What to Do After a Cross-Border Dismissal of a Senior Manager That Triggers a Kündigungsschutzklage in Germany

Oct 4, 2026 · @Benjamin Kreiner

When a foreign-headquartered group dismisses a senior manager who works in Germany, the outcome is usually decided in the first three weeks. During that period the manager must file a Kündigungsschutzklage (unfair-dismissal claim), and the employer still has time to find and repair its own mistakes. After that, most errors are permanent.

This guide is written mainly for employers and in-house counsel, with notes for the dismissed manager where the perspective differs. It covers the immediate steps, the formal validity of the notice, whether German dismissal protection applies at all, jurisdiction and applicable law, the procedure before the labour court, financial exposure, and settlement terms that matter at executive level.

German legal terms appear in the original with an English translation. In this field the exact term often decides the result.

The timeline at a glance

Everything runs from the day the written notice reaches the manager (Zugang). Record that date first.

The timings for hearings are typical values. They vary from court to court.

The first 72 hours

Two things cannot be repaired later: lost evidence and an unclear delivery date. Deal with both at once.

• Issue a written litigation hold. Name the custodians, the data categories and the duration. Suspend automatic deletion of email, chat archives and document-management systems for the manager and the decision-makers, in every country where records are stored.
• Secure the notice and proof of delivery. Keep a copy of the signed original, and document who delivered it, when, and how.
• Collect the contract file. This means the employment contract, all addenda, bonus and equity plan documents, any post-contractual non-compete, and the choice-of-law and jurisdiction clauses.
• Secure IT and access logs where misconduct or data removal is alleged.
• Assemble a small team. Legal and HR agree one factual chronology. Information security is briefed if data may leave the company. The board is informed so that internal and external statements stay consistent.

A litigation hold sits in tension with data-protection law. The GDPR requires deletion of data that is no longer needed, and works-council rights may apply to the review of employee data. Define the hold narrowly and document its purpose.

Expect a data subject access request. Claimants’ lawyers routinely use Article 15 GDPR to obtain internal communications about the dismissal. The employer has one month to respond under Article 12(3) GDPR.

Is the notice formally valid?

Many cross-border dismissals fail on form before the court ever looks at the reasons. Check four points.

Written form

Section 623 of the Bürgerliches Gesetzbuch (BGB, Civil Code) requires written form (Schriftform) and expressly excludes electronic form. A notice sent by email, as a scanned PDF or with an e-signature tool is void. The notice needs an original handwritten signature, and the signed original must reach the employee.

This also affects the deadline. The three-week period under section 4 KSchG starts only on receipt of a written notice. A notice that breaches section 623 BGB is void; no filing period starts to run, and the employee does not need to challenge it. The employer’s only remedy is to issue a new, formally valid dismissal.

Authority to sign

The notice must be signed by someone who can legally represent the employer. In group structures, the signatory is often a regional HR director or a manager of the parent company. If a representative signs without attaching an original power of attorney, the employee can reject the notice without undue delay under section 174 BGB. The dismissal is then ineffective.

The safe route is a signature by the managing directors as registered in the commercial register, or an original power of attorney attached to the notice.

Proof of receipt

The employer must prove when the notice was received. The most reliable method is delivery by a messenger who has read the letter, places it in the letterbox and records the date and time. Registered mail is weaker than many employers assume. The Federal Labour Court held on 30 January 2025 (2 AZR 68/24) that a posting receipt and an online tracking status do not establish prima facie proof of delivery.

Type of dismissal and special protection

An extraordinary dismissal without notice (fristlose Kündigung) requires good cause under section 626 BGB. It must be received by the employee within two weeks of the employer learning the relevant facts. It should normally be combined with a precautionary ordinary dismissal.

Some employees can only be dismissed with prior consent of a public authority:

• pregnant employees and those on maternity protection (section 17 MuSchG)
• employees on parental leave (section 18 BEEG)
• severely disabled employees (section 168 SGB IX, consent of the Integrationsamt, plus prior involvement of the representative body for severely disabled employees under section 178(2) SGB IX)

A dismissal issued without the required consent is invalid, whatever the reasons.

Repairing a defect

If the audit finds a formal defect, issue a new, correct dismissal as a precaution. Do this quickly. The new notice only takes effect from its own receipt, the notice period starts again, and for an extraordinary dismissal the two-week window may already have closed.

