How do you terminate an employee in Germany in 2026?
Before you can dismiss anyone covered by the Betriebsverfassungsgesetz (Works Constitution Act), you must consult the Betriebsrat (works council) and wait for its response. Skip that step and the dismissal is void, regardless of the underlying reason. The council has 7 days to respond on an ordinary dismissal, 3 days on an extraordinary one.
· Germany guide
Illustration · Berlin, Germany
Germany's Kundigungsschutzgesetz (KSchG) makes dismissal one of the most procedure-heavy processes in Europe. KSchG protection kicks in after more than 6 months of service in an establishment with more than ten employees. Where a works council (Betriebsrat) exists, you must consult it before every dismissal. A dismissed employee has 3 weeks to file a claim with the labour court. After that deadline, the dismissal is legally valid even if it was not valid at first.
The legal minimum notice under BGB section 622 starts at 4 weeks for employees with less than two years of service. It rises through a tenure scale to 7 months at twenty or more years. Notice always runs to the end of a calendar month. During an agreed probationary period of up to 6 months, either side can end employment with 14 days notice on any calendar day.
There is no automatic severance right on any dismissal. Where an employer cites operational redundancy and the employee does not challenge in court, the KSchG section 1a formula pays 0.5 months of gross salary per year of service. A court award is capped at 12 months of salary. That cap rises to fifteen months for employees over fifty with fifteen or more years, and to eighteen months for those over fifty-five with twenty or more years.
What must you do before dismissing a German employee?
Where a works council (Betriebsrat) exists, you must consult it before issuing any notice. The council has 7 days on an ordinary dismissal and 3 days on an extraordinary (summary) dismissal to respond. A dismissal issued without this step is not valid (BetrVG section 102).
Not every German employer has a works council. The law only requires one where at least five permanent employees with voting rights are employed. But if one has been elected, its role in the dismissal process is not optional.
Germany's Betriebsverfassungsgesetz (BetrVG) gives the works council a mandatory consultation right before every dismissal. Under BetrVG section 102, a dismissal carried out without prior works-council consultation is void, not merely defective. The council has 7 days to respond to an ordinary dismissal (silence after that period counts as consent) and 3 days on an extraordinary dismissal.
Source: Federal Ministry of Labour and Social Affairs (BMAS), Labour Law
The employer must give the works council all information relevant to the dismissal decision: the reason, the employee's details, and the intended notice period. The council can raise objections; those objections do not prevent the dismissal, but they do give the employee the right to demand continued employment pending a court decision.
Protected employees
Certain categories of employee enjoy strengthened protection against dismissal and, in some cases, an absolute ban. Attempting to dismiss any of the following without the required additional steps or approvals creates immediate legal liability:
- Pregnant employees and new mothers, protected under Mutterschutzgesetz for the duration of pregnancy and for four months after birth. Dismissal during this period requires prior approval from the state authority (Gewerbeaufsichtsamt).
- Employees on parental leave, protected under BEEG for the duration of Elternzeit.
- Works council members, who can only be dismissed summarily for cause, with the works council's or labour court's consent.
- Severely disabled employees, where dismissal requires prior approval from the Integration Office (Integrationsamt).
- Employees on sick leave: long-term sickness can constitute a ground for dismissal under KSchG, but only after a full assessment of future prognosis and undue operational burden.
The three valid grounds under KSchG
Where KSchG applies (more than 6 months of service, establishment with more than ten employees), a dismissal is only socially justified on one of three grounds:
- Person-related reasons (personenbedingt): inability to perform the role due to long-term sickness, loss of a required licence, or similar personal incapacity.
- Conduct-related reasons (verhaltensbedingt): repeated or serious breach of contractual obligations, typically requiring prior warnings for ordinary misconduct.
- Operational reasons (betriebsbedingt): genuine redundancy of the role, with a documented selection process showing social criteria were applied (length of service, age, dependency, disability).
