Termination of Employment

Formalities, Deadlines, Protection Against Dismissal, etc.

The termination of an employment relationship through the termination of the employment contract is a key issue in employment law that we deal with on a daily basis. Since the employer terminates the employment contract much more commonly than the employee, we always focus on the protection against dismissal.

In addition to the formalities, the decisive factor is whether the Dismissal Protection Act applies. Since everyone bears their own costs before the labor court, regardless of whether they win or lose, a view of the costs, for example covered by legal expenses insurance, is also essential.

What should be considered when terminating the employment relationship?

The termination of an employment contract must be in writing. Termination by e-mail, SMS, fax or verbally is always invalid. The notice of termination must be given by the managing director or an employee of the employer who is responsible for this, e.g. the HR manager. In case of doubt, the employee should immediately give written notice of a lack of authority. In addition, the period of notice must be observed in the case of proper notice of termination. The correct period of notice can be found in Article 622 of the German Civil Code (BGB), the employment contract, the collective bargaining agreement or sometimes in a works agreement.

Should the Dismissal Protection Act apply to the employment relationship, the employer needs a reason for the termination that is related to operations, conduct or persons. These reasons must meet high standards.

If there is a works council in the company, it must be consulted before the termination. In practice, many terminations fail because the works council was not consulted properly.

Further special requirements apply in the case of mass dismissals or the dismissal of employees with special protection against dismissal, such as severely disabled persons, pregnant women, apprentices or works council members.

What does termination without notice or extraordinary termination mean?

The employee or the employer may also terminate the employment contract without notice pursuant to Article 626 of the German Civil Code (BGB). However, this requires that therefor an important reason must exist. Moreover, this reason must not be known more than 2 weeks before the notice of termination is served. Extraordinary termination is thus quite common in practice, but rarely effective.

What must be included in a letter of termination?

A sample notice of termination looks something like this:

Ordinary notice of termination

Dear Ms/Mr …,

Unfortunately, we have to terminate the existing employment relationship with you in compliance with the ordinary period of notice as of … (date), alternatively at the next possible date.

The Works Council was duly consulted before this notice of termination was issued.

It has agreed/opposed to the termination/not expressed its opinion within the statutory period of notice.

We would like to point out that, in accordance with Section 38 (1) SGB III, you are obliged to register personally with the Employment Agency as a job seeker within three days of receiving this notice of termination. If you do not comply with your obligation within the specified period, the Employment Agency may order a one-week blocking period during which you will not receive unemployment benefits (Section 159 (1) sentence 2 No. 7, (6) SGB III). In addition, you are obliged to actively look for employment.

What to do Against a Termination?

An action for protection against dismissal can only be brought before the labor court within 3 weeks. If this deadline is missed, help is rarely possible. It must be taken into account that a high number of terminations by the employer prove to be ineffective as a result and, on the other hand, that in more than 80% of the cases before the labor court the employment relationship is terminated against payment of a severance package.

As an employee, when should you contact an attorney?

Employees with legal protection insurance should always consult a lawyer in the event of termination. Usually, the legal protection insurance always covers the costs associated with a dismissal. In an initial consultation, the prospects of success of an action for protection against dismissal, an expected severance payment and the employee’s goals can be clarified and an appropriate strategy can be determined.

The same applies to employees who do not have legal expenses insurance. However it is the rule that the employee has to bear the costs of the legal advice himself. In view of the expected severance payment, the amount of which can be forecast quite reliably in advance, the legal fees are usually worthwhile.

see: Employment law for employees

Why should an employer seek advice from an attorney?

The employer should consult a lawyer in advance to prepare the termination and have a lawyer accompany the labor court proceedings. This avoids formal errors in the termination and service of notice and significantly improves the prospects for an economically favorable outcome in termination protection proceedings. In many cases, a legal dispute can also be avoided by reaching an agreement or by concluding a termination agreement. These strategic questions can be clarified in advance in discussions with a specialist attorney for employment law.

Dismissal protection proceedings should not be conducted without the assistance of a lawyer. Especially in the negotiations for a settlement or severance pay accompanying the dismissal protection proceedings, the correct preparation of the proceedings, the tactics and, last but not least, the personal experience of the lawyers with the judges are easily worth the legal fees incurred.

Since 2003, we have been conducting approximately 200 dismissal protection proceedings each year in Berlin, Potsdam, Cottbus and Frankfurt/Oder. So far, this experience has paid off for our clients.

MAYR Kanzlei für Arbeitsrecht provides this topic article as an orientation guide. For individual advice, advice should always be sought from a specialist attorney for employment law. We draw your attention to the fact that we can therefore accept no liability for the accuracy and completeness of this article.