Chapter 15 Termination of Employment
At a first glance, terminating an employee’s contract of employment seems to be more complicated in Germany than in other jurisdictions. If someone is familiar with the practice, however, this is not necessarily the case. One main difference in comparison to most other jurisdictions is that employees are entitled to reinstatement if the dismissal is not supported by sufficient reasons. If this is the case, the employee is generally not entitled to any severance at all. Usually, courts cannot award a severance payment. Due to this situation—“all or nothing”—employer and employee mutually agree in more than 80% of all cases on a termination of the employment relationship in consideration of a severance payment. Negotiating the severance payment may be troublesome and time consuming, but will result in a fair severance payment in most situations.