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Confirm KSchG scope
Check whether the employee has more than six months of service and whether the establishment employs more than ten employees (weighted). Both conditions must be met for KSchG protection to apply.
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Check for absolute protection
Verify whether the employee falls into a protected category: pregnancy, maternity protection, parental leave, works-council membership, or severe disability. Additional authority approvals are required before those dismissals can proceed.
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Consult the works council
Where a Betriebsrat exists, submit written consultation documentation with the dismissal reason, employee details, and proposed notice period. Wait the full response window before issuing any notice letter.
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Issue written notice
Deliver the notice letter in writing. Confirm the notice period against the BGB section 622 tenure ladder and verify the effective date falls correctly to the fifteenth or the end of the calendar month.
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Offer KSchG section 1a severance where applicable
If the dismissal cites operational reasons, include in the notice letter the offer of severance at the KSchG section 1a formula rate, conditional on the employee not filing a dismissal protection claim within the three-week court deadline.
How much notice must you give in Germany?
The legal minimum notice is set by BGB section 622. It starts at 4 weeks to the fifteenth or the end of the calendar month for employees with less than two years of service. It rises through a tenure scale to 7 months to the end of the calendar month at twenty or more years.
During an agreed probationary period of up to 6 months, either side can give 14 days notice effective on any calendar day.
| Length of continuous service | Minimum employer notice |
|---|---|
| Less than 2 years (after probation) | 4 weeks to the 15th or month-end |
| 2 years | 1 month to month-end |
| 5 years | 2 months to month-end |
| 8 years | 3 months to month-end |
| 10 years | 4 months to month-end |
| 20 or more years | 7 months to month-end (statutory cap) |
Notice must be given in writing. The effective date rule is strict: a notice letter delivered on 14 October takes effect to the end of October (or the 15th, whichever applies), but one delivered on 16 October takes effect to the end of November. Timing the delivery of notice letters correctly matters.
Employee resignation notice
An employee resigning gives 4 weeks notice to the fifteenth or the end of the calendar month, regardless of tenure. A contract can lengthen this period, but under BGB section 622(6) the employee's contractual notice period may never be longer than the employer's notice obligation for the same employee.
Notice during probation
During an agreed probationary period of up to 6 months, either party gives 14 days notice on any calendar day (not limited to the 15th or month-end). The contract must state the probation period in writing.
When does severance apply and how is it calculated?
Germany has no automatic severance right on any dismissal. Severance arises in four ways. The KSchG section 1a voluntary formula. A court award under KSchG section 9/10. A social plan negotiated with the works council. Or a mutual termination agreement (Aufhebungsvertrag).
Where an employer cites operational redundancy and the employee does not challenge in court, KSchG section 1a pays 0.5 months of gross monthly salary per year of service. Any period over six months rounds up to a full year.
The KSchG section 1a route is the most common path to a clean exit on an operational redundancy. The employer states in the dismissal notice that severance will be paid if the employee does not file a claim within the 3 weeks court deadline. If the employee accepts by letting the deadline pass, they receive the formula payment.
Court-ordered compensation cap under KSchG section 10
Where a dismissal reaches the labour court and the court rules it was unjustified but reinstating the employee is not reasonable, it can award a compensatory payment capped at 12 months of gross monthly salary under KSchG section 10. This rises to fifteen months for employees aged fifty or over with at least fifteen years of service, and to eighteen months for those aged fifty-five or over with at least twenty years of service.
These caps apply only to court-ordered awards. A negotiated Aufhebungsvertrag can provide any amount agreed between the parties.
Social plans
Where collective redundancies trigger works-council consultation, the works council can negotiate a Sozialplan (social plan) setting out enhanced severance terms for affected employees. Social plan amounts are not capped by KSchG and can significantly exceed the statutory formula, particularly where the works council has strong negotiating power.
