Protection Against Dismissal Act and Severance Pay – Your Rights at a Glance

1. When does the Protection Against Dismissal Act apply to you?

1. When does the Protection Against Dismissal Act apply to you?

The Protection Against Dismissal Act (KSchG) applies under the following conditions:

  • You have been employed at the company for more than 6 months
  • The company employs more than 10 employees (if hired before 2004: more than 5 employees)
  • You are in a permanent employment relationship

Case study: An employee of a startup company with 12 employees receives a dismissal notice after 8 months. She is covered by the Protection Against Dismissal Act and can assert her rights.

2. What types of dismissals are possible under the Protection Against Dismissal Act?

2. What types of dismissals are possible under the Protection Against Dismissal
Act?

The Protection Against Dismissal Act (KSchG) recognizes three types of dismissals as socially justified:

Examples of dismissal for personal reasons:

  • Long-term illness
  • Frequent short-term illnesses
  • Lack of qualification

Examples of behavioral dismissal:

  • Repeated refusal to work
  • Persistent tardiness
  • Criminal offenses within the company

Examples of operational dismissal:

  • Elimination of the workplace
  • Restructuring

3. When are you entitled to severance pay?

Under the Protection Against Dismissal Act (KSchG), there is no automatic entitlement to severance pay. Even if there is no statutory right to severance pay, opportunities to negotiate an appropriate settlement often arise in practice. We at Allenstein Legal in Berlin recommend that you seek legal advice immediately upon receiving a dismissal notice.  

A claim for severance pay can arise through:

  1. Court settlement:

    • Within the framework of a dismissal protection lawsuit
    • During the conciliation hearing
  2. Social plan:

    • In the event of major staff reduction measures
    • In companies with a works council

4. How high is the severance pay under the Protection Against Dismissal Act?

4. How high is the severance pay under the Protection Against Dismissal
Act?

According to the law, there is per se no entitlement to severance pay upon dismissal. Severance pay is always a matter of negotiation. The following has established itself as a rule of thumb:

  • 0.5 monthly salaries per year of employment

In practice, however, higher severance payments are often agreed upon:

Case study: An employee with 8 years of service and a gross salary of €3,500 receives:

  • At least according to § 1a KSchG: €14,000 (0.5 × 8 × €3,500)
  • In practice often: €28,000 (1.0 × 8 × €3,500)

5. What do you need to consider regarding a dismissal protection lawsuit?

5. What do you need to consider regarding a dismissal protection
lawsuit?

Important points for your dismissal protection lawsuit:

  • Three-week deadline for filing a lawsuit from receipt of the dismissal notice
  • Filing a written lawsuit with the labor court
  • Presentation of the grounds for invalidity
  • Conciliation hearing as the first instance
  • Possibility of a settlement with severance pay

Our recommendations:

  1. Seek legal advice immediately
  2. Keep an eye on deadlines
  3. Secure evidence
  4. Signal willingness to negotiate

6. Conclusion

The Protection Against Dismissal Act offers you important rights in the event of a dismissal. Even if there is no statutory right to severance pay, opportunities to negotiate an appropriate settlement often arise in practice. