We want to ensure you are presented with enough and adequate advice on your rights and points of contact for support in case of layoffs.
This article is mostly relevant in the event you face termination from a company with a Works Council. However, it also contains relevant information in cases without the involvement of a Works Council.
Please note that the information below is provided only in a general form. For any individual labour law-related issues, please always consult a trained professional like a union official or labour lawyer.
Layoffs in Germany are strictly regulated and are subject to negotiations between the employer and the Works Council.
One of the important tasks of Works Councils here is to protect all employees’ interests, and above everything, to ensure and protect employment opportunities for all. This guiding principle is laid down in Section 102 of the Works Constitution Act (BetrVG).
The 10 most important things to remember:
1) Be aware if you sign documents during a meeting. It can have irrevocable consequences.
You will not be penalised for taking your time to review and negotiate.
Take the layoff/mutual termination agreement home, read it carefully, and take advice from your union, legal protection insurance, from the Works Council, from friends, from your fellow colleagues…
2) While the company may impose artificial deadlines, you can never be forced to sign or consent to anything.
Do not feel pressured to sign anything on the day.
3) Unfortunately, people on probation with less than 6 months have limited dismissal protection.
The employer does not need to give a reason for the layoff. The Works Council has limited avenues for support there. To sue against wrongful dismissal in a labour court is possible nevertheless.
4) People past probation period have stronger termination protection.
Companies rarely follow the Protection against Dismissal Act because the employees rarely enforce their rights. Particularly for expats or other employees from minoritized groups, fighting to keep a job may be more worthwhile than accepting a voluntary compensation package.
5) Mutual termination agreement (signing the papers) usually excludes the person from unemployment benefits (ALG1) for 3 months.
If you do not sign a termination agreement and continue to show up to work, the employer will need to formally dismiss you. One advantage to this is you would become eligible for unemployment benefits (ALG1) immediately after the last working day (if you worked anywhere in Germany for at least 12 months within the past 24 months)
6) It is practically impossible to challenge the mutual termination agreement after signing it.
You can sue against wrongful dismissal in a labour court but not against a mutual termination agreement.
7) For operational layoffs, social selection criteria (“Sozialauswahl”) would need to be considered.
These criteria are age, tenure in the company, dependents and disabilities. Companies often prefer to avoid this so it does not set limitations on who they can and cannot terminate.
8) In German labour law, there are nearly no possibilities for sheer performance-based layoffs.
Performance improvement plans or similar things might put you in a worse position. Therefore, you should take advice from your union, legal protection insurance or the Works Council before you sign such things.
9) Talk to the Works Council.
They will have more information than individuals will. Sometimes they are in the power to negotiate better exit packages for workers with the employer collectively.
Again, make sure you do not sign anything before revising it and getting multiple opinions on it.
10) In certain cases, the Works Constitution Act allows you the right to bring a Works Council member to a meeting with the employer.
You can find more general information on German Labour Law here: https://tech.verdi.de/labour-law-basics/
