Wrongful Dismissal in Germany: What to Do After Being Fired

What are the main sources of employment law in Germany?

The main sources of German employment law are federal statutes, collective agreements, works council agreements and individual employment contracts. Statutes set minimum standards, collective and works agreements usually improve them, and individual contracts cannot validly undercut mandatory statutory protections.

Key statutory sources

• Civil Code (Bürgerliches Gesetzbuch - BGB) - general rules on employment contracts, notice periods, liability, set-off.
• Protection Against Dismissal Act (Kündigungsschutzgesetz - KSchG) - unfair dismissal protection for employees in larger workplaces (generally >10 FTE and >6 months tenure).
• Part-time and Fixed-term Employment Act (Teilzeit- und Befristungsgesetz - TzBfG) - rules on fixed-term contracts and right to part-time work.
• Working Time Act (Arbeitszeitgesetz - ArbZG) - maximum working hours, rest periods, Sunday and public holiday work.
• Federal Vacation Act (Bundesurlaubsgesetz - BUrlG) - minimum annual leave and vacation pay.
• Act on Continued Payment of Remuneration (Entgeltfortzahlungsgesetz - EntgFG) - pay during sickness and public holidays.
• Minimum Wage Act (Mindestlohngesetz - MiLoG) - statutory minimum wage (check current rate; as of 2024: 12.41 EUR gross per hour).
• General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz - AGG) - bans discrimination in employment.
• Works Constitution Act (Betriebsverfassungsgesetz - BetrVG) - rules on works councils and co-determination in non-board matters.
• Co-determination Acts (Mitbestimmungsgesetz, Drittelbeteiligungsgesetz) - employee representation on supervisory boards in larger companies.
• Evidence Act (Nachweisgesetz - NachwG) - employer duty to provide written information on essential working conditions.
• Social Code (Sozialgesetzbuch - SGB) - social insurance, unemployment benefits, protection of severely disabled employees.

Collective agreements and works council agreements

• Collective bargaining agreements (Tarifverträge):
  • Concluded between unions and employer associations or single employers.
  • Often set higher salaries, more vacation, shorter weekly hours.
  • Apply if both employer and employee are bound or if declared generally binding.
• Works council agreements (Betriebsvereinbarungen):
  • Concluded between employer and works council.
  • Regulate operational issues: working time systems, bonus schemes, mobile work, social plans in restructurings.
  • Direct and binding effect on all employees in that establishment.

Hierarchy of rules

• Statutes set minimum standards.
• Collective agreements and works agreements may improve statutory rules.
• Individual contracts can grant better rights but cannot undercut mandatory statutory protections or binding collective norms.
• Where several rules apply, the most favorable provision for the employee usually prevails.

How are employment contracts structured in Germany?

Employment contracts in Germany can be oral, but employers must provide detailed written information about core terms, and written contracts are standard practice. Typical contracts specify role, place of work, working time, pay, vacation, notice periods, fixed-term rules and references to collective agreements or company policies.

Is a written contract legally required?

• An employment relationship can start based on an oral agreement.
• Under the Evidence Act (NachwG), the employer must provide written documentation of key terms, signed on paper, usually within the first 7 days to 1 month depending on the clause.
• Digital signatures are still risky under current law; many employers use classic wet-ink signatures.

Typical contents of a German employment contract

• Parties and start date
• Job title and duties, often with a flexibility clause allowing reasonable changes in tasks.
• Place of work, sometimes with a mobility clause or reference to remote work rules.
• Working time: weekly hours, overtime rules, reference to working time accounts or flexible schedules.
• Remuneration:
  • Base salary (monthly gross).
  • Bonus or variable pay schemes and conditions.
  • Special payments such as Christmas or vacation bonus (Weihnachtsgeld, Urlaubsgeld) if agreed.
• Vacation entitlement (at least the statutory minimum, often more).
• Probation period (Probezeit) with shorter notice periods, typically up to 6 months.
• Notice periods for both sides, often aligned with or expanding on statutory BGB rules.
• Collective agreement reference, if applicable.
• Confidentiality, IP, and competition clauses; post-contractual non-compete requires compensation of at least 50 percent of last total remuneration.
• Side jobs (Nebentätigkeiten) and approval requirements.

Fixed-term vs open-ended contracts

• Open-ended (unbefristet) contracts are the default and provide strongest dismissal protection.
• Fixed-term (befristet) contracts are regulated by the TzBfG:
  • Without objective reason: max 2 years, usually with up to 3 renewals.
  • With objective reason (e.g. temporary project, maternity cover): can be longer but must be genuinely justified.
  • Any formal mistake (e.g. signing after start date) can make the contract automatically open-ended.

