What you should know about employing people in...Germany
Contract Termination notices have to be in writing.
1. Termination of the employmentEmployers have to give between one and seven months notice, depending on the duration of the employee’s employment with the company. Statutory notice periods may be extended in the employment contract provided the notice period for the employee is not longer than the one for the employer. The contract can also shorten the statutory notice period for the employee. A shorter period is also possible for the employer, if agreed by collective agreement.
2. No protection against unfair dismissal in small business unitsIn small businesses with no more than five/ten employees the employer can usually terminate employment at will, as long as employers observe the statutory or contractual notice periods. However, dismissals must not constitute discrimination and under very select circumstances, for instance pregnancy, parental leave or severe disability, special dismissal protection applies.
3. Protection against unfair dismissal in bigger business unitsOnce a business has more than five/ten employees employed on a regular basis, an employment contract can only be terminated if the conditions of the Federal Dismissal Protection Act (Kündigungsschutzgesetz -KSchG-) are met. The dismissal protection statute practically complicates dismissals. An unjustified termination is null and void, if a dismissal protection action is filed within three weeks. Where the employees’ claim is successful the court will not only order the continuance of the employment but also payment of back wages.
4. Accepted reasons giving noticeAccording to the law, employers may only terminate employment if they are able to justify this by one of the three following principal reasons (Article 1 KSchG): dismissals on grounds of personal incapability or health problems, dismissals as a consequence of bad conduct, and redundancies, i.e. dismissals due to operational reasons.
5. Participation of the works councilAccording to Article 102 of the Works Constitution Act (BetrVG), the employer must consult the works council (where such an institution is installed) before giving any notice, unless there is a termination agreement between the parties. It is not necessary that the works council agrees to the notice.
6. Fixed term employment contractsIt is admissible to conclude a fixed-term employment contract only if:the contract does not exceed a duration of 24 months (within this term three extensions are allowed); orthe fixed term is justified by a sufficient cause and does not lead to a circumvention of the rights granted by the Federal Dismissal Protection Act.
A fixed-term employment contract always needs to be justified by sufficient cause if the employee has worked for the same employer at any time in the past.
Sufficient cause to justify limitation includes, for example, predictable limited need because of operational reasons, fixed-tem employment subsequent to a traineeship or university training in order to help the employee to enter the job market and temporary replacement (e.g. to cover a permanent employee’s maternity leave).
7. Second JobIn principle the employee may conclude several employment contracts with different employers. A prohibition from working a second job is only permitted if the employee enters into unfair competition with his employer, his secondary employment affects his working ability to such an extent that he is no longer able to perform the contractually agreed work; or exceeds the maximum working hours laid down by law.
Contractual clauses requiring the employee to inform his employer of any second job and ask for the employer’s permission are valid, but the employer cannot withhold permission unless one of the above mentioned factors is applicable.
8. Statutory sick paymentEmployees are obliged to notify their employer of incapacity to work and the expected duration of incapacity, without undue delay. Where the incapacity for work occurs through no fault of the employee, he or she will be entitled to continued payment of wages for a period of 6 weeks. The employee must have been employed for a minimum of 4 weeks in order to be eligible for the continued payment of wages and has to present a medical certificate stating the incapacity for work by the third day of his incapacity at the latest.
9. Maternity LeaveAn expectant mother must not be employed during the six weeks prior to the birth (absolute ban of employment). The doctor’s or midwife’s certificate determines the start of the period of protection. After having given birth she must not be employed for eight weeks thereafter (absolute ban on employment). This length of time is extended to 12 weeks for premature or multiple births. The employee’s job as at the date they go on maternity leave is guaranteed for their return. The Maternity Protection Act ensures that, as a rule, female employees suffer no financial disadvantages as a result of maternity.
10. Parental LeaveParents with children under four years of age are entitled to unpaid exemption from work and, if they have permanent employment contracts, they are protected from dismissal during that time. The dismissal protection starts when the parent announces the leave, but not earlier than 8 weeks before beginning of the leave. Also protected are part-time employees who continue to work taking no parental leave.