PROTECTION AGAINST DISMISSAL IN EMPLOYMENT LAW

What does protection against dismissal mean in employment law?

In employment law, protection against dismissal refers to legal provisions that exclude or make it more difficult for an employer to terminate an employment relationship by giving ordinary (timely) notice.Rules that exclude or make it more difficult for employees to give ordinary notice are traditionally not considered part of protection against dismissal.

The most important dismissal protection provisions are contained in labor law statutes such as the Protection Against Dismissal Act (KSchG) or the Maternity Protection Act (MuSchG). Collective agreements and employment contracts may also contain rules on dismissal protection.

General protection against dismissal

Every employee can acquire general protection against dismissal. The requirement is to have been employed for more than six months in a company that regularly has more than 10 employees. If the employment relationship existed before 2003, it is sufficient that more than 5 employees were regularly employed at that time, provided that more than five of today’s employees were already employed before 2003 and have remained continuously employed since then.

During the probationary period, both employer and employee may terminate the employment relationship with a shortened notice period of two weeks. However, during the first six months of employment, protection against dismissal does not yet apply. These first six months are therefore considered a statutory probationary period. Within this time, any employment relationship can be terminated on the grounds that the employee is not suitable for the position.

Statutory grounds for dismissal

For employees who enjoy general protection against dismissal under the KSchG, dismissals are only valid if based on at least one of three reasons specified in the Act:

According to § 1 KSchG, an ordinary dismissal by the employer must be based on

• reasons related to the employee’s person, and/or

• reasons related to the employee’s conduct, and/or

• operational requirements.

The dismissal must also be proportionate in the individual case. Only then is it “socially justified” and therefore valid.

Accordingly, dismissals are categorized as dismissals for personal reasons, conduct-related dismissals, and redundancies for operational reasons. The most practically relevant subtype of a dismissal for personal reasons is dismissal due to illness. Illnesses constitute circumstances inherent in the person and, under strict conditions, may entitle the employer to terminate the employment.

The three reasons must actually exist. It is not sufficient for an employer merely to allege them. In the case of a dismissal protection lawsuit, labor courts carefully examine whether the dismissal is indeed socially justified under the KSchG.

Balancing of interests – proportionality of dismissal

According to case law, every ordinary dismissal requires a balancing of interests that must come out in favor of the employer; otherwise the dismissal is invalid. Termination, and thus ending the employment relationship, may only be the last resort. This is called the principle of ultima ratio.

What is considered?

In this balancing of interests, the courts may take into account the employee’s past behavior, any prior warnings, the nature, severity, and frequency of misconduct, any contribution by the employer to the misconduct, the employee’s length of service, age, the labor market situation, possible redeployment, and operational needs. The many factors show the broad discretion courts have here.

Priority of modification dismissal over termination dismissal

According to the labor courts, dismissal should only be a last resort for the employer. Before declaring redundancy, employers must, where possible, offer the employee another available job.Employers may even be required to offer a less favorable position before proceeding with dismissal. In such cases, the employer must issue a modification dismissal instead of a termination dismissal: the employer terminates the existing employment and simultaneously offers continuation under altered conditions (e.g., in another, possibly lower-paid role). This is referred to as the priority of modification dismissal over termination dismissal.

What does general protection against dismissal not cover?

The protection under § 1 KSchG is limited. If the employer can rely on one of the listed reasons and the dismissal is proportionate, the general protection against dismissal no longer applies.

Furthermore, § 1 KSchG does not protect against extraordinary dismissals. If employers can cite an “important reason” under § 626(1) of the Civil Code (BGB), extraordinary dismissal is valid.

Special protection against dismissal

Certain employees enjoy special protection against dismissal outside the general provisions of the KSchG. These employees are not only covered by the general dismissal protection but are additionally safeguarded.

Which employees have special protection?

These particularly protected employees include, in particular, works council members, pregnant women, and employees with severe disabilities.

• Works council members may only be dismissed if the business or department is closed. Otherwise, ordinary dismissal is excluded. For an extraordinary dismissal, the employer needs the prior consent of the works council. If consent is refused, the employer must obtain judicial approval from a labor court.

  
  

• Pregnant women and young mothers (up to four months after giving birth) are generally protected against dismissal under the Maternity Protection Act. They cannot be dismissed if the employer is aware of the pregnancy or childbirth at the time of dismissal. Exceptions require prior approval by the state occupational health authority.

  
  

• Employees with severe disabilities or equivalent status may only be dismissed with prior consent from the Integration Office. If a representative body for severely disabled employees (SBV) exists in the company, it must be consulted before the planned dismissal. Any dismissal without such consent or without involving the SBV is invalid.

Dismissal protection lawsuit and procedure

What is a dismissal protection lawsuit?

It is a legal procedure in which an employee challenges dismissal by the employer. The labor court examines whether the dismissal is socially justified and complies with legal provisions.

When does the KSchG apply?

It applies if the company regularly employs more than 10 employees and the dismissed employee has been employed there for more than 6 months.If the company employs at least 5 but not more than 10 employees, the KSchG applies only to employees whose employment began before January 1, 2004. For later employees, it does not apply.In small businesses with fewer than 5 employees, dismissals cannot be reviewed for social justification – only for general legal principles (e.g., immorality).

Against which dismissals can employees file a lawsuit?

Employees may challenge any type of dismissal by the employer: ordinary, extraordinary, or modification dismissal.

Process of a dismissal protection case

Filing the claim

The process begins with filing a dismissal protection claim at the labor court. This must be done within 3 weeks of receiving the written dismissal. It is not enough to post it within the deadline – it must arrive at the court in time.

If the claim is not filed in time, the dismissal is deemed valid from the start and the employment ends. Later challenges are only possible in rare exceptional cases.A late filing may be admitted if the employee was prevented, through no fault of their own, from filing on time (e.g., being abroad on vacation and only learning of the dismissal after the deadline).

The lawsuit can be filed with the help of the court’s legal office. A lawyer is not mandatory at this stage.

Conciliation hearing

Usually, a conciliation hearing takes place a few weeks after filing. The aim is to reach a settlement. Settlements often involve agreeing on termination of employment plus severance pay, compensation for unused vacation days, and a reference letter. A severance payment is otherwise not automatically owed.

Chamber hearing and judgment

If no settlement is reached, the court schedules a chamber hearing with one professional judge and two lay judges. This is often preceded by an exchange of written submissions.Even at this stage, a settlement is possible. If not, the court rules on the validity of the dismissal. If the employer cannot justify or prove the dismissal, the court upholds the employee’s claim.

Appeal

The losing party may usually appeal to the Regional Labor Court. Such proceedings may take several months until final judgment.

When is a dismissal protection lawsuit worthwhile?

It is usually worthwhile if the dismissal is likely invalid – for instance, if there is no legal ground, the employer cannot prove it, or if the works council was not consulted.A lawsuit can either secure continuation of employment or lead to severance. Most labor court cases end in settlement, where the employer pays severance.

Even if dismissal is likely valid, a lawsuit can still be worthwhile. Employers often prefer settlement to avoid the uncertainty of litigation. Meanwhile, employees can also search for new jobs.

Is a lawsuit unnecessary if the employer withdraws the dismissal?

No. The lawsuit is not redundant even if the employer “withdraws” the dismissal. Reasons:

• A dismissal cannot be unilaterally withdrawn once delivered. Withdrawal is usually just an offer to continue employment, requiring employee consent.

• The mere filing of a lawsuit does not imply consent. The dismissal remains in force.

• The 3-week filing deadline still applies, even if the employer claims to withdraw the dismissal.