Does German dismissal protection apply at all?

German law being applicable does not mean the Kündigungsschutzgesetz (KSchG, Protection Against Dismissal Act) applies. Two thresholds and the manager’s legal status decide.

The two thresholds

The KSchG requires more than six months of employment (section 1(1) KSchG) and an establishment that regularly employs more than ten employees (section 23(1) KSchG).

The second threshold is the central cross-border point. According to the Federal Labour Court, only employees working in establishments located in Germany count (judgment of 17 January 2008, 2 AZR 902/06). A group with thousands of employees abroad and six in Germany is a small business for these purposes.

A country manager or sales director who is one of a handful of German employees may therefore have no general dismissal protection. The dismissal then needs no social justification. The form requirements, notice periods, special protection and the ban on arbitrary or retaliatory dismissals still apply.

The manager’s legal status

Job titles such as Director, Vice President or Head of are irrelevant. The actual powers decide.

The second category is narrow. The power to hire or dismiss must exist internally and externally and must form a significant part of the role. Most senior managers in matrix organisations do not meet this test and enjoy full protection.

For managing directors, check whether an earlier employment contract still exists in the background. If it was never validly terminated in writing, it can revive when the appointment ends.

Jurisdiction and applicable law

A manager who habitually works in Germany can almost always sue in Germany and rely on mandatory German protection. Contract clauses pointing elsewhere rarely change that.

Where the manager can sue

Articles 20 to 23 of the Brussels I Recast Regulation (Regulation (EU) No 1215/2012) govern jurisdiction in individual employment disputes.

• The employee can sue at the employer’s domicile or at the place where, or from where, the work is habitually carried out (Article 21(1)).
• This also applies to employers based outside the EU, for example in the United Kingdom or the United States (Article 21(2)).
• A jurisdiction clause binds the employee only if it was agreed after the dispute arose or gives the employee additional courts to choose from (Article 23).
• The employer can sue the employee only in the state where the employee is domiciled (Article 22).

The Court of Justice of the European Union reads the habitual place of work broadly. It is the place where or from which the employee performs the essential part of the duties (Koelzsch, C-29/10; Nogueira, C-168/16). A home office in Germany from which the manager runs a region will usually suffice.

Which law applies

Article 8 of the Rome I Regulation (Regulation (EC) No 593/2008) allows a choice of law. The choice cannot deprive the employee of the mandatory protective provisions of the law that would apply without it. That is normally the law of the habitual place of work. A temporary posting abroad does not change this place.

German dismissal protection is mandatory in this sense. A manager working in Germany under a contract governed by English or New York law can therefore invoke the KSchG, provided its thresholds are met. The court compares both laws and applies the more favourable result to the employee.

One exception deserves attention. Where the contract as a whole is more closely connected with another country, the law of that country applies (Article 8(4) Rome I; Schlecker, C-64/12). Tax residence, social security affiliation and the currency of pay are relevant factors.

Practical consequence

Attempts to move the dispute to a foreign court seldom succeed and consume time. The better question is how to position the German case.

Works council, executives’ committee and BEM

A dismissal issued without the required prior hearing of the employee representatives is invalid and cannot be cured afterwards. Foreign decision-makers overlook this more often than any other requirement.

Works council (Betriebsrat)

Where a works council exists at the German establishment, the employer must hear it before every dismissal (section 102 Betriebsverfassungsgesetz, BetrVG). The employer must state the person, the type of dismissal, the notice period and the reasons. The works council has one week to respond to an ordinary dismissal and three days for an extraordinary one. The notice may only be issued after the response or after the period has expired.

Executives’ committee (Sprecherausschuss)

Executive staff (leitende Angestellte) within the meaning of section 5(3) BetrVG are outside the works council’s remit. The works council only has to be informed (section 105 BetrVG). If an executives’ committee exists, it must be heard before the dismissal under section 31(2) of the Sprecherausschussgesetz (SprAuG). A dismissal without this hearing is invalid.

The definition in section 5(3) BetrVG differs from the one in section 14(2) KSchG. A manager can be executive staff for one statute and not for the other. Where the status is uncertain, hear both bodies as a precaution.

Company integration management (BEM)

Where a dismissal is based on illness and the employee was unable to work for more than six weeks within twelve months, the employer must offer company integration management (Betriebliches Eingliederungsmanagement, section 167(2) SGB IX). Omitting it does not make the dismissal invalid. It does raise the employer’s burden of proof considerably. The employer must then show in detail that no milder measure could have preserved the employment.

