Making protection against dismissal legally secure

Protection against dismissal is at the heart of individual employment law. Employment-promoting labour law requires calculable, legally secure and flexible regulations for the termination of employment relationships.

Germany now has the strictest employment protection provisions for permanent employment relationships in the OECD (OECD, Employment Outlook 2013; OECD, Employment Protection Database, 2013). The Employment Protection Act (Kündigungsschutzgesetz) is a barrier to employment that makes it difficult for low-skilled workers or special groups of workers to participate in the labour market (OECD, Employment Outlook 2015, p. 139).

In addition to the central regulations of the right to dismissal in the Dismissal Protection Act (Kündigungsschutzgesetz, KSchG), there are - scattered - special regulations in numerous laws. Special protection against dismissal exists, for example, for works councils, severely disabled persons, trainees and employees on parental leave and maternity leave.
The BDA has long advocated the modernisation of German employment protection law in order to overcome its employment-inhibiting effect (also the appeal of the OECD, Employment Outlook 2015, p. 139). Robust economic policy studies prove the link between long-term unemployment and rigid employment protection. Anyone who wants to support the willingness to create new employment cannot avoid reforming employment protection.
More flexibility through severance option
A key prerequisite is a reliable framework within which employment relationships can be terminated. In 2019, almost two thirds of all dismissal protection proceedings ended by settlement, and significantly less than ten % by judgment (Destatis, Rechtspflege Arbeitsgerichte 2019, published on 5 August 2020). This shows: The desire for a severance payment is often the actual reason for legal proceedings. By introducing a severance pay option, maximum calculability and legal certainty can be created without changing or worsening anything in the protection against dismissal for existing employment relationships. Employer and employee could then contractually agree that the employee waives the right to bring an action against unfair dismissal in return for the promise of a severance payment. Such an option strengthens private autonomy and contractual freedom.
Further develop the right of termination
In addition, the right of termination needs to be further developed:
  • The preconditions for notices of change must be designed in a calculable manner. An adjustment of working conditions through a change notice can be a contribution to maintaining the job and thus securing existing employment relationships.
  • The procedure for the dismissal of a severely disabled person must be legally secure. The special protection against dismissal should therefore only apply once the severely disabled person's ID card has been presented to the employer. In addition, it is mandatory that the integration offices must decide within one month whether they agree to the dismissal. The characteristic of severe disability should not be taken into account separately in the context of social selection. Severely disabled employees are already adequately protected by the special protection against dismissal provided for in Book IX of the Social Code and the requirement for approval by the integration office provided for therein.
  • It should be clarified in the Works Constitution Act that only the complete failure to consult the works council leads to the invalidity of the dismissal. It must be possible for the employer to provide the works council with information retrospectively, even in the context of proceedings for protection against dismissal.
  • The default of acceptance must be newly regulated. For this purpose, a regulation is suitable according to which the claim for default wages expires insofar as the validity of the termination is confirmed in the course of appeal.
  • The existence of a justified employer interest in maintaining the personnel structure (Sec. 1 (3) Sentence 2 KSchG) should be indicated if the total number of dismissals in all comparison groups in relation to the total workforce of the establishment reaches the threshold value of Sec. 17 (1) KSchG.
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