No one wants to show up for work only to discover that their position is being eliminated or that they are being let go. For international and foreign employees working in Germany, this can be especially devastating after relocation, establishing a life abroad, and potentially limited employment options. Whether you have been notified of a termination or you suspect that your company might be pursuing layoffs, it is important to have a clear understanding of your rights and advantages in the German employment legal system.
Employees have more leverage in Germany than workers in many other countries
Many foreign workers, particularly from the U.S. and other non-EU countries, do not realize that they have significant rights as an employee. Employment contracts (Arbeitsverträge) are required in Germany and therefore give employees, executives, as well as lower-level employees, more leverage in the event of a termination or dissolution of a position. One reason for this is because employers have significant negotiating power at the time of hiring. The German civil code is set up to protect employees, to ensure that terms are legal and that an employee has protections in the event of termination.
Do I have a right to severance pay in Germany?
While employees have significant protection, there is no statutory right to severance pay. However, you may be able to negotiate severance when your manager or HR department presents you with a termination or severance agreement. Some considerations to negotiate severance pay might include whether the severance was justified or if you are in a protected class. For example, if you are an older employee or you have young children you may have higher protection against dismissal. Some employees, including pregnant women, have additional special protections.
Should I sign a severance agreement or “Aufhebungsvertrag”?
Remember that your employer wants you to sign this so that they and you are no longer in contractual obligation. This will immediately release them of any duties related to compensation of vacation days, insurance benefits, and other entitlements. Your employer may have specific reasons for wanting to terminate this position quickly because of a restructuring or other business plan.
Signing any severance agreement could mean forfeiting significant rights as an employee. You may also have rights to severance pay, bonuses, unpaid vacation time, special payments, or unpaid commissions. Remember that you are being put under time pressure to sign an agreement and should insist to have sufficient time to fully understand your rights and the potential consequences.
How do I maximize severance pay if I am terminated in Germany?
While severance pay is not required by statutory law, other entitlements can be used as leverage against an employer who wants to terminate an employment contract in order to get a severance pay for the employee. When negotiating severance pay, remember that the payment generally amounts to somewhere between 50% and 4 times the monthly gross salary per year of employment. This is a significant range so you will want to consult with an experienced attorney who can articulate your rights and secure the best possible outcome.
Our attorneys are experienced in executive and severance agreements and will review your contract, establish your rights in the event of a termination, and fight for the best possible severance benefits package.
Berlin, Hamburg, Munich Employment Contract Termination Agreement Lawyer
We at ZELLER & SEYFERT are highly experienced in handling cases involving German employment law, litigation, and alternative dispute resolution (ADR). We also advocate on behalf of clients who will be entering into executive contracts, limited or unlimited contracts, severance and termination agreements or conflicts with regards to German law. Just contact Atty. Dr. Christian Zeller via email@example.com or call us at +49 69 58 80 972-40 (Frankfurt am Main) or +49 30 40 36 785-80 (Berlin).