The KSchG threshold
KSchG protection only applies where the employee has been continuously employed for more than 6 months AND the establishment employs more than ten employees (counted on a weighted basis under KSchG section 23). Employees in smaller establishments have no KSchG protection, though general civil-law good-faith obligations still apply.
When do collective redundancy rules apply in Germany?
You must notify the Bundesagentur fur Arbeit (Federal Employment Agency) when more than 5 employees are dismissed within 30 days in an establishment with between twenty and sixty employees. The threshold is higher for larger establishments.
The notification triggers a one-month waiting period before any dismissals take effect. Dismissals issued before the Bundesagentur has processed the notification are not valid.
The thresholds under KSchG section 17 are:
- More than 5 employees dismissed within 30 days in an establishment with 20 to 60 employees
- 10 percent or more than 25 employees dismissed within 30 days in an establishment with 60 to 500 employees
- At least 30 employees dismissed within 30 days in an establishment with 500 or more employees
Before notifying the Bundesagentur, the employer must consult the works council under BetrVG section 17, providing a written account of the reasons, the number and categories of affected employees, the proposed timeline, and the selection criteria. The works council can raise concerns; the employer must consider them and respond in writing before filing the notification.
Unlike the UK, Germany does not prescribe a fixed minimum consultation period in calendar days (no equivalent of a thirty-day or forty-five-day minimum before the first dismissal takes effect). The Bundesagentur waiting period of one calendar month after the notification is filed is the effective gate. The works council consultation under BetrVG section 102 for individual dismissals runs in parallel and must be completed separately for each employee.
Failing to file the KSchG section 17 notification before dismissals are issued renders those dismissals void. German courts have applied this rule strictly, and several large-scale restructurings have been unwound on procedural grounds after employers misjudged the threshold or the filing sequence.
What is an Aufhebungsvertrag and when should you use one?
An Aufhebungsvertrag is a mutual written agreement to end employment on agreed terms and a set date. Both sides sign. There is no dismissal, so KSchG protection does not apply and there is no court challenge.
It is the standard route for a senior exit or a mutually agreed parting. Use it when speed and certainty matter more than working through the notice scale.
The Aufhebungsvertrag must be in writing and signed by both parties. A verbal agreement is void. Courts examine these agreements carefully and will set them aside if the employee signed under pressure (physical presence at a meeting called without warning, for example) or without time to reflect. As a practical safeguard, give the employee reasonable time to consider the offer and take advice before signing.
Typical structure:
- Termination date, agreed by both parties, not bound by the statutory notice ladder
- Severance payment, freely negotiated. The KSchG section 1a formula is often the floor; the ceiling depends on the employee's negotiating position and the employer's appetite for a clean exit
- Release from duties, including paid garden leave from the date of signing to the termination date where agreed
- Holiday and bonus settlement, accrued entitlements calculated and agreed in the document
- Reference (Arbeitszeugnis), agreed wording for the employment reference. In Germany, employees have a legal right to a written reference; the content is agreed in the Aufhebungsvertrag to avoid later disputes
- Return of company property and post-termination obligations
- Waiver of further claims by both parties
One material consideration: signing an Aufhebungsvertrag can trigger a benefit suspension of up to twelve weeks under German unemployment insurance rules. Employees aware of this may push for a higher severance to compensate. Factoring this into your offer helps negotiations move faster.
How Teamed runs Germany terminations
Teamed becomes your legal employer of record in Germany for from $599 per employee per month, with zero FX mark-up in any currency. Works-council consultation, notice calculation, and final-pay reconciliation all run through Teamed's Germany ops on one platform.
Decisions on who to dismiss, on what grounds, and on what commercial terms remain yours. We handle the process.
Real HR and legal experts handle your Germany hires, from the first written employment contract through every payroll run and social insurance filing. An actual person, not a ticket queue. There is no setup fee and no exit fee, and every employer cost passes through at cost, itemised on every invoice.
