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Ins and Outs re. Notice Periods and Fixed-Term Employment

Employment relationships may end for various reasons. Two of the most common reasons are termination by either party or the end of a fixed-term contract. An employment contract may be terminated by either the employer or the employee by observing the applicable notice period. Employment contracts may also be concluded for a fixed-term. If the period of time agreed upon by the parties has been reached, or if the purpose for which the fixed-term contract has been concluded has been achieved the employment relationship will end automatically.

Today’s blog aims to provide a basic overview on German notice periods. On Tuesday, we will then focus on fixed-term contracts under German employment law.

 

How long is the statutory minimum notice period?

The statutory minimum notice periods for termination by the employer are as follows:

  • During the first 2 years of service, 4 weeks effective to the 15th or to the end of a calendar month;
  • After 2 years of service, 1 month effective to the end of a calendar month;
  • After 5 years of service, 2 months effective to the end of a calendar month;
  • After 8 years of service, 3 months effective to the end of a calendar month;
  • After 10 years of service, 4 months effective to the end of a calendar month;
  • After 12 years of service, 5 months effective to the end of a calendar month;
  • After 15 years of service, 6 months effective to the end of a calendar month;
  • After 20 years of service, 7 months effective to the end of a calendar month.

After 2 years of service, terminations are only effective to the end of the calendar month.

The statutory minimum notice period for terminations by employees is 4 weeks effective to the 15th or the end of a calendar month.

Most employment contracts provide for a probationary period which may not exceed 6 months. During the probationary period both parties may terminate the employment relationship by giving 2 weeks’ notice.

The statutory minimum notice period may be changed in collective bargaining agreements (CBA). The parties to the CBA may shorten or extend the statutory minimum notice periods.

Can the statutory minimum notice period be amended in individual employment contracts?

Yes, an extension of the statutory minimum notice period is permissible in individual employment contracts. However, it is not possible to shorten the statutory minimum notice period. The notice period for a termination by the employee cannot be longer than the notice period for a termination by the employer. This would be considered discriminatory by German courts and thus void. If the contract stipulates a notice period which is shorter than the applicable statutory minimum notice period, the statutory minimum notice period will prevail.

Is it possible to terminate the employment contract with immediate effect?

Yes, a termination of the employment contract with immediate effect is possible if there are circumstances  which, taking into account the entire situation of the individual case and weighing the interests of both parties, render a continuation of the employment relationship until the end of the statutory or agreed termination period unreasonable.  The employer’s right to dismiss for cause cannot be eliminated or restricted. Any contractual provisions to that effect are invalid.

Does payment in lieu of notice exist?

No, payment in lieu of notice does not exist in Germany.