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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.
Everything runs from the day the written notice reaches the manager (Zugang). Record that date first.
|
Period |
What happens |
What the employer should do |
|
First 72 hours |
Notice has been received |
Preserve evidence, fix the date and method of delivery, assemble a small response team |
|
Days 1 to 21 |
The manager’s three-week filing period under section 4 KSchG runs |
Audit the notice for formal defects and, where needed, issue a precautionary second dismissal |
|
Within two weeks of knowledge |
Cut-off for an extraordinary dismissal under section 626(2) BGB |
Make sure any dismissal for cause is received in time |
|
Weeks 3 to 8 |
Claim is served; conciliation hearing (Güteverhandlung) |
Model exposure and decide on a settlement range |
|
Months 3 to 9 |
Chamber hearing (Kammertermin) and judgment |
Full written defence; back-pay risk grows every month |
|
Afterwards |
Appeal to the Landesarbeitsgericht |
Reassess settlement against accrued back pay |
The timings for hearings are typical values. They vary from court to court.
Two things cannot be repaired later: lost evidence and an unclear delivery date. Deal with both at once.
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.
Many cross-border dismissals fail on form before the court ever looks at the reasons. Check four points.
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.
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.
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.
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:
A dismissal issued without the required consent is invalid, whatever the reasons.
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.
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 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.
Job titles such as Director, Vice President or Head of are irrelevant. The actual powers decide.
|
Status |
Dismissal protection |
Competent court |
|
Managing director (Geschäftsführer) or board member |
None under the KSchG (section 14(1) KSchG). The service contract, its term and its notice period decide. |
Civil courts, usually the Landgericht (section 5(1) sentence 3 ArbGG) |
|
Executive with independent power to hire or dismiss (section 14(2) KSchG) |
KSchG applies. The employer can have the relationship dissolved by the court against compensation without giving reasons. |
Labour court |
|
All other senior managers |
Full KSchG protection, regardless of salary or title |
Labour court |
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.
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.
Articles 20 to 23 of the Brussels I Recast Regulation (Regulation (EU) No 1215/2012) govern jurisdiction in individual employment disputes.
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.
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.
Attempts to move the dispute to a foreign court seldom succeed and consume time. The better question is how to position the German case.
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.
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.
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.
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.
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 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).
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 (einstweilige Verfügung) is the exception in dismissal cases. Three situations matter in practice:
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.
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.
Under sections 9 and 10 KSchG the court can dissolve the employment against compensation, even though the dismissal was invalid.
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.
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.
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.
Most senior-manager cases settle at or shortly after the conciliation hearing. The decision should follow from the exposure calculation above.
|
Factor |
Early settlement |
Settlement after first defence |
Full defence |
|
Typical result |
Agreed exit with severance |
Agreed exit, terms shaped by the judge’s first assessment |
Judgment on validity |
|
Duration |
Weeks |
2 to 4 months |
6 to 12 months per instance |
|
Back-pay risk |
None |
Limited |
Grows monthly |
|
Confidentiality |
High |
High |
Low, hearings are public |
|
Suits cases where |
Formal defects exist or speed matters |
The legal position is open |
The dismissal is robust, or misconduct must be established |
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.
A settlement for a senior manager needs more than a severance figure and a release. Address each of the following points.
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.
The employer bears the burden of proving the reasons for the dismissal. The quality of the file usually decides a contested case.
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.
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.
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.
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.
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.
Statements that go beyond the stated reasons can support claims for damages and weaken the employer’s position in settlement talks.
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.
A first assessment is possible quickly if the following arrives as one package.
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.
After a cross-border dismissal of a senior manager in Germany, five checks in the first three weeks determine the result:
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.
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.
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