When Does the Protection against Dismissal Act (KSchG) Apply?

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

Whether the Protection against Dismissal Act (KSchG) applies to your situation depends, among other things, on how many employees are regularly employed at your business. As a general rule, the business must have more than ten employees.

For the purposes of this calculation, all employees who have an employment relationship with your employer are generally counted. The key factor is that they are integrated into the business, perform their work there, and follow the employer’s instructions. Those who only occasionally attend meetings or presentations are not automatically included in the count based on that alone.

Apprentices are not included in the calculation. This generally also applies to interns and volunteers if their activities focus on training rather than work performance.

Part-time employees are counted on a pro-rata basis:

• up to 20 hours per week: 0.5

• more than 20 but up to 30 hours per week: 0.75

• more than 30 hours per week: 1.0

Overtime does not factor into this calculation. The threshold of more than ten employees can therefore be reached with a calculated headcount of just 10.25.

Family members are only counted if an actual employment relationship exists. Self-employed individuals, freelancers, and persons working exclusively under a contract for services, on the other hand, are generally not included. Managing directors of a GmbH are also not normally considered employees within the meaning of the Protection against Dismissal Act (KSchG); in special cases, such as within a corporate group, different rules may apply.

Employees with a foreign employment contract may also be counted. This also applies to employees with a German employment contract who have been sent abroad only temporarily.

Temporary agency workers are generally counted as part of the agency’s workforce. Under certain conditions, they may also be counted as part of the workforce of the company where they are actually assigned.

What matters is not how many people happen to be employed on the day of your termination. Rather, the decisive factor is how many employees the business regularly requires. Temporary spikes or exceptionally low employee numbers are therefore generally disregarded. This also applies to the frequent rotation of temporary agency workers.

Whether employees from the office, store, and warehouse are counted together depends on whether these areas constitute a single business operation.

The decisive factor is not merely that the areas have different functions—such as administration in the office, sales in the store, and logistics in the warehouse. What matters most is whether they are under common management.

If hiring, terminations, transfers, working conditions, and important organizational decisions are made centrally by management or a shared human resources department, this strongly suggests a single business operation. In this case, employees from the office, store, and warehouse are counted together.

Even different locations do not automatically mean that there are multiple independent business operations. Likewise, it is not sufficient for the areas to have their own designations or to be managed by separate department heads.

A separate business is generally considered to exist only when each division has its own, truly independent management that makes decisions, in particular, regarding personnel matters and essential working conditions.

A warehouse manager who only organizes daily operations therefore does not normally constitute a separate business if management continues to decide on hiring, terminations, and essential working conditions.

The applicability of the Protection against Dismissal Act (KSchG) depends not only on how many employees work in an office, store, or warehouse, but also on whether these areas are managed jointly or separately. If they are subject to a unified management structure, the employees are generally counted together; separate consideration is possible only in cases of truly independent management structures.