Germany Employment Guide

Germany is in central Europe, bordering Poland, the Czech Republic (east), Austria, Switzerland (south), France, Luxembourg, Belgium, the Netherlands (west). It has ~83 million people; German is official, and Berlin is the capital. As Europe’s largest economy, it’s highly developed, leading globally in industry, manufacturing, auto, chemicals and mechanical engineering, with a key service sector. Its sound labor laws (per Arbeitsgesetzbuch) protect wages, hours, leave and social security. Standard workweek: 40 hours (overtime needs extra pay or time off). Salaries are usually monthly (avg. €3,800 pre-tax). Laws cover paid leave, encourage flexible work and employee participation in corporate decisions, balancing interests for a fair, stable labor market.

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Currency

Euro (EUR, €)

Capital

Berlin

Official language

German

Salary Cycle

Monthly

Our Employment Guide in Germany

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Navigating Employment Termination in Germany: A Professional Guide

Terminating employment relationships in Germany requires careful adherence to complex legal frameworks and country-specific regulations. The separation process must be managed collaboratively between employers and key stakeholders, often involving transitional costs and mandatory procedural steps depending on the termination circumstances.

Legal Grounds for Termination

German employment law provides limited grounds for lawful termination beyond probationary periods. Employers cannot terminate employment arbitrarily and must demonstrate valid justification. Acceptable termination scenarios include:

Voluntary resignation by the employee
Mutual separation agreements
Employer-initiated termination based on:
- Probationary period provisions
- Behavior-related causes (violation of employment terms)
- Personal circumstances (loss of required qualifications)
- Operational requirements (strictly limited applications)
Contract expiration

Statutory Notice Periods

Minimum notice periods in Germany follow a graduated scale based on employment duration. The standard framework requires:

Employment Duration	Notice Period
Up to 2 years	4 weeks to 15th or end of calendar month
2-4 years	1 month to end of calendar month
5-7 years	2 months to end of calendar month
8-9 years	3 months to end of calendar month
10-11 years	4 months to end of calendar month
12-14 years	5 months to end of calendar month
15-19 years	6 months to end of calendar month
20+ years	7 months to end of calendar month

Parties may contractually agree to a 2-month notice period, but this extends to 3 months for employees with over 7 years of service.

Severance Considerations

While German law doesn't mandate statutory severance payments, established best practices recommend providing severance after six months of employment to mitigate litigation risks. SailGlobal incorporates severance accruals into all German employment agreements, drawing from extensive global experience in managing termination-related legal exposure. Their calculation methodology considers prevailing legal standards and local practices, with unused amounts refunded when employees resign or aren't entitled to severance.

Practical Implementation Examples

Consider a technology firm restructuring its German operations: proper termination procedures prevented potential wrongful dismissal claims exceeding €500,000. Another manufacturing company successfully navigated collective redundancy requirements by following statutory consultation processes, demonstrating how proactive compliance minimizes financial exposure.

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