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Germany
 


Source and scope of regulations - 2017    

References
NOTE: This information has changed since the previous period covered.
  • Protection against Dismissal Act [PADA], 1969, as last amended in July 2017
    (Kündigungsschutzgesetz - available in German only)
    Date: 21 Jul 2017; view website » (view in NATLEX »)
  • Civil Code [CC], art. 611-630, 2002 (new version), as subsequently amended
    (Bürgerliches Gesetzbuch)
    Date: 20 Jul 2017; view website » (view in NATLEX »)
  • Works Constitution Act [WCA], 2001 as amended up until July 2017
    (Betriebsverfassungsgesetz)
    Date: 17 Jul 2017; view website »
Scope
Size of enterprises excluded (≤): 10
Remarks:
  • As a result of a reform, since 31 December 2003, the PADA which is the main Act on dismissals only applies to employees in enterprises with more than 10 employees. However, those employees hired before 31 January 2004, in enterprises with more than 5 workers, keep their statutory protection (sec. 23 PADA).

    The Works Constitution Act provides for the mandatory establishment of a works council (which intervenes in the dismissal procedure) in enterprises with 5 or more employees (sec. 1 WCA).

    Lastly, enterprises with less than 20 employees are exempt from the requirements pertaining to collective dismissals (sec. 17 PADA).

Workers' categories excluded: civil/public servants; army; managerial / executive positions; seafarers
Remarks:
  • See sec. 23 PADA: it is understood that the law is applicable to employees working in public administration.
    - Dismissal of civil servants and members of the armed forces are regulated by special acts (Bundesbeamtebgesetz and Soldatengesetz).
    The provisions of the PADA on collective dismissals do not apply to sea going vessels and their crew (sec. 23 (2) PADA)
    Executives and managers are not excluded but enjoy a limited degree of protection against dismissal. (sec. 14 PADA).

Types of employment contracts - 2017    

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Maximum probationary (trial) period: 6 month(s)

Remarks:
  • Sec. 622 (3) CC

Fixed term contract (FTC):
  • Valid reasons for FTC use: objective and material reasons
    Remarks:
    • Sec. 14 (1) Part-Time and Fixed-Term Employment Act (2011) [PTFTEA].
      However, objective and material reasons are not required for the conclusion of a contract for a term not exceeding 2 years. Within this time frame, the contract can be renewed 3 times (sec. 14 (2) PTFTEA). For newly founded enterprises, this time limit is up to 4 years.
      Similarly, no justification is required for the conclusion of fixed-term contracts with employees over 52 years old.
  • Maximum number of successive FTCs: 4
    Remarks:
    • The extent of limitation in the number of successive depends on whether or not there is an objective reason for resorting to FTC:
      * If there is an objective reason for each successive contract, it can be renewed without any limitation.
      * FTC concluded without any justified reason are subject to a limitation of maximum 4 successive provided that the total duration does not exceed 2 years (sec. 14, 2 PTFTEA).
  • Maximum cumulative duration of successive FTCs: 24 month(s)
    Remarks:
    • The extent of limitation on the maximum cumulative duration depends on whether or not there is an objective reason for resorting to FTC:
      * If there is an objective reasons for each successive contract, there is no limitation for renewing such FTC.
      * FTC concluded without any justified reason are subject to a limitation of maximum 4 successive provided that the total duration does not exceed 2 years (sec. 14, 2 PTFTEA).
      For newly founded enterprises, this time limit is up to 4 years.
  • % of workforce under FTC: 13.2 %
    Remarks:
    • Source: Eurostat, as of second semester 2016.
      The figure refers to the percentage of employee with a contract of limited duration (= temporary job) of total number of employee aged 15-74 years.
      Eurostat data are based on the following definition:
      "A job may be considered temporary if employer and employee agree that its end is determined by objective conditions such as a specific date, the completion of a task or the return of another employee who has been temporarily replaced (usually stated in a work contract of limited duration). Typical cases are: (a) persons with seasonal employment; (b) persons engaged by an agency or employment exchange and hired to a third party to perform a specific task (unless there is a written work contract of unlimited duration); (c) persons with specific training contracts."

Substantive requirements for dismissals (justified and prohibited grounds) - 2017    

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Obligation to provide reasons to the employee: Yes
Remarks:
  • Sec. 1 PADA


Valid grounds (justified dismissal): any fair reasons
Remarks:
  • Sec. 1 (2) PADA:
    Dismissal shall be socially justified by reasons relating to the employee's person or conduct or compelling operational requirements.