How the proceedings run

The manager must file the claim with the labour court (Arbeitsgericht) within three weeks of receiving the written notice (section 4 KSchG). If the deadline is missed, the dismissal is deemed valid from the outset (section 7 KSchG).

The three-week deadline

The deadline covers almost every ground of invalidity, including a missing works council hearing or a missing authority consent. Living or working abroad does not extend it. Late admission under section 5 KSchG is possible only where the employee could not file in time despite all reasonable care, and courts grant it rarely.

For the manager, this means filing first and negotiating afterwards. For the employer, it means that silence from the other side during these weeks is no sign of acceptance.

Where the employer is based abroad, service of the claim can take weeks or months. This does not harm the claimant. Filing in time is sufficient if service follows without delay attributable to the claimant (section 167 ZPO).

Hearings and appeals

1. Conciliation hearing (Güteverhandlung). It takes place before the presiding judge alone, usually a few weeks after filing. The judge gives a first assessment and proposes a settlement. Most dismissal cases end here.
2. Chamber hearing (Kammertermin). If no settlement is reached, the parties exchange written submissions. The chamber, with one professional and two lay judges, hears the case and takes evidence.
3. An appeal to the Landesarbeitsgericht (regional labour court) is always available in dismissal disputes. A further appeal on points of law to the Bundesarbeitsgericht (Federal Labour Court) requires leave.

The court language is German. Contracts, policies and emails in other languages need translations, and foreign decision-makers may have to testify in person with an interpreter.

Interim relief

Interim relief (einstweilige Verfügung) is the exception in dismissal cases. Three situations matter in practice:

• The manager seeks actual employment during the notice period, for example against an unjustified release from duties.
• The manager seeks continued employment after winning at first instance, or under section 102(5) BetrVG where the works council has objected to the dismissal.
• The employer seeks to enforce a non-compete covenant or the return of company property and data.

Financial exposure

German law gives no general right to severance. If the dismissal is invalid, the employment continues and the employer owes the salary for the entire period of the dispute. That back-pay risk drives most settlements.

Back pay (Annahmeverzugslohn)

An employer that loses must pay the remuneration from the end of the notice period until judgment, including variable pay (section 615 BGB). The employee did not have to work during that time.

Illustrative example: a manager earning EUR 15,000 gross per month wins on appeal 14 months after the notice period ended. Back pay = 14 x EUR 15,000 = EUR 210,000, plus employer social security contributions.

Section 11 KSchG reduces this amount by what the manager earned elsewhere, by unemployment benefits received, and by what the manager maliciously failed to earn. The Federal Labour Court has strengthened the employer’s position here. The employee must disclose job offers received from the employment agency (judgment of 27 May 2020, 5 AZR 387/19). Employers should send suitable vacancies to the manager during the dispute. Managers should document their applications.

Dissolution by the court

Under sections 9 and 10 KSchG the court can dissolve the employment against compensation, even though the dismissal was invalid.

• The employee must show that continued employment is unreasonable.
• The employer must show facts that rule out further cooperation serving the business. Courts apply this strictly. The application is also barred if the dismissal is invalid for other reasons, such as a missing works council hearing.
• For executives under section 14(2) KSchG, the employer’s application needs no reasons. This is the main practical advantage of that status.

Compensation is capped at 12 months’ earnings. The cap rises to 15 months for employees aged 50 with 15 years of service, and to 18 months for those aged 55 with 20 years of service.

Negotiated severance

The common starting point is a simple formula:

Severance = 0.5 x gross monthly salary x years of service

Example: 0.5 x EUR 15,000 x 10 years = EUR 75,000.

This is a rule of thumb only. The factor moves with the litigation risk. Where the dismissal is weak, senior managers regularly negotiate a factor of 1.0 or more. Where the KSchG does not apply, the factor can approach zero. Whether bonus and equity count towards the monthly salary is itself a matter for negotiation.

Legal costs

At first instance each party bears its own lawyers’ fees, whoever wins (section 12a Arbeitsgerichtsgesetz, ArbGG). From the appeal stage, the losing party pays. The value in dispute for a dismissal claim is three months’ gross salary (section 42(2) Gerichtskostengesetz). Court fees fall away if the case ends by settlement.