Probationary periods

• Commonly between 3 and 6 months.
• During probation, the statutory notice period can be as short as 2 weeks.
• Probation does not remove all protections; special protections (pregnancy, severe disability) still apply.

What core rights do employees have on working time, pay and leave in Germany?

Employees in Germany have statutory rights to minimum wage, limited working hours, paid vacation, sick pay, maternity protection, parental leave and protection from discrimination. Collective agreements and contracts often grant more favorable conditions than the statutory minimum.

Working time and rest

• Working Time Act (ArbZG) rules:
  • Usual maximum: 8 hours per day, 6 days a week (48 hours weekly).
  • Can be extended to 10 hours per day if average over 6 months does not exceed 8 hours.
  • At least 11 consecutive hours rest between shifts.
  • Restrictions on Sunday and public holiday work, with exceptions.
• Exemptions exist for certain senior executives, but must be examined carefully.

Pay and minimum wage

• Statutory minimum wage (MiLoG):
  • Applies to almost all employees, with limited exceptions (e.g. certain trainees, long-term unemployed in first months).
  • Rate is adjusted regularly by Government and Minimum Wage Commission; check current official rate (as of 2024: 12.41 EUR gross per hour).
• Industry-specific minimum wages exist under Posted Workers Act (AEntG) and collective agreements (e.g. construction, cleaning, care).
• Pay must be at least monthly, usually by the end of the month.

Annual leave and public holidays

• Federal Vacation Act (BUrlG):
  • Minimum 24 working days per year based on a 6-day week, corresponding to 20 days for a 5-day week.
  • Many contracts and collective agreements grant 25-30 days per year.
  • Full vacation entitlement arises after 6 months of employment; before that, pro rata entitlement.
  • Vacation is generally to be taken in the calendar year; carry-over is limited but extended for long-term illness.
• Paid public holidays depend on the federal state (Bundesland) of the workplace.

Sickness and continued pay

• Under the EntgFG, employees receive:
  • Up to 6 weeks continued full pay by the employer per illness episode, if they have been employed for at least 4 weeks.
  • After that, statutory sickness benefits (Krankengeld) from the health insurer at about 70 percent of gross pay (capped).
• Employees must notify the employer without undue delay and usually provide a medical certificate (Arbeitsunfähigkeitsbescheinigung) from day 4, though contracts can require it earlier.

Maternity, parental rights and caring duties

• Maternity Protection Act (MuSchG):
  • Protection period typically 6 weeks before and 8 weeks after birth (longer in some cases).
  • During this period, strict ban on dismissal and special rules on working conditions.
• Parental leave (Elternzeit) under BEEG:
  • Up to 3 years per child, with strong job protection.
  • Possibility to work part-time during parental leave with certain conditions.
• Parents may receive parental allowance (Elterngeld) from the state, depending on prior income.

Anti-discrimination and equal treatment

• The AGG prohibits discrimination on grounds including race, ethnic origin, gender, religion or belief, disability, age and sexual orientation.
• Protection applies from job advertisement through hiring, employment and termination.
• Victims can claim compensation and damages; short deadlines apply (usually 2 months from becoming aware of discrimination to raise written complaint).

How is termination of employment regulated in Germany?

Termination in Germany is tightly regulated, especially in larger companies and after 6 months of employment. Employers must respect notice periods, formal requirements, special protections, and - where the Protection Against Dismissal Act applies - they need a socially justified reason.

Types of termination

• Ordinary termination (ordentliche Kündigung):
  • With notice, subject to statutory or contractual notice periods.
  • In KSchG-covered workplaces, needs a valid reason: conduct-related, person-related, or operational.
• Extraordinary termination (außerordentliche Kündigung):
  • Usually immediate dismissal without notice for serious cause (e.g. theft, assault, severe breach of trust).
  • Employer must act quickly, typically within 2 weeks of knowing the facts.
• Mutual termination agreement (Aufhebungsvertrag):
  • Both sides sign to end the relationship, often with severance and agreed date.
  • Can affect unemployment benefits (blocking period, Sperrzeit) if not negotiated carefully.

When does the Protection Against Dismissal Act (KSchG) apply?

• Employee must have more than 6 months continuous service in the same business.
• Establishment must generally employ more than 10 full-time equivalent employees (some transitional rules for older employees).
• If KSchG applies, the dismissal must be socially justified:
  • Operational reasons (betriebsbedingt) - e.g. reduction of positions, restructuring.
  • Person-related reasons (personenbedingt) - e.g. long-term illness, loss of license.
  • Conduct-related reasons (verhaltensbedingt) - e.g. repeated misconduct despite prior warning.

