Navigating Employee Termination in Germany: A Guide for International HR Professionals

Terminating employment contracts in Germany requires meticulous adherence to complex legal frameworks. For international companies, particularly those new to the German market, understanding these regulations is essential for maintaining compliance and protecting corporate reputation.

German Dismissal Protection Law: Core Principles

The German Dismissal Protection Act (Kündigungsschutzgesetz) applies to businesses with more than ten employees and staff members who have completed six months of service. Valid termination must fall under one of three categories:

Employee misconduct (e.g., violation of workplace policies)
Personal incapacity (e.g., sustained underperformance or health issues)
Operational requirements (e.g., restructuring or economic challenges)

Notice periods escalate with employee tenure according to the German Civil Code (BGB):

Employment Duration	Notice Period
Less than 6 months	2 weeks
6 months to 2 years	4 weeks
2 to 5 years	1 to 2 months
5 to 10 years	3 to 4 months
10+ years	5+ months

Pre-Termination Preparation

Proper documentation is critical before initiating termination. For performance-related dismissals, maintain detailed records including:

Performance improvement plans
Formal warnings and coaching sessions
Medical assessments where applicable

Companies with works councils must consult employee representatives before proceeding with termination. Failure to do so may invalidate the dismissal.

Termination Process Execution

The termination letter must include specific elements: employee details, clear termination rationale, effective date, and authorized signatures. Special considerations apply for protected groups:

Pregnant employees and those on parental leave require special approval
Severely disabled staff need integration office consent
Mass layoffs (20+ employees) mandate social compensation plans

Dispute Prevention Strategies

Consider mutual separation agreements (Aufhebungsvertrag) with appropriate severance packages. Standard compensation typically amounts to 0.5 monthly salaries per year of service. Maintain comprehensive documentation throughout the process to defend against potential labor court claims.

Case Study: Successful Termination Implementation

A technology firm recently navigated terminating a underperforming department head by:

Documenting three quarterly performance reviews
Providing two formal warnings with improvement timelines
Conducting works council consultations
Offering enhanced severance beyond legal requirements

The employee initially challenged the dismissal but withdrew claims after reviewing the thorough documentation. This case demonstrates how proper procedures prevent costly litigation.

Professional HR support services like SailGlobal can provide essential guidance through Germany's complex employment landscape, ensuring compliance while protecting organizational interests.

German Employee Termination Guide: Compliance for International Companies