Termination and notice periods in Germany: A 2026 employer guide

Ending an employment relationship in Germany is one of the harder things a foreign employer has to get right. German law gives employees strong protection against dismissal, and the process is far more prescriptive than in countries like the UK or the US.

This guide covers the statutory notice periods, the dismissal protection that applies to most employees, the grounds an employer needs and the practical steps a termination has to follow to stand up.

Notice periods are set out in the German Civil Code, the Bürgerliches Gesetzbuch. The statutory minimum for an employer rises with the employee’s length of service.

The baseline is 4 weeks, ending on either the 15th or the last day of a calendar month. After that the employer notice extends with tenure. The progression runs roughly as follows.

• Up to 2 years of service: 4 weeks to the 15th or end of the month
• 2 years: 1 month to the end of the month
• 5 years: 2 months to the end of the month
• 8 years: 3 months to the end of the month
• 10 years: 4 months to the end of the month
• 12 years: 5 months to the end of the month
• 15 years: 6 months to the end of the month
• 20 years: 7 months to the end of the month

A probationary period of up to six months can carry a shorter notice of two weeks. Contracts and collective agreements can set longer notice, but they cannot reduce the statutory employer minimums.

This is the part that catches employers out. The Dismissal Protection Act, the Kündigungsschutzgesetz, applies once an employee has been with the business for more than six months and the company employs more than ten people.

Where it applies, an employer cannot dismiss someone at will. The dismissal has to be socially justified, which means it must rest on one of three recognised grounds.

The first is conduct, where the employee has behaved in a way that warrants dismissal, usually after a prior formal warning. The second is personal reasons, such as long-term incapacity to perform the role. The third is operational reasons, where the role genuinely disappears for business reasons and a social selection process determines who is affected.

Without one of these grounds, a protected dismissal can be challenged in the labour court and overturned.

A valid termination in Germany follows a defined process, and skipping a step can invalidate the whole thing.

Notice has to be given in writing, on paper, with an original signature. An email or a digital message does not meet the legal form requirement. Where the business has a works council, the council must be consulted before notice is served, and a dismissal issued without that consultation is void.

The employee then has three weeks from receiving notice to file a claim with the labour court if they want to contest it. This short window means disputes surface quickly, so the paperwork and the grounds need to be sound from the outset.

Germany has no general statutory right to severance pay. In practice, though, severance is common, often emerging through a settlement where the employer pays a sum in exchange for the employee not contesting the dismissal.

A widely used benchmark is half a month’s salary for each year of service, though the actual figure is negotiated and varies with the strength of each side’s position. Operational dismissals under a social plan can carry their own agreed severance terms.

German termination law rewards employers who follow the process and punishes those who improvise. A dismissal that misses the written form, skips works council consultation or lacks a justified ground can be reversed, leaving the employer liable for back pay and an employee still on the books.

For a company employing in Germany from abroad, this is difficult terrain. The grounds, the notice calculation, the works council steps and the three-week claim window all have to be handled correctly and in order.

This is where an Employer of Record makes the difference. As the legal employer in Germany, Boundless manages the termination process end to end, from the correct notice calculation to the form requirements and the works council position, while keeping you compliant throughout. Pricing starts from €175 per month with transparent costs.

Code Institute worked with Boundless to employ people across borders without taking on the risk of getting each market’s employment rules wrong, leaving the compliance detail to the team that handles it daily.