each individual group. In the case of severely disabled persons, for example, the prior consent of the integration office must be obtained. Since errors can quickly occur in practice, which then lead to the invalidity of the termination, it is advisable to seek the support of a Specialist lawyer for employment law to fall back on.
Notice period for termination by employer
Proper termination
First, a distinction must be made here between so-called rescission by the employee and termination by the employer. Rescission by the employee is a termination initiated by the employee. It is regulated in § 622 I BGB. The employment relationship can generally be terminated with a notice period of 4 weeks, either on the 15th of a month or at the end of a month, unless it is agreed that the longer employer notice periods also apply in the case of rescission by the employee.
In cases of employer termination, the longer notice periods specified in § 622 II BGB apply. Here, the notice period depends on the duration of the employment relationship. The longer it has existed, the longer the notice period.
Extraordinary termination
In contrast, extraordinary termination has no notice period. The employment relationship can therefore be terminated with immediate effect. However, for an extraordinary termination to be effective, there must be a valid reason, as described above.
Does the termination have to be in writing?
Yes. The termination must be in the so-called written form, which is regulated in § 623 of the German Civil Code (BGB). This means that the declaration of termination must be recorded on paper and signed by hand.
Important: WhatsApp messages, SMS, MMS, faxes, or emails therefore do not satisfy the written form requirement!
How should the termination be worded?
The termination notice must clearly state that the employment relationship is to be ended. In addition, the date of termination must be specified.
Is a mutual termination agreement worthwhile instead of a termination?
A separation agreement instead of termination can be worthwhile for both employers and employees.
A mutual termination agreement avoids a potentially lengthy and costly termination protection procedure and ends the employment relationship by mutual consent.
For the employee, a termination agreement has the advantage that severance pay can be agreed upon. Additionally, the issuance of a reference letter and even its content can be stipulated in the termination agreement. Furthermore, it must be considered that even if a termination is ineffective, employees often no longer wish to be employed by the employer. This is understandable, as the relationship between employer and employee is negatively affected by reasons related to the person or behavior. The termination agreement then enables a clean break, which also brings the aforementioned advantages. A disadvantage, however, can be that the employment agency may impose a blocking or suspension period for receiving unemployment benefits.
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