There is no statutory right to severance pay in Germany.
The payment and amount of severance pay is dependent on negotiations.
You need to act within 3 weeks after receiving your termination to have good chances of severance pay.
Everything important about calculating & receiving severance pay
1. There is no statutory right to severance pay in Germany.
Nevertheless, you can get often a severance payment on termination. Since they is no statutory right, receiving severance pay and the amount of severance pay depends on negotiations between you and your employer after the termination.
2. You can receive up to 0.5 to 4 times your monthly gross salary per year of employment.
Although the formula of the thumb "one half to one full gross monthly salary per year of employment" is widely used to calculate the possible severance pay, in practice it often turns out that the actual amount of severance pay paid can deviate considerably from this result. Being familiar with the arguments of your employer and knowing exactly what is important in negotiations will mostly determine whether you receive severance pay and the amount of the payment. Thus, it is often advisable to consult experts in labour law.
3. Many different factors can affect your severance payment.
- the ineffectiveness of the termination (e.g. unjustified selection based on social criteria)
- high level of protection against dismissal (e.g. high seniority, high age)
- special protection against dismissal (e.g. works council member, pregnancy)
- the employer's wish to terminate the employment relationship as quickly as possible
- possible claims for bonuses, special payments or commissions
- the financial position of the employer
- most importantly: negotiating skills
4. Severance pay is often linked to a complaint against unfair dismissals.
In most cases, severance pay is paid in connection with wrongful terminations by the employer. If employees file a formal complaint to the labour court (or threaten to do so) within 3 weeks after receiving the notice of termination, employers face the risk of risk of the notice being called ineffective meaning they would have to continue employing the employee and would have to pay his/her salary. Employers have however no interest in doing so because they tried dismissing the employee in the first place. So, employers most often let themselves in on severance payments to avoid the risk. Without a timely submission to the labour court (or the possibility to do so) the termination cannot be held unlawful anymore regardless of its original legitimacy. In effect, the employer would not face the risk of continuing the employment and hence would not be willing to pay a severance. So, you need to act fast to preserve your chances!
» Read more about the complaint against dismissals in our article on the dismissal protection suit.
We are here for you
CONNY's partner lawyers are experts in dealing with terminations. Professionally and in a trusting manner, they fend off unjustified terminations or ensure fair severance payments for employees. Our promise: You as a client bear no financial risk. Conny GmbH assumes all legal fees and court costs. You pay a commission only if we are successful. Otherwise you will not be charged anything.