Severance pay in Germany: When can you get it?

  • In Germany, there are few occasions when employees are entitled to severance pay.
  • Nevertheless, most employees can receive severance payments.
  • With the right steps you can improve your chances of severance pay and get a payment of up to 4 gross monthly salaries per year of employment.

When are you entitled to severance pay?

Although there is no statutory right to severance pay, some employees are entitled to severance pay through

  • the employment contract

  • a collective agreement: Contact your trade union or relevant employers’ association to find out if such a collective agreement is applicable to you.

  • a severance scheme: If a works council exists in your company, they may have agreed upon a severance scheme with your employer. Contact your works council to find out whether such a severance scheme exists.

  • the letter of dismissal: In case of operations-related terminations, your employer may specifically indicate your claim for severance pay in the letter of dismissal.

In addition, employers often pay severance payments in the context of

  • termination and post-termination agreements or
  • unlawful terminations

Why should you be careful operations-related terminations and agreements?

Even if offers of severance pay by your employer may sound lucrative at first, most often you are off much worse. Not only do you usually settle for relatively low severance amounts, a blocking period can be imposed for the payment of your unemployment benefit. This is because accepting severance payment offers may be interpreted as amicable terminations. It is therefore advisable to seek expert help in order to negotiate an appropriate severance amount and avoid detrimental effects on unemployment benefit.

» Avoid any disadvantages from severance pay offers & subject your case to our free and non-binding initial check. Start your check now.

How can you receive severance pay even without entitlement?

Even if you are not entitled to severance pay and your employer does not offer a payment on its own initiative, you can still negotiate a severance payment. Often, employers use their information and power advantage and terminate employees unlawfully to avoid severance payments. However, if you contest your termination, employers usually let themselves in on paying severance pay to avoid costly legal consequences.

Your prospects of severance pay?
Get your prospects of severance pay assessed & subject your termination to our free and non-binding initial check.

Contesting the termination correctly. If you want to successfully negotiate a severance pay, you should file within 3 weeks a dismissal protection suit or indicate that you intend to do so. This is because employers are usually only willing to pay severance pay if they have to fear costly legal consequences. If you fail to challenge the termination in time, however, your termination is effective in any case and employers are often no longer willing to pay severance pay.

Agreements are often reached quickly. In many cases employers already agree to a severance payment without a dismissal protection suit or before the proceedings to avoid potentially high costs.

How can you improve your chances of severance pay?

Above all, knowing your own negotiating position and how to proceed during the negotiations is crucial for successfully receiving severance pay. With a well-founded challenge of your termination, the right arguments and knowledge of employers' tactics, you can make your severance negotiations successful and receive payments of up to 4 gross monthly salaries per year of employment. It is therefore worthwhile to rely on the experience of experts.

» Find out your prospects of severance pay and your potential severance amount & subject your termination to our free and non-binding initial check. Start your check now.

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