Prohibited grounds: pregnancy; maternity leave; filing a complaint against the employer; race; colour; sex; sexual orientation; religion; social origin; nationality/national origin; age; trade union membership and activities; disabilities; ethnic origin
Remarks:
  • The General Equal Treatment Act (2006, as amended in 2013) prohibits discrimination (including with respect of termination of employment) on the basis of race, ethnic origin, gender, sexual identity, religion, disability and age: sec. 1 and 2 (1) 2).
    Prohibition of dismissal during pregnancy and maternity leave: sec. 17 Maternity Protection Act (as amended in May 2017).
    Sec. 75 WCA obligation of the employer and the works council to ensure that the employees do not suffer any discrimination on the ground of race, creed, nationality, origin, political or trade union activity or convictions, gender or sexual identity.
    Sec. 612a CC prohibition to discriminate on the basis of the lawful exercise of his rights by the employee.


Workers enjoying special protection: workers' representatives; pregnant women and/or women on maternity leave; workers with family responsibilities; workers with disabilities
Remarks:
  • - Pregnant women : sec. 17 Federal Act on Maternity Protection (2002, as amended in May 2017): prohibition of dismissal during pregnancy and up to 4 months after childbirth).
    - Maternity /parental leave: sec. 18 of the Federal Parenting Benefits and Parental Leave Act (2007, as amended in May 2017)
    - Disabled workers: sec. 85 Social Code, book IX: or consent of the integration office required.
    - Worker's representatives: sec. 15 PADA.
    Prohibition of dismissal except in case of serious misconduct (good cause).


Procedural requirements for individual dismissals - 2017    

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Notification to the worker to be dismissed: written

Remarks:
  • Sec. 623 CC

Notice period:
Remarks:
  • Sec. 622 CC (applicable, unlike the PADA, to all cases of ordinary dismissals notwithstanding the size of the undertaking).
    The notice period should be at least 4 weeks and increases according to the length of service as follows:
    * 1 month, for at least 2 years of service;
    * 2 months, for at least 5 years of service;
    * 3 months, for at least 8 years of service;
    * 4 months, for at least 10 years of service;
    * 5 months, for at least 12 years of service;
    * 6 months, for at least 15 years of service;
    * 7 months, for at least 20 years of service.

    (Note: during the probationary period (maximum 6 months), the notice period should be 2 weeks).
    • tenure ≥ 6 months
      • 4 week(s).
    • tenure ≥ 9 months
      • 4 week(s).
    • tenure ≥ 2 years
      • 1 month(s).
    • tenure ≥ 4 years
      • 1 month(s).
    • tenure ≥ 5 years
      • 2 month(s).
    • tenure ≥ 10 years
      • 4 month(s).
    • tenure ≥ 20 years
      • 7 month(s).

    Pay in lieu of notice: No

    Notification to the public administration: No

    Remarks:
    • Except for pregnant women, employees on parental leave or disabled employees.

    Notification to workers' representatives: Yes

    Remarks:
    • Sec. 102 Works Constitution Act: the works council must be consulted before every dismissal and can, on the basis of legally specified grounds, object to a dismissal.
      However, the validity of the dismissal does not depend on the council's approval. As a consequence of the council's objection and if the employee has challenged the dismissal before the labour court, he will be entitled to continuation of employment during the pending procedure.

    Approval by public administration or judicial bodies: No

    Remarks:
    • Except for pregnant women, employees on parental leave or disabled employees.

    Approval by workers' representatives: No

    Remarks:
    • Sec. 102 Works Constitution Act: the works council must be consulted before every dismissal and can, on the basis of legally specified grounds, object to a dismissal.
      However, the validity of the dismissal does not depend on the council's approval. As a consequence of the council's objection and if the employee has challenged the dismissal before the labour court, he will be entitled to continuation of employment during the pending procedure.

    Procedural requirements for collective dismissals for economic reasons (redundancy, retrenchment) - 2017    

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    Definition of collective dismissal (number of employees concerned):
    Within a period of 30 days:
    1) more than 5 employees in undertakings with 21 to 59 employees;
    2) 10% or more than 25 employees in undertakings with 60 to 499 employees;
    3) at least 30 employees in undertakings with at least 500 employees.

