Ordinary termination: reasons, notice periods, and special benefits for 2024
In many employment relationships, a separation occurs at some point. This may be because the needs of the employee or employer have changed, or because the working relationship has proven to be unsatisfactory. In such cases, it is important that the separation is handled properly and fairly in order to avoid any negative consequences.
In this article, we will therefore address the topic of ordinary termination and answer questions such as "What is ordinary termination?" and "What rights do employees have in the event of ordinary termination?"
What is ordinary termination?
Ordinary termination takes place within the statutory or contractual notice periods. It can be initiated by either the employer or the employee and must comply with the notice periods specified in the employment contract, collective agreement, or law.
Termination within the prescribed period means that the termination takes place within the prescribed notice periods. It can also be initiated by the employer or employee and must comply with the agreed notice periods.
It is crucial that a termination is both proper and timely, as otherwise there is a risk that it will be challenged in court and thus invalidated. Therefore, care should be taken when drafting a termination to ensure that all relevant information is included and that the notice periods are observed.
What does proper and timely termination mean?
Ordinary termination is termination that takes place within the statutory or contractual notice periods. It can be initiated by the employer or the employee and must comply with certain notice periods specified in the employment contract, collective agreement, or law.
A timely termination is a termination that takes place within the statutory or contractual notice periods. It can be issued by the employer or the employee and must comply with the agreed notice periods.
It is important that a termination is both proper and timely, as otherwise there is a risk that it will be challenged in court and thus not be legally valid. Therefore, you should take care when drafting a termination letter and ensure that it contains all relevant information and that the notice periods are observed.
What is the termination process?
The termination process for ordinary termination is usually as follows:
- The employer shall inform the employee of the termination in writing and with a signature. The termination should include the reasons for the termination and refer to the applicable notice periods.
- The employee has the right to contest the termination and may lodge a written objection within three weeks of receiving notice of termination.
- The employer reviews the objection and decides whether to uphold or withdraw the termination.
- If the employer upholds the termination, the employee has the option of filing a lawsuit with the competent labor court within three weeks.
- If the employee does not lodge an objection or file a lawsuit, the termination is deemed effective and the employment relationship ends at the agreed time.
What reasons can lead to ordinary termination?
Ordinary termination is termination based on reasons related to the employee or the employment relationship. In contrast, there is extraordinary termination, which is based on reasons related to the employer or the operational circumstances.
Ordinary termination is only permissible if it is objectively justified. This means that the employer must have a valid reason for the termination. The reasons that may apply are regulated in the Termination Protection Act (KSchG).
The most common reasons for ordinary termination are:
- Staffing requirements: The employer is not obliged to continue employing the employee if they wish to terminate the employment relationship for operational reasons. These include, for example, saving on personnel costs, relocating jobs, or introducing new technologies.
- Unreasonable burden: If the employee's behavior places a heavy burden on the company or grossly violates his or her duties, the employer may terminate the employment relationship. Examples of this include theft, fraud, or violence in the workplace.
- Persistent poor performance: If an employee consistently fails to perform their job properly over a longer period of time, this may lead to dismissal. However, the employer must first issue a warning and give the employee the opportunity to improve.
- Serious misconduct: Termination may also be declared if the employee has committed serious misconduct that seriously damages the relationship of trust between employer and employee. Examples of this include bullying or sexual harassment.
It is important to note that proper termination must always be in writing and addressed to the correct person. As a rule, it must be addressed to the employee themselves, but in some cases also to the works council. Furthermore, the termination should always be clearly and comprehensibly worded and clearly state the reasons for the termination.
Employees who have received notice of termination have the right to contest the termination and, if necessary, file an action for unfair dismissal. They are also entitled to severance pay if they have been employed for a long period of time and there are social hardship considerations.
There are also alternatives to dismissal, such as a transfer or a reduction in working hours. In such cases, employees should always ensure that their rights are protected.
What are the deadlines for ordinary termination?
The notice periods for ordinary termination depend on whether the termination is initiated by the employer or the employee and how long the employment contract has been in place. Here is an overview:
Employer:
- Until the end of a probationary period: 1 week
- After the probationary period: 4 weeks to the 15th or to the end of a calendar month
- After 5 years of service: 6 weeks on the 15th or at the end of a calendar month
Employees:
- Until the end of a probationary period: 2 weeks
- After the probationary period: 4 weeks to the 15th or to the end of a calendar month
- After 5 years of service: 8 weeks on the 15th or at the end of a calendar month
However, there are exceptions to these deadlines, for example in the case of serious reasons or plant closures.
Notice period & length of service
According to Section 622 of the German Civil Code (BGB), the notice period for employers and employees is extended by one week for each additional year of service after two years of employment, up to a maximum extension of five weeks. This means that the notice period for employers and employees is extended as follows after two years of employment:
Die Kündigungsfristen gelten jeweils zum Ende eines Kalendermonats oder zum 15. eines Monats.
