Dismissal for Operational Reasons

Termination of employment by a business-related dismissal is the most common dismissal as a result of an economic downturn such as the Covid-19 crisis. Whereas in good economic times dismissals for behavioural or personal reasons play the main role, for companies in economic distress the focus is on staff reductions by means of dismissals for operational reasons.

However, even dismissals for operational reasons – if the Dismissals Protection Act (KSchG) applies – are subject to strict conditions. The labour courts examine whether there really is a business-related reason, whether the correct social selection has been made and whether there are no vacancies. In addition, the works council must be properly consulted and often a mass dismissal notice must be filed.  A detailed examination of the dismissal decides what the chances of success are before the labour court and whether severance pay is an option.