Settle or defend?

Most senior-manager cases settle at or shortly after the conciliation hearing. The decision should follow from the exposure calculation above.

A full defence is the right choice where a settlement would invite similar claims, where fraud or compliance breaches must be put on record, or where the KSchG clearly does not apply.

Settlement terms at executive level

A settlement for a senior manager needs more than a severance figure and a release. Address each of the following points.

• End date and garden leave. Fix the termination date, the release from duties (Freistellung) and the offsetting of remaining holiday.
• Early-exit clause (Sprinterklausel). The manager may leave earlier, and the salary saved is added to the severance in whole or in part.
• Bonus and variable pay. Agree fixed amounts for the current and the final year. Do not leave target achievement open.
• Stock options, RSUs and virtual shares often sit in plans governed by foreign law with the parent company as counterparty. Settle leaver status, vesting during garden leave and exercise periods expressly.
• Post-contractual non-compete. It is binding only if the employer pays at least half of the last remuneration for its duration (sections 74 et seq. Handelsgesetzbuch). Either confirm it or cancel it by mutual agreement.
• Reference (Arbeitszeugnis). Attach the agreed wording. The employee is entitled to a truthful and benevolent reference.
• Other items. Company car, pension, D&O insurance cover, return of property, confidentiality, non-disparagement and an agreed announcement.
• Release clause. State what is excluded, typically pension rights and equity.

Severance is subject to income tax but, as a rule, not to social security contributions. In cross-border cases the applicable double tax treaty decides which state may tax it. Both points need specialist tax advice before signing.

The manager should check the effect on unemployment benefits. A settlement that shortens the notice period or looks like a voluntary exit can trigger a suspension of benefits.

The settlement is best recorded by the court under section 278(6) ZPO. A court settlement satisfies the written-form requirement and is directly enforceable.

Evidence, data protection and privilege

The employer bears the burden of proving the reasons for the dismissal. The quality of the file usually decides a contested case.

What the court expects

• Operational reasons: who took the business decision, when, and why the position has permanently ceased to exist. Board minutes and reorganisation documents from the parent company should be ready with German translations.
• Conduct: the specific breach and, as a rule, a prior warning (Abmahnung) for comparable behaviour.
• Capability and performance: objective data over a longer period. Performance improvement plans alone rarely carry a dismissal.

The employer is bound by the reasons it gave the works council. Grounds that were known at the time but not communicated in the hearing cannot be introduced later in court.

German civil procedure has no disclosure or discovery. Each party presents the documents it relies on. Readers from common-law jurisdictions tend to overestimate what the other side can be forced to produce, and to underestimate the GDPR access request as a substitute.

Witnesses abroad

A German court cannot compel a witness who lives abroad to attend. The party relying on that witness must arrange the appearance. Identify decision-makers early and record their recollection while it is fresh.

Reviewing employee data

Access to the manager’s emails, chats and devices must be proportionate and based on documented suspicion (section 26 Bundesdatenschutzgesetz and the GDPR). The works council has co-determination rights on technical monitoring. A breach does not automatically exclude the evidence. The Federal Labour Court admitted footage from open video surveillance despite data-protection objections in a case of intentional misconduct (judgment of 29 June 2023, 2 AZR 296/22). It still creates a risk of fines and damages claims.

Privilege and internal investigations

Legal privilege in Germany is narrower than in common-law systems. Advice from in-house counsel is not protected in the same way, and documents held by the company can be seized in criminal investigations. The Federal Constitutional Court confirmed in 2018 (decisions of 27 June 2018 – 2 BvR 1405/17, 2 BvR 1287/17 and 2 BvR 1562/17) that even material held by an external law firm conducting an internal investigation may be seized.

Keep legal advice separate from factual investigation records. Make sure that investigation reports do not contradict the reasons stated in the dismissal.

Communications and enforcement

What the company says about the departure can be used in court. Keep every statement short, factual and consistent with the reasons in the notice.

• Agree one internal announcement with legal before it is circulated. Do not describe reasons for the departure.
• Align statements to customers, investors and the press with the internal wording and with any confidentiality terms under negotiation.
• Brief the manager’s former team not to comment, including on social media.
• Limit access to the personnel and investigation files to those who need them.

Statements that go beyond the stated reasons can support claims for damages and weaken the employer’s position in settlement talks.