Are there exceptions to the standard notice period, and in which cases are they possible?
There are exceptions to the standard notice period that are permissible in certain cases. One such exception is known as "short-time work termination," whereby the employer can only temporarily employ the employee less or not at all due to economic difficulties. However, short-time work termination is only permissible if the employer complies with the provisions of the Employment Promotion Act on short-time work.
Another exception is "termination for operational reasons," which is possible in the event of an operational restriction or change in operations. This includes, for example, the closure of the business, the cessation of production, or the relocation of jobs. In this case, too, the employer must observe certain regulations; in particular, they must inform and involve the works council.
However, it is important to note that exceptions to the regular notice period are interpreted very restrictively and are therefore only permissible in rare cases. In the past, for example, there have been court rulings stating that termination due to short-time work was only permissible if the employer had demonstrated concrete prospects for the resumption of work. Employees who have received such a termination should therefore always have their rights reviewed and, if necessary, seek legal advice.
How should a termination be worded to be legally valid?
A termination should generally be made in writing and contain certain important information in order to be legally valid. Here is an overview of the most important points that should be included in a termination:
- Personal data: Name and address of the employer and employee, as well as the date on which the termination was drafted.
- Subject: The termination should be clearly recognizable as such, e.g., by using the subject line "Termination" or "Termination of employment."
- Reason for termination: It must be specified whether this is an ordinary or extraordinary termination. In the case of ordinary termination, the reason for termination must be specified, e.g., "termination for operational reasons" or "termination for personal reasons."
- Notice period: The notice period specified in the employment contract, collective agreement, or law must be observed.
- Signature: The termination must be signed by both the employer and the employee.
It is advisable to always have a termination reviewed by a lawyer or other qualified person to ensure that it is legally valid.
Some important paragraphs relating to dismissals are:
- Section 622 of the German Civil Code (BGB): This section regulates the ordinary termination of employment.
- Section 626 BGB: This section regulates the extraordinary termination of the employment relationship.
- Section 622 BGB: This section regulates notice periods in labor law.
- Section 630 BGB: This section regulates the invalidity of terminations, e.g., in cases of discrimination or failure to observe the notice period.
- Section 615 BGB: This section regulates the notice of termination and its effectiveness.
It is important to take care when drafting a termination letter to ensure that it is legally valid. This includes ensuring that all relevant information is included and that the notice periods are observed. A poorly worded termination letter can lead to legal problems and result in it being challenged in court. It is therefore advisable to seek advice from a lawyer or other qualified person to ensure that the termination letter is legally valid and contains all the necessary information.
Sample of a proper termination
A legally valid termination must meet certain requirements and contain certain information to ensure that it will hold up in court. Below, we provide a sample of a legally valid ordinary termination from the employer's perspective, which you can use as a template for your own termination:
Dear [name of employee],
We hereby terminate the employment relationship between you and us with due notice as of [date].
The reason for termination is [reason for termination, e.g. "termination for operational reasons" or "termination for personal reasons"].
The notice period is [number of weeks/months] in accordance with [employment contract/collective agreement/law].
Please confirm receipt of this notice in writing and the date on which your employment will end.
Yours sincerely
[Name of employer]
[Signature of the employer]
What rights do employees have in the event of ordinary termination, and how can they defend themselves against it?
In the event of ordinary termination, employees have the right to defend themselves against the termination and to contest it. They can defend themselves by filing a lawsuit with a labor court and asserting the invalidity of the termination.
There are various reasons why a regular termination may be invalid. For example, a termination may be invalid if it is based on discrimination on the grounds of gender, race, religion, or national origin. A termination that is issued during pregnancy or after an illness may also be considered invalid.
In the past, there have been numerous court rulings dealing with the issue of dismissals. Here are a few examples:
- In the case "AK v. X GmbH" (Frankfurt/Main Labor Court, judgment of July 21, 2016, Ref.: 15 Ca 6097/15), it was ruled that a termination is invalid if it is issued during pregnancy.
- In the case of "B v. Y AG" (Munich Regional Labor Court, judgment of February 25, 2015, Ref.: 5 Sa 565/14), it was ruled that a termination based on prejudice against certain population groups can be considered invalid.
- In the case of "C v. Z GmbH" (Düsseldorf Labor Court, judgment of July 12, 2017, Ref.: 14 Ca 1801/17), it was ruled that a termination is invalid if it was issued during an illness and the employee was unable to perform their work at the time of termination.
- In the case of "D v. A GmbH" (Hamburg Labor Court, judgment of March 17, 2015, Ref.: 4 Ca 96/14), it was ruled that a termination is invalid if it is based on a violation of the Equal Treatment Act.
- In the case of "E v. B GmbH" (LAG Berlin-Brandenburg, judgment of September 22, 2017, Ref.: 8 Sa 127/17), it was decided that a termination is invalid if it was pronounced due to a violation of the transparency requirement.