Notice periods

• Statutory notice periods under the BGB:
  • For employee: usually 4 weeks to the 15th or end of a month.
  • For employer: increases with length of service, from 4 weeks up to 7 months after 20 years of service.
• Contracts or collective agreements may provide longer notice periods, but usually not shorter than statutory for employees.

Special protection against dismissal

• Pregnant employees and mothers in maternity protection period - dismissal normally void without prior approval from competent authority.
• Employees on parental leave - strong dismissal protection.
• Severely disabled employees (Schwerbehinderte) - employer needs approval from the Integration Office (Integrationsamt) before dismissal.
• Works council members - very strong protection, only dismissible for serious cause and with works council consent or court replacement.

Deadlines: how long do you have to challenge a dismissal?

• You must file an action for protection against dismissal (Kündigungsschutzklage) at the competent labor court within 3 weeks of receiving the written termination notice.
• If you miss this deadline, the dismissal usually becomes legally valid, even if it was unlawful.
• The 3 weeks run from the day the letter is delivered to your sphere of control (e.g. mailbox, personal handover).

Severance pay: how is it usually calculated?

• No automatic severance; it is typically negotiated or provided in social plans or specific statutory cases.
• A common settlement corridor in practice is:
  • 0.5 to 1.0 monthly gross salaries per year of service, adjusted for case strength and economic factors.
• In certain operational dismissals, the employer may offer statutory severance of 0.5 monthly salary per year of service if the employee waives a court claim.

How do works councils and co-determination function in Germany?

Works councils represent employees at establishment level and have extensive information, consultation and co-determination rights on many workplace matters. In larger companies, employees can also be represented on the supervisory board through co-determination laws.

Works councils (Betriebsräte)

• Can be elected in private sector establishments with generally at least 5 permanent employees.
• Rights under the Works Constitution Act (BetrVG) include:
  • Co-determination on working time arrangements, overtime rules, technical monitoring, social issues.
  • Information and consultation on business changes, restructurings, and mass redundancies.
  • Co-determination on personal matters like transfers, regrading, and individual dismissals (at least via hearing).
• Employer must hear the works council before any dismissal. Failure to do so makes the dismissal invalid.

Co-determination on the supervisory board

• In companies with more than 500 employees, up to one third of the supervisory board may be employee representatives (Drittelbeteiligungsgesetz).
• In companies with more than 2,000 employees, half of the supervisory board members can be elected by employees (Mitbestimmungsgesetz), with the chair from shareholder side having a casting vote.
• This affects strategic decisions, but not day-to-day employment contracts directly.

Impact on employees and employers

• For employees:
  • Works councils are a key contact for issues with working time, workplace rules, and restructurings.
  • They can support employees in conflicts, accompany meetings, and help negotiate social plans.
• For employers:
  • Major changes and dismissals require structured processes with the works council, often increasing timelines and negotiation needs.
  • Violating co-determination rights can make measures invalid and trigger fines.

What are typical costs and financial aspects in German employment relationships and disputes?

Regular employment costs include gross salary, social security contributions and benefits, while litigation costs depend on salary level and the value of the dispute. In labor courts, each party typically pays its own lawyer in the first instance, even if it wins, but court fees are relatively modest.

Basic employment cost structure for employers

• Salary is usually agreed as a monthly gross amount.
• Employer social security contributions (pension, health, unemployment, care, accident insurance) roughly add about 20 percent on top of gross salary, depending on thresholds and scheme.
• Additional costs can include:
  • Vacation and Christmas bonuses.
  • Company pension schemes.
  • Company car or mobility allowance.
  • Training budgets and other benefits.

Cost structure of typical employment disputes

The value in dispute (Streitwert) in labor courts drives court fees and reference lawyer fees. In termination cases, the Streitwert is normally three months of gross salary.

Note: Figures are indicative and based on typical statutory fee tables (RVG). Many lawyers use flat fees or hourly rates, especially for employers and complex cases.

Who pays legal costs in labor court proceedings?

• First instance (Arbeitsgericht):
  • Each party pays its own lawyer, regardless of outcome.
  • The losing party typically bears court fees, but in settlement cases court fees are often reduced or waived.
• Appeals (Landesarbeitsgericht, Bundesarbeitsgericht):
  • Cost shifting rules can apply; the losing party may have to reimburse part of the other side's costs.
• Legal expenses insurance (Rechtsschutzversicherung):
  • Common for employees in Germany; often covers employment disputes.
  • Check waiting periods and coverage scope before you need it.

How do employment disputes and labor court proceedings work in Germany?

Employment disputes typically start with internal discussions and warnings, and if unresolved may lead to termination, claims or both. Labor court proceedings are relatively fast and focused on settlement, starting with an early conciliation hearing.

