Insights

Dismissals in Germany: why they are more expensive and slower than foreign employers expect

Dismissal protection, severance and the works council from an international employer perspective.

18 June 2026 | Reading time 4 min. | Author: Karina Malancea

Unlike in many countries, an employment relationship in Germany does not end at short notice and without a reason. Dismissal protection, notice periods and procedures determine the time and cost of a separation.

Dismissal protection: thresholds, deadlines, justification

The German Protection Against Unfair Dismissal Act (KSchG) applies in establishments that regularly employ more than ten employees, to employment relationships that have existed for more than six months. In that case, an ordinary dismissal is only valid if it is socially justified by reasons relating to the person or the conduct of the employee, or by urgent operational requirements. The statutory notice periods increase with length of service. The employee can bring an unfair dismissal claim within three weeks of receiving the dismissal.

Severance in practice and termination agreements

A legal entitlement to severance exists only in exceptional cases, but in practice severance is frequently paid to bring the litigation risk to an end. The rule of thumb of half a gross monthly salary per year of service serves as a reference point; the actual amount is a matter of negotiation and depends on the litigation risk. A termination agreement is often the quicker and more predictable route, but it requires care with regard to social security and a possible suspension period for unemployment benefit.

Works council and mass redundancies

Where a works council exists, it must be heard before every dismissal; if this is omitted, the dismissal is invalid. For larger headcount reductions, the mass redundancy notification under section 17 KSchG applies: above certain thresholds, the works council must be involved and the Federal Employment Agency must be notified before any dismissals are issued. Errors in this process regularly render the dismissals invalid.

Why this is unfamiliar for international employers

Unlike in at-will systems, where a separation is possible at any time and without stating reasons, German law requires justification, notice periods and procedures. For foreign employers this means that separations need lead time, documentation and a realistic budget. If these points are taken into account early, both the process and the budget remain predictable.

About the author

Karina Malancea

Employment Law Specialist

Get in touch

Karina Malancea advises employers on individual and collective employment law, from contract drafting and restructurings to the termination of employment relationships, including matters with an international dimension.

Curved arch of a modern bridge with steel cables against a blue sky

Planning to part ways with employees in Germany?

Maxfeld.legal provides legally sound support with dismissals, termination agreements and workforce reductions, including works council involvement and related proceedings.

Get in touch

Frequently Asked Questions on dismissals in Germany

When does dismissal protection apply?

In establishments that regularly employ more than ten employees and after more than six months of employment.

How high is severance typically?

A common rule of thumb is half a gross monthly salary per year of service. What is actually paid depends on the course of the negotiations and the litigation risk.

What is the deadline for an unfair dismissal claim?

Three weeks from receipt of the dismissal. If the deadline is missed, the dismissal is in principle deemed valid.

Does the works council have to be heard?

Yes. Without a proper hearing of the works council, the dismissal is invalid.

Is a termination agreement the better solution?

Often yes, because it is more predictable for both sides. The consequences for social security and a possible suspension period for unemployment benefit need to be considered.

Dismissals in Germany: why they are more expensive and slower than foreign employers expect

Dismissal protection: thresholds, deadlines, justification

Severance in practice and termination agreements

Works council and mass redundancies

Why this is unfamiliar for international employers

About the author

Planning to part ways with employees in Germany?

Frequently Asked Questions on dismissals in Germany

More articles on this topic

Get in touch

Maxfeld.legal

Request brochure