Rights, Deadlines, and Options Following a Termination

October 2026 – Authors: Attorney Volker Mauch, Attorney Till Heinrich

Termination often comes as a surprise. At this point, it’s crucial to stay informed and act quickly.

For foreign workers in Germany who receive a termination notice, not only their job but also, in some cases, their residence permit in Germany is at stake.

What is the legal situation after termination? What are the key deadlines for filing a wrongful termination lawsuit, what options do you have, and how can you still negotiate a severance package? We provide a brief overview.

Do you want to challenge your termination? Then you must act quickly. You must file a lawsuit with the labor court within three weeks of receiving written notice of termination (Section 4 of the German Dismissal Protection Act [KSchG]). This deadline for filing a dismissal claim is absolute. If you miss it, the termination is valid, and you will have neither the opportunity to challenge it nor to negotiate other claims, such as severance pay. Many clients underestimate this deadline or wait for a response from their employer or the works council. This can prove costly. An extension of this deadline is possible only in rare, exceptional cases and is subject to very strict conditions.

We also strongly recommend that you immediately register as a job seeker with the Employment Agency at the same time to secure your full entitlement to unemployment benefits. This is because a late registration can result in a waiting period.

Not every termination is justified or formally valid. It must first meet certain formal requirements:

• A termination must be in writing—that is, on paper and signed as an original. An electronic form, such as via email or WhatsApp, would be invalid;

• Only authorized representatives of the employer may sign termination notices. This must always be verified if the signatory is not the owner or managing director and you cannot directly verify their authority to act on behalf of the employer;

• The termination notice must clearly state who is affected and what is intended. While this may sound straightforward at first, it can certainly be problematic in individual cases.

Furthermore, in larger companies (where a total of ten full-time positions are filled), general protection against termination applies after a minimum employment period of six months. According to this provision, a termination is legally invalid if it is socially unjustified—that is, if it is not based on reasons related to the employee’s person or conduct or on urgent operational requirements; see § 1 KSchG.

In the case of terminations for operational reasons, the employer must also make a socially equitable selection among comparable employees, considering length of service, age, support obligations, and severe disability. If a works council exists, it must be consulted prior to any termination.

General protection against termination applies to foreign employees just as it does to German employees – it is derived from the employment relationship, not from one’s passport. In addition, there are numerous other grounds for invalidity – ranging from procedural errors and discrimination to special protection against termination, such as for pregnant women, severely disabled individuals, or works council members.

The goal of such a lawsuit is to establish that the employment relationship has not been terminated by the dismissal, combined with continued employment and back pay. In addition, there is practically always the possibility of negotiating an amicable solution with the employer, whether through a settlement agreement or a court-mediated settlement.

In the case of termination for operational reasons, the employee may even be entitled to statutory severance pay. Such severance pay amounts to half a month’s salary for each year of employment, see § 1a KSchG. During the proceedings themselves, the labor court may, upon request, terminate the employment relationship in exchange for payment of an appropriate severance payment if, for example, it would be unreasonable to expect the employee to continue working or if, in the court’s view, the employer has grounds for terminating the employment relationship, see § 9 KSchG.

However, caution is advised when entering into a termination agreement too hastily. It may trigger a waiting period for unemployment benefits because the termination of the employment relationship without good cause is considered conduct contrary to the terms of insurance coverage, thereby suspending the entitlement to benefits for twelve weeks (Section 159 of SGB III). Whether a waiting period is likely to apply—and under what conditions—must be verified before any signature is provided.

However, there is generally no automatic entitlement to severance pay. Severance pay is generally the result of negotiations. In practice, a rule of thumb has emerged: severance pay equal to half a month’s gross salary for each year of service. However, it is freely negotiable and depends crucially on the specific circumstances of the employment relationship and its termination, as well as the respective negotiating positions.

The calculation basis should include not only the base salary but all components of compensation, such as allowances, bonuses, commissions, Christmas and vacation pay and regularly worked overtime (see Schröder – Grobys/Panzer-Heemeier, StichwortKommentar Arbeitsrecht, “Action for Protection Against Dismissal,” paras. 57–60). Severance payments are exempt from social security contributions but are subject to taxation as wages.

For our foreign clients, in addition to employment law issues, the most pressing question is often what happens to their residence permit after losing their job.

A residence permit for the purpose of gainful employment – whether as a skilled worker in a qualified position or as a holder of an EU Blue Card – is generally tied to that specific purpose. If the employment that forms the basis of the residence permit ends, there is a risk that the Federal Employment Agency will revoke its approval, resulting in the revocation of the residence permit.

However, there is usually a transition period to find a new, suitable position. Problems can arise if the residence permit is subject to a condition subsequent that causes the permit to expire immediately upon the termination of the specific employment relationship. For this reason, a thorough review of the ancillary provisions is necessary (see Marx – Marx, Residence, Asylum, and Refugee Law, §5 Labor Migration, paras. 191–199), and advice regarding employment law and residence law must be coordinated.

As attorneys specializing in residence and employment law, we always keep all relevant issues facing our foreign clients in mind and provide advice and representation in a goal-oriented, trustworthy, and cross-disciplinary manner.