- In the case of "F v. C AG" (Munich Labor Court, judgment of June 15, 2018, Ref.: 12 Ca 1770/17), it was ruled that a termination is invalid if it was issued during parental leave.
What about special payments, such as vacation pay or Christmas bonuses, in the event of ordinary termination?
In the event of ordinary termination, the employee is generally entitled to all special benefits agreed in the employment contract or collective agreement. These include, for example, vacation and Christmas bonuses, overtime pay, gratuities, and other special payments.
However, there are some exceptions where the employee is not entitled to special benefits. These include, for example, if the employee resigns or is dismissed during the notice period and has already terminated their employment before the end of the notice period. In such cases, the employee is not entitled to special benefits paid for the period after the end of the employment relationship.
However, there are also cases in which the employee is entitled to special benefits despite termination. This may be the case, for example, if the employer has terminated the employment relationship without notice or if the termination is invalid due to discrimination or another unlawful reason. In such cases, the employment relationship remains in place until the end of the notice period and the employee continues to be entitled to all special benefits agreed in the employment contract or collective agreement.
However, it is important to note that entitlement to special benefits always depends on the respective conditions in the employment contract or collective agreement. Therefore, employees should always check whether and under what conditions they are entitled to special benefits.
You can find a more detailed article on vacation entitlement in the event of termination here.
What is the best way to proceed with a termination in order to mitigate any negative consequences?
When giving notice, there are a few things to keep in mind in order to mitigate any potential negative consequences:
- Find out in advance about your rights and obligations. These include notice periods and entitlement to unemployment benefits or severance pay.
- Avoid accusations and discuss the termination in a factual and respectful manner.
- Offer to continue working during the transition period or to help with the search for a new job.
- Try to agree on a fair severance payment with your employer.
- Take the opportunity to discuss the job reference and make sure that it is written in a factual and truthful manner.
- Start looking for a new job early and make use of the network and support offered by the employment agency or other job placement services.
What to do if you have been dismissed?
If you have been dismissed by your employer, you should immediately contact an expert in labor law. If you are a member of a union, you can apply for legal protection and speak to a union representative. Otherwise, it is advisable to contact a specialist lawyer for labor law. You can find the right lawyer using our "Find a Lawyer" guide. The lawyer can also check whether your legal protection insurance includes employment law protection and will cover the costs.
It is important to act quickly, as you must decide within three weeks of receiving the termination whether you wish to file an action for unfair dismissal.
If you decide to take legal action and the labor court later declares the termination invalid, this means that your employment relationship continues uninterrupted. You can then claim your full salary or part of it for the period between the end of the notice period and the labor court's ruling, even though you did not work during this time.
In this case, your employer is in default of acceptance (Section 615 of the German Civil Code (BGB)) and must continue to pay your salary even if you have not worked (Federal Labor Court (BAG), judgment of May 16, 2012, Ref. 5 AZ 5 AZR 251/11).
Permanent employees
Permanent employees are employees who cannot be dismissed by their employer due to certain regulations. In the public sector, for example, there are civil servants who cannot be dismissed in accordance with Section 34 (2). These include judges, public prosecutors, and soldiers. These employees can only be dismissed in special cases, such as incapacity for work or serious breaches of duty. Other regulations apply to other employees in the public sector, which are laid down in the relevant laws and collective agreements.
What is the difference between ordinary termination and extraordinary termination?
Ordinary termination and extraordinary termination differ primarily in terms of their reasons:
- Ordinary termination is termination based on reasons attributable to the employee or the circumstances of the employment relationship. Examples include poor performance, tardiness, or disciplinary violations.
- Extraordinary termination is termination for reasons related to the employer or the working conditions. Examples include serious breaches of duty by the employer, such as non-payment of wages or salaries, or unreasonable impairment of the employment relationship through bullying or sexual harassment.
Another important distinction is the notice period:
- Ordinary termination is subject to specific notice periods, which are stipulated in the employment contract or collective agreement. As a rule, the notice period is four weeks to the end of the month for a standard weekly working time of more than 15 hours and two weeks to the end of the month for a standard weekly working time of 15 hours or less.
- Extraordinary termination is independent of notice periods and can be declared at any time, provided it is objectively justified.
You can find more information on extraordinary termination here. https://beglaubigt.de/blog/ausserordentliche-kuendigung
Here are five final tips for proper termination from the employer's perspective:
- Find out in advance about the applicable notice periods and reasons for termination and make sure that you comply with them.
- Before terminating the employment relationship, hold discussions with the employee concerned and try to find a solution.
- Make sure you submit the termination in writing and signed, and keep a copy for the employee and for your records.
- Avoid accusations and discuss the termination in a factual and respectful manner.
- Offer the employee the opportunity to continue working during the transition period or assist them in finding a new job.