The split of responsibilities under EOR for Germany terminations:
| What Teamed handles | What the client decides |
|---|---|
| Works-council consultation preparation and timing | Whether to dismiss, the ground, and the timeline |
| Written notice drafting to meet BGB 622 format and timing rules | Whether to offer an Aufhebungsvertrag instead |
| KSchG threshold assessment (do KSchG protections apply?) | Performance standards and what constitutes conduct grounds |
| KSchG section 1a severance calculation and documentation | Whether to offer enhanced severance above the KSchG formula |
| Bundesagentur notification for collective redundancies above threshold | Business case for operational redundancy and selection criteria |
| Final payroll: notice, accrued holiday, severance, social insurance | Communication with the wider team |
| Coordination of labour-court-stage support if a claim is raised | Settlement vs defence strategy |
The economics work because Teamed carries the procedural risk at scale across many Germany employers, not just yours. Labour court proceedings for an individual employer are disruptive; built into platform overhead, the exposure is managed systematically.
EOR payroll, contractor onboarding, and entity setup all live on one platform. A Germany contractor who converts to payroll keeps their record, and that same employee can graduate to your own German GmbH without switching systems. Run the Crossover Calculator to see the month the model flips. EOR is the right model for a first Germany hire, until it isn't. Start from the Germany hiring overview; each guide here takes one layer of German employment law.
Key sources: BMAS Labour Law, Kundigungsschutzgesetz (KSchG), and BGB section 622.
Frequently asked questions
Does Germany require a works council's approval before dismissal?
Where a Betriebsrat (works council) exists, BetrVG section 102 requires mandatory consultation before every dismissal. The council has 7 days to respond on an ordinary dismissal and 3 days on an extraordinary dismissal. Issuing notice before that window closes renders the dismissal void. Not every establishment has a works council, but where one has been elected its role is not optional.
How much notice must you give a German employee?
Statutory employer notice under BGB section 622 starts at 4 weeks to the fifteenth or end of the calendar month for employees with less than two years of service. It steps up through a tenure ladder to 7 months to the end of the calendar month at twenty or more years of service. During an agreed probationary period of up to 6 months, either party gives 14 days notice on any calendar day.
Is there a statutory severance entitlement in Germany?
No. Germany has no general statutory severance triggered by any dismissal. Severance most commonly arises via the KSchG section 1a formula, which produces 0.5 months of gross monthly salary per year of service when an employer cites operational redundancy and the employee does not file a dismissal protection claim within the 3 weeks court deadline. Court-ordered compensation is capped at 12 months of salary under KSchG section 10.
When does KSchG unfair dismissal protection apply?
KSchG applies when the employee has more than 6 months of continuous employment AND the establishment employs more than ten employees (weighted headcount per KSchG section 23). Both conditions must be met. If either is absent, KSchG does not apply, though general civil-law obligations still govern the dismissal.
How long does a dismissed German employee have to challenge the dismissal?
3 weeks from receipt of the written notice to file a Kundigungsschutzklage (dismissal protection claim) with the labour court. After that deadline, the dismissal becomes legally valid even if it was technically void at the point of issue. The deadline is strict and courts allow very limited exceptions.
What is an Aufhebungsvertrag and when is it used?
An Aufhebungsvertrag is a mutual written termination agreement that ends employment by consent on agreed terms. It sidesteps KSchG entirely because there is no dismissal. It must be in writing to be valid. It is the standard route for senior exits and mutually agreed partings where both parties want speed and certainty rather than the statutory notice ladder and the risk of a court challenge.
The works-council consultation step catches employers out more often than the notice period calculation. You cannot backfill it. If notice goes out before the council has had its response window, the dismissal is void from day one, and re-running the process restarts the whole clock.
Germany gives dismissed employees 3 weeks to file a Kundigungsschutzklage. Most employers track that deadline. Fewer track the works-council window that has to close before the notice letter goes out.
One skipped step voids the dismissal entirely. The process restarts, the exposure grows.
We run it in the right order, every time.
