What is a termination?
Let us first look at the term “termination” from a purely legal point of view: termination is a unilateral, legally constitutive declaration by which at least two contracting parties want to end an existing contractual relationship. That means: with the termination of an employment relationship, either the employer or the employee ends the employment contract at a legal level.
The unilateral declaration means that the other contracting party does not have to agree with the termination for it to be lawful. The termination therefore takes effect as soon as it is declared to the other contracting party.
It is this last point that distinguishes termination from an offer: with an offer, all that is made is an offer, not yet legally binding, to end or change the employment contract. This offer is not legally effective without the consent of the contracting party.
Types of termination
When an employment relationship is terminated, three different types of termination are distinguished: ordinary termination, extraordinary termination and termination without notice.
Ordinary termination
With ordinary termination, the contractually and legally defined rules on the notice period are observed. No important reason is needed for this termination. The wish to end the employment relationship is therefore already enough here.
There is, however, an important difference between employee and employer: the employee can in principle always give ordinary notice, as long as they keep to the notice periods. The employer, by contrast, has to observe the protection against dismissal that applies to some employees.
Extraordinary termination
With extraordinary termination, compared with ordinary termination, no notice periods do not have to be observed. Instead, employer or employee has to present an “important reason”. By an “important reason”, the German Civil Code (Section 626 (1) Bürgerliches Gesetzbuch, BGB) means a particularly serious cause for the termination.
Extraordinary termination can be declared by both sides. Extraordinary termination can apply, for example, in cases of theft, serious insults or refusal to work.
Extraordinary termination can also be combined with a run-out period such as “until the end of the month”. It also applies when the termination has to happen for operational reasons and ordinary termination is not possible.
Termination without notice
In many, but not in all cases, extraordinary termination is also termination without notice. That is why termination without notice, just like extraordinary termination, needs an “important reason”. An effective termination without notice has to meet all of the following conditions:
- substantial breach of duty / urgent suspicion: waiting out the notice period must be unreasonable because there is a serious breach of duty or an urgent suspicion.
- Unlawfulness and culpability: the breach must be unlawful, there must be no justifying circumstances and the breach must have been committed culpably.
- no milder means: there must be no milder means available for continuing the employment relationship, such as termination with the option of altered conditions, a formal warning or a transfer.
- Weighing of interests: in the weighing of interests, the employer’s interest in ending the employment relationship immediately must outweigh the employee’s interest in ordinary termination.
- Two-week deadline: the termination must be declared within two weeks of the reason for termination becoming known.
The notice period: what does it actually mean?
If there is no “important reason” for the termination, the so-called notice period has to be observed. It follows from the employment contract, a collective agreement or works agreement, or from the law. The notice period pushes back the end of the employment relationship. Employees have to keep going to work until the end of the notice period and employers have to keep paying wages and salaries.
The statutory notice period
If the employment contract does not set an exact period, or if it refers to the statutory notice period, we speak of a minimum notice period of four weeks to the 15th of the month or to the end of the month. There are, however, exceptions to this statutory notice period
With the minimum notice period of four weeks, termination to the 15th of the following month or to the end of the month is allocated as follows:
| Termination to the 15th of the following month | Termination to the end of the month | |
|---|---|---|
| in months with 31 days | termination by the 18th | termination by the 3rd |
| in months with 30 days | terminations by the 17th |
termination by the 2nd |
| in February | termination by the 15th | termination by 31 January |
|
in leap years |
termination by the 16th | termination by 1 February |
Example:
Mr Müller is given ordinary notice on 6 August. His notice period therefore runs until 15 September.
Ms Schmidt is given ordinary notice on 21 July. Her notice period therefore runs until 31 August.
Small businesses
For businesses with fewer than 20 employees, the notice period of four weeks can be set in the employment contract without a fixed termination date. That means that if the termination is declared on 6 August, for example, the notice period ends on 3 September instead of on 15 September.
For part-time staff the hours are counted accordingly: part-time staff who work up to 20 hours per week count as 0.5 full-time employees. Part-time staff who work up to 30 hours per week count as 0.75 full-time employees.
Example:
A company has 23 employees. Of those, however, 7 employees work part-time: 5 with 20 hours and 2 with 30 hours. The calculation is therefore as follows:
16 (full-time employees) + 5 * 0.5 (part-time with fewer than 20 hours per week) + 2 * 0.75 (part-time with fewer than 30 hours per week) = 20 full-time employees
Short-term employment
In principle, the notice period can only be shortened for individual contracts if the employment relationship is temporary help work lasting one to three months.
Length of employment
If the employer gives notice, the employee’s length of employment also has to be taken into account for the notice period. All periods of employment should be included, including periods before the age of 25. This is the view of the European Court of Justice (ECJ), even though Section 622 (2) of the German Civil Code (Bürgerliches Gesetzbuch, BGB) provides for a different rule. Because of the German General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz, AGG), all periods of employment should be counted towards the notice period.
Overview of notice periods by length of service:
| Length of service | Notice period (to the end of the calendar month) |
|---|---|
|
6-month probationary period |
2 weeks |
| 2 years | 1 month |
| 5 years | 2 months |
| 8 years | 3 months |
| 10 years | 4 months |
| 12 years | 5 months |
| 15 years | 6 months |
| 20 years | 7 months |
If, on the other hand, the employee gives notice, the statutory notice period of four weeks always applies. Unless a longer notice period is set out in the employment contract. The notice period for the employee may not be longer than the one for the employer.