Typical escalation steps before court

1. Informal discussion with manager or HR about performance, pay or workplace issues.
2. Written warnings (Abmahnungen) for alleged misconduct, which should describe behavior, breach and consequences.
3. Involvement of works council if present, especially for ongoing conflicts or restructurings.
4. Negotiation of solutions such as new tasks, internal transfer, or mutual termination with severance.

Filing a claim at the labor court

1. Identify the competent court (Arbeitsgericht) based on workplace location or employer seat.
2. Prepare and file a written statement of claim, stating parties, facts and specific requests (e.g. invalidity of termination, payment of wages).
3. Respect the 3-week deadline for termination challenges.
4. The court serves the claim on the employer and sets a date for a conciliation hearing (Güteverhandlung), usually within a few weeks.

Conciliation hearing (Güteverhandlung)

• Conducted by a single professional judge.
• Focuses on exploring settlement, especially in dismissal cases.
• Many disputes end here with an agreement on:
  • End date of the employment.
  • Severance amount.
  • Reference wording (Arbeitszeugnis).
  • Release from duty to work and payment modalities.

Main hearing (Kammertermin)

• If no settlement, the case proceeds to a main hearing with:
  • One professional judge and two lay judges (one from employer side, one from employee side).
  • Evidence hearing, witness examination, detailed legal argument.
• The court issues a written judgment, which can be appealed depending on case value and legal issues.

Timeframes

• First conciliation hearing: usually within 4-8 weeks of filing.
• Main hearing and judgment: typically within 6-12 months, but can be faster or slower depending on the court and complexity.
• Appeals can add another 6-18 months.

When should you hire an employment lawyer or other expert in Germany?

You should consult a specialized employment lawyer whenever high financial or personal stakes are involved, when strict deadlines apply, or when you face complex structures like works councils, collective agreements or special protection rules. Early advice is usually cheaper and more effective than trying to fix mistakes later.

Situations where employees should seek legal advice

• Termination or mutual termination agreement (Aufhebungsvertrag):
  • To assess dismissal validity and severance range.
  • To avoid disadvantages for unemployment benefits (Sperrzeit, Ruhenstatbestände).
  • To secure a favorable reference and end-date structure.
• Complex bonus, commission or LTI schemes where terms are unclear or changed unilaterally.
• Discrimination, harassment or whistleblowing situations, where protection and retaliation risks must be managed carefully.
• Long-term sickness, disability or reintegration, including interactions with pension insurers and Integration Office.
• Non-compete clauses, IP and confidentiality obligations around job changes or self-employment.

Situations where employers should seek legal advice

• Drafting or revising standard employment contracts, bonus schemes and policies, especially after legal reforms.
• Planning and executing restructurings, mass redundancies or site closures, including negotiations with works councils and authorities.
• Handling performance management and misconduct, from warnings to dismissals, to avoid formal errors.
• Managing cross-border hires, postings and remote work from abroad, given tax and social security implications.

Other useful experts and institutions

• Works councils and staff representatives for internal support and procedural checks.
• Unions (Gewerkschaften) for members, including legal support in many cases.
• Chambers of commerce or crafts (IHK, HWK) for employer-side guidance, especially for SMEs.
• Employment Agency (Agentur für Arbeit) to clarify unemployment benefits and obligations after job loss.

What are the next steps if you have an employment issue in Germany?

Your next steps depend on whether you are an employee or an employer and on the urgency of the situation. In all cases, collect documentation, check deadlines and seek early expert advice if the matter affects your livelihood or business.

Next steps for employees

1. Collect documents: employment contract, policies, emails, warnings, termination letters, pay slips, time records.
2. Check deadlines:
   • 3-week deadline for challenging terminations.
   • Possible contractual or collective deadlines for bonus and other claims.
3. Contact your works council or union, if available, to discuss options and get initial support.
4. Review your legal expenses insurance and request coverage confirmation for legal advice.
5. Consult a specialized employment lawyer to evaluate your position and strategy, especially before signing any termination agreement.
6. Register with the Employment Agency (Agentur für Arbeit) as job-seeking immediately after receiving termination, to avoid benefit reductions.

Next steps for employers

1. Map your workforce and structures: headcount, existence of works council, collective agreements.
2. Audit contracts and policies for compliance with current law (NachwG, MiLoG, AGG, ArbZG, data protection).
3. Involve HR and legal early when planning terminations, restructuring or policy changes.
4. Engage with the works council in a structured way where required, documenting all steps and information.
5. Design negotiation strategies for key cases, including severance frames, timelines and communication plans.

A clear view of your rights, obligations and deadlines under German employment law is the foundation for making good decisions, whether you are protecting your job or managing a workforce. Acting early and in an informed way usually creates better outcomes and reduces cost and conflict on both sides.