Enforcing a German judgment or settlement abroad

Enforcement matters mainly to the manager, who may hold a payment title against an employer with no assets in Germany. Within the EU, a German judgment or court settlement is enforceable in other member states without a separate declaration of enforceability (Article 39 Brussels I Recast). Outside the EU, including the United Kingdom and the United States, recognition depends on the law of the state where enforcement is sought. Local counsel should confirm the route before a settlement is signed.

A settlement with a foreign parent company should therefore name the paying entity and, where the amounts are large, provide security or payment before the end date.

What to send to German counsel

A first assessment is possible quickly if the following arrives as one package.

• The employment contract and all addenda, including choice-of-law and jurisdiction clauses
• Bonus, equity plan and non-compete documents
• The signed dismissal letter, the name and position of the signatory, and proof of the date and method of delivery
• The headcount in Germany and an organisation chart showing the manager’s reporting lines and powers to hire or dismiss
• Evidence of the works council or executives’ committee hearing, if such bodies exist
• The manager’s date of birth, start date, monthly gross salary and any known special protection
• Investigation reports, warnings and performance records relevant to the reasons
• A dated chronology of the events leading to the dismissal

Call counsel immediately in four situations: the notice was sent electronically or signed abroad, employee representatives may not have been heard, misconduct is alleged and the two-week period is running, or the manager’s status is unclear.

Conclusion

After a cross-border dismissal of a senior manager in Germany, five checks in the first three weeks determine the result:

1. Was the notice signed in original by an authorised person, and can receipt be proven?
2. Does the KSchG apply, given the German headcount and the manager’s actual status?
3. Were the works council or the executives’ committee heard before the notice was issued?
4. Can the manager sue in Germany and rely on mandatory German law despite the contract clauses?
5. What is the back-pay exposure if the case runs through two instances?

Once these answers are on the table, the choice between settlement and defence is a commercial calculation. Without them, the employer negotiates blind and the manager may leave money on the table.

This article provides general information as of October 2026 and does not replace legal advice in the individual case.

Need legal advice?

For specialist advice on this topic, contact Benjamin Kreiner, Rechtsanwalt and Fachanwalt für Arbeitsrecht (certified specialist in employment law), at MainLegalTax Kubik Schaffner PartG mbB, a member of the Global Law Experts network.

Sources

Legislation

• Kündigungsschutzgesetz (KSchG), sections 1, 4, 5, 7, 9, 10, 11, 14, 23
• Bürgerliches Gesetzbuch (BGB), sections 174, 615, 623, 626
• Zivilprozessordnung (ZPO), sections 167, 278
• Betriebsverfassungsgesetz (BetrVG), sections 5, 102, 105
• Sprecherausschussgesetz (SprAuG), section 31
• Arbeitsgerichtsgesetz (ArbGG), sections 5, 12a
• Gerichtskostengesetz (GKG), section 42
• Sozialgesetzbuch IX (SGB IX), sections 167, 168, 178
• Mutterschutzgesetz (MuSchG), section 17; Bundeselterngeld- und Elternzeitgesetz (BEEG), section 18
• Handelsgesetzbuch (HGB), sections 74 et seq.
• Regulation (EU) No 1215/2012 (Brussels I Recast), Articles 20 to 23 and 39
• Regulation (EC) No 593/2008 (Rome I), Article 8
• Regulation (EU) 2016/679 (GDPR), Articles 12 and 15

Case law

• • Bundesarbeitsgericht, 17 January 2008, 2 AZR 902/06 (headcount threshold, establishments in Germany)
  • Bundesarbeitsgericht, 27 May 2020, 5 AZR 387/19 (disclosure of job offers, back pay)
  • Bundesarbeitsgericht, 29 June 2023, 2 AZR 296/22 (admissibility of evidence, data protection)
  • Bundesarbeitsgericht, 30 January 2025, 2 AZR 68/24 (proof of receipt, registered mail)
  • Bundesverfassungsgericht, 27 June 2018, 2 BvR 1405/17, 2 BvR 1287/17 and 2 BvR 1562/17 (seizure of material from an external law firm conducting an internal investigation)
  • Court of Justice of the European Union, 15 March 2011, C-29/10 (Koelzsch)
  • Court of Justice of the European Union, 12 September 2013, C-64/12 (Schlecker)
  • Court of Justice of the European Union, 14 September 2017, C-168/16 and C-169/16 (Nogueira and Others)