Extended notice
If a notice period is set in the employment contract that goes beyond the statutory period, termination no longer takes effect to the 15th of the month. Instead, the notice period is calculated from the end of the month of termination in each case.
Example:
Ms Kosse has been working at the company for 10 years. She is given notice on 14 July. The calculation of her notice period therefore starts from 31 July. Her notice period therefore runs until 30 November, and not until 15 October as it would with the four-week notice period.
Special cases of termination
Certain groups of employees enjoy special protection against dismissal (special dismissal protection):
- works council members
- pregnant women and new mothers in the first four months after giving birth
- employees on parental leave
- people with severe disabilities
Works council members
Members of the works council enjoy special protection against dismissal. The reason for this is to make sure that they can carry out their duties on the works council without fear of losing their job.
This special dismissal protection prevents ordinary termination of works council members, unless the business is being closed down.
Works council members can, however, still be given extraordinary notice if there is an important reason. Such an extraordinary termination is only permissible with the express consent of the works council.
Pregnant women and new mothers
During pregnancy and until the end of the 4 months after giving birth (or a miscarriage after the 12th week of pregnancy) there is general protection against dismissal. But only as long as the employer was informed of the pregnancy in good time.
Yet pregnant women and new mothers in the 4 months after giving birth are not completely protected from termination. If there is a fixed-term employment contract, pregnancy does not protect against the contract running out. In addition, extraordinary termination or termination without notice is possible if it is declared for conduct-related reasons and is entirely unrelated to the pregnancy.
Employees on parental leave
As soon as parents claim their entitlement to parental leave, special protection against dismissal applies to them as well. Under Section 18 (1) of the German Federal Parental Allowance and Parental Leave Act (Bundeselterngeld- und Elternzeitgesetz, BEEG) they cannot be given notice from the moment parental leave is requested (at most eight weeks before the parental leave) and during the parental leave. During this time it can only be lifted in special cases by a declaration of admissibility from the supreme state authority responsible for occupational safety, or from the bodies it appoints.
People with severe disabilities
Even though special protection against dismissal exists for people with severe disabilities and those treated as equivalent, they cannot be dismissed at will. To terminate the contract of a person with a severe disability, the employer needs the prior consent of the Integration Office (Integrationsamt). It examines whether the termination is connected to the disability or not. Termination is therefore often permissible, above all for works-council-related reasons.
Termination during illness
If employees fall ill, a distinction is made between long-term and short-term illness in the case of a possible termination.
Long-term illness
If an employee is ill for longer than six months and it is not foreseeable that their health will improve within 24 months, the Federal Labour Court assumes that operational interests are impaired so severely that the termination can be justified by the duration of the incapacity for work. In that case the employee can therefore be dismissed because of their illness.
Short-term illness
As long as the medical certificate and sick leave notification are submitted in good time, employees cannot be dismissed because of an illness. Nevertheless a termination can be carried through by means of an unfair dismissal claim. This protection against dismissal does not, however, apply during the 6-month probationary period. Yet during this period the representative body for severely disabled employees always has to be involved in a termination. If that is not done, the termination is invalid. If the employer was not informed of the severe disability, no special protection against dismissal applies either.
Protection from ordinary termination
Alongside special dismissal protection there is also protection from ordinary termination. This usually follows from the collective agreement. Employees who have reached a certain length of service or a certain age are protected against termination. This protection, however, only guards against ordinary termination.
In fixed-term employment relationships too, ordinary termination is not permitted by law as long as this rule is not lifted in the employment contract.
An “employee protected from termination” can, however, still give ordinary notice themselves. The protection applies exclusively to terminations by the employer.
Probationary period
If an employee is in their probationary period, the employer can terminate their contract with two weeks’ notice. This period cannot be shortened by the employment contract, only extended. A few principles do have to be observed when terminating during the probationary period, however:
- Termination on discriminatory grounds is not permitted (on the grounds of gender, sexual orientation, business or political activities, or religion).
- The employer may not give notice at an inopportune moment (when the employee is under particular strain).
- An employee may not be dismissed simply for exercising a statutory right.
During the probationary period no reason for the termination has to be given. That is also why there is no protection against dismissal because of illness. The ill employee can, however, as long as they remain ill, claim continued pay for two more weeks after the end of the notice period. Before falling ill they must have worked for the company for four uninterrupted weeks, though.
For pregnant women in the probationary period the German Maternity Protection Act applies, so they cannot be given ordinary notice.
What happens if the notice period is not observed?
The notice period does not only exist to protect the employee. It also exists to give the employer the chance to fill the position that is becoming vacant. If the employee wants to change employers because of an attractive job offer, the notice period has to be observed here too. Termination without notice because of a new offer is, after all, not possible.
If the notice period is not observed, this counts as a breach of the duty to work. As a result the employer does not have to keep paying the wage, for example. They can also claim additional damages for breach of contract. That applies if the employee’s sudden absence causes losses that cannot be made up by other employees stepping in, or that arise precisely because of that.
If the employer does not observe the statutory or contractually agreed notice period, or the protection against dismissal, the employee can bring a claim.
Vacation during the notice period – is that possible?
In principle, remaining vacation days can certainly be taken during the notice period. Because the remaining vacation has to be settled in some way, even if it cannot be granted in whole or in part. If it is possible, however, the employee also has to take it, so “simply having the vacation days paid out” is not possible.
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