Employment Protection (Kündigungsschutz) in Germany: A Comprehensive Guide for Expats
Germany has one of the strongest employment protection systems in the world. While many expats are aware that “you can’t just get fired” in Germany, few understand the specific legal mechanisms, deadlines, and protections that apply. The Kündigungsschutzgesetz (KSchG) – the German Employment Protection Act – sets strict rules that employers must follow when terminating employment. Failure to comply often results in reinstatement rights or severance payments for the employee.
Below you will find an extensive, practical explanation of how Kündigungsschutz works, who it protects, how terminations must be justified, and what expat employees should do if they receive a termination notice.
1. Who is protected under the Kündigungsschutzgesetz (KSchG)?
Employment protection applies only if both conditions are met:
(a) Company size requirement
The employer must have:
- More than 10 full-time employees (excluding certain apprentices)
Part-time workers count fractionally:
- 20 hours/week = 0.5 employee
- 30 hours/week = 0.75 employee
Small businesses (“Kleinbetriebe”) with 10 or fewer employees are subject to less strict rules, but still must act in good faith.
(b) Six-month waiting period
The employee must have completed:
- More than 6 months (“Wartezeit”) of employment
During the first six months, employers may terminate more easily – but still must avoid discrimination and other unlawful grounds.
2. What are the valid reasons for termination under German law?
Under Kündigungsschutz rules, an employer may only terminate employment if there is a socially justified reason in one of three categories:
(a) Behavioral reasons (verhaltensbedingte Kündigung)
Examples:
- Repeated misconduct
- Violations of company rules
- Chronic lateness
- Refusal to follow instructions
Important: In many cases, a formal warning (Abmahnung) is usually required before termination.
(b) Personal reasons (personenbedingte Kündigung)
These are reasons beyond the employee’s control, such as:
- Long-term illness
- Loss of required work permits or driver’s license
- Physical or mental inability to perform duties
Personal terminations require:
- Documentation
- Long-term negative prognosis
- Examination of alternative job placements
(c) Operational reasons (betriebsbedingte Kündigung)
Terminations due to:
- Business closures
- Restructuring
- Elimination of jobs
- Financial downturns
- Outsourcing
Employers must conduct a social selection process (Sozialauswahl) based on:
- Length of service
- Age
- Maintenance obligations
- Disability status
If the employer selects the “wrong” employee, the termination may be invalid.
3. What is socially justified dismissal?
A termination is socially justified only if:
- The employer has a serious, concrete, provable reason,
- The termination is necessary,
- The employer has no milder alternative,
- The employee was selected correctly (in case of layoffs), and
- All procedural and formal requirements were followed.
Most terminations fail on at least one of these points – which is why employees often win lawsuits or settlements.
4. How does the three-week deadline work?
This is one of the most critical rules for expats.
Employees have only 3 weeks to file a lawsuit:
- Deadline: 21 calendar days from receipt of the termination notice
- If this deadline is missed:
→ The termination becomes legally valid, even if it was unlawful
→ No severance, no reinstatement, no negotiations
Exceptions
Only extremely rare circumstances allow late filings:
- Hospitalization
- Mental incapacity
- Incarceration
Ignoring the deadline or “thinking about it” too long is fatal to the case.
5. What documents must the employer provide?
Upon termination, employees are entitled to receive:
- The termination letter (hard copy, original signature required)
- Written proof of proper notice period
- Unemployment notice for the Arbeitsagentur
- A corrected salary statement after the end of employment
- A job reference (Arbeitszeugnis) – upon request
- Remaining vacation payout documentation
All must be provided within reasonable time, but not necessarily together with the termination letter.
6. Are pregnant employees protected?
Yes. Germany provides special termination protection for:
- Pregnant employees
- Employees on maternity leave
- Employees within 4 months after childbirth
Termination is strictly prohibited unless the employer receives explicit permission from the government authority (extremely rare).
Failing to disclose pregnancy immediately can weaken employee rights – but the protection still applies even if the employer did not yet know.
7. What about small companies under 10 employees?
In small businesses:
- The full Kündigungsschutzgesetz does not apply
- Employers may terminate more easily
- Social justification is not required to the same extent
But employees still have protection against:
- Discrimination
- Retaliation
- Arbitrary or malicious terminations
- Violations of notice periods
- Violations of special protections (pregnancy, disabilities, works council)
Even in small companies, unfair terminations can still be challenged.
8. Can I be fired during sick leave?
Yes – contrary to common belief, sick leave does not automatically prevent termination.
However:
- Terminations because you are sick are more difficult
- Long-term illness terminations require strong evidence
- You are still entitled to full protection under KSchG
- Employers may not retaliate for lawful sick leave
Important: Sick employees still must meet the 3-week deadline to contest the termination.
9. What happens after filing a wrongful termination claim?
Once a lawsuit is filed:
- The court schedules a conciliation hearing (Gütetermin) that usually takes place within 3-6 weeks
- Employer and employee present initial arguments
- Judges often encourage settlements
- If no settlement is reached, the case moves to a main hearing (Kammertermin)
Most cases end with:
- A severance payment
- A clean job reference
- Extended employment duration for pension purposes
- Waiving of negative allegations
- Agreement on formal termination date
Reinstatement is possible but less common (except for discriminatory dismissals).
10. Is reinstatement realistic?
Reinstatement is technically the preferred legal remedy – but in practice:
- Courts encourage settlements
- Employees often prefer severance + new job
- Employers rarely want reinstated employees after litigation
Reinstatement is more likely when:
- Termination was discriminatory
- Retaliation occurred
- Works council protections were violated
- Special protected groups were targeted (pregnant employees, disabled employees)
Otherwise, severance is the typical outcome.
Further questions?
Do you have any further questions regarding employment law in Germany? Would you like to have another aspect covered in this article? Or do you have any other legal subject that troubles you in Germany? Then drop us an email.
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