    Remarks:
    • Sec. 17 PADA

    Prior consultations with trade unions (workers' representatives): Yes

    Remarks:
    • Sec. 17 (2) PADA

    Notification to the public administration: Yes

    Remarks:
    • Sec. 17 (1) PADA

    Notification to workers' representatives: Yes

    Remarks:
    • Sec. 17(2) PADA

    Approval by public administration or judicial bodies: No

    Approval by workers' representatives: No

    Priority rules for collective dismissals (social considerations, age, job tenure): Yes

    Remarks:
    • Sec. 1(3) PADA: mandatory social selection on the basis of length of service, age, family responsibilities, severe disability.
      Note that this requirement applies to all dismissals based on urgent operational requirement notwithstanding the number of employees concerned (subject to the limitation on the scope of application of the PADA).

    Employer's obligation to consider alternatives to dismissal (transfers, retraining...): Yes

    Remarks:
    • Sec. 1 (2) 1: General obligation on the part of the employer to try to avoid dismissal, by offering the employee another position (applicable also to individual economic dismissal).
      See also sec. 17(2) PADA: Alternatives to redundancies and ways to mitigate the effect are to be discussed in the framework of the consultation process between the employer and the works council.

      (Note: In undertakings with more than 20 employees, the works council can request a social plan to mitigate the effects of redundancy)

    Priority rules for re-employment: No

    Severance pay and redundancy payment - 2017    

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    Redundancy payment:
    Remarks:
    • Sec. 1a PADA: an employee dismissed on the basis of urgent operational requirement is entitled to severance pay, the amount of which equal 0.5 months' pay for each year of employment, provided he has not challenged the dismissal within 3 weeks following the notice of termination.

      (According to sec. 1a (2) PADA, for the purpose of calculating the length of service in relation to severance pay, a period of more than 6 months should be counted as 1 year)
    • tenure ≥ 6 months: 0.5 month(s)
    • tenure ≥ 9 months: 0.5 month(s)
    • tenure ≥ 1 year: 0.5 month(s)
    • tenure ≥ 2 years: 1 month(s)
    • tenure ≥ 4 years: 2 month(s)
    • tenure ≥ 5 years: 2.5 month(s)
    • tenure ≥ 10 years: 5 month(s)
    • tenure ≥ 20 years: 10 month(s)

    Notes / Remarks
    1) Individual dismissals based on the worker's conduct or capacity: no severance pay.
    2) Economic (individual or collective) dismissals: redundancy payment.

    Avenues for redress (penalties, remedies) and litigation procedure for individual complaints - 2017    

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    Compensation for unfair dismissal - free determination by court: No

    Remarks:
    • Sec. 10 PADA

    Compensation for unfair dismissal - Legal limits (ceiling in months or calculation method):
    Compensation shall not exceed 12 months' wages.
    2 exceptions:
    - up to 15 month's wages for workers aged over 50 and with at least 15 years of service,
    - up to 18 months for workers aged over 55 and with at least 20 years of service

    Remarks:
    • Sec. 10 PADA

    Reinstatement available: Yes

    Remarks:
    • If the Court finds that the dismissal lacks social justification, it will declare it void and therefore the employment relationship continues. However, it can be dissolved upon request of either party when continuation of employment is no longer tolerable. In such cases, the Court will award compensation (sec. 9 PADA).

    Preliminary mandatory conciliation: Yes

    Remarks:
    • Sec. 54 (1) PADA: preliminary conciliation before the Labour Court should take place within two weeks after the application has been filed.

    Competent court(s) / tribunal(s): labour court

    Remarks:
    • Sec. 4 PADA and sec. 2 of the Federal Labour Court Act , 1953 (as last amended in 2013).

    Existing arbitration: No

    Length of procedure: 2.6 month(s)

    Remarks:
    • Figures for 2016: they correspond to the average total length of procedure before the States (Länder) Labour Courts (first instance) for dismissal cases in Germany.
      The average duration of appeal proceedings is 6.5 months

      Source:
      Statistiches Bundesamt, destatis (Federal Statistic Office), Rechtspflege - Arbeitsgerichte 2016, Fachserie 10 Reihe 2.8, 2017, p. 47 and 89.

    % of dismissals out of the total number of disputes: 53.1 %

    Remarks:
    • Figure for 2016 = % of dismissal cases out of all labour disputes in Germany (States Labour Courts).

      Source:
      Statistiches Bundesamt, destatis (Federal Statistic Office), Rechtspflege - Arbeitsgerichte 2016, Fachserie 10 Reihe 2.8, 2017 p. 45 and 47. Link provided below under "scope of additional information".

    Source of additional information - 2017    

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    Links

    , published in 2014, Rechtspflege – Arbeitsgerichte 2013, Fachserie 10, Reihe 2.8, 2014 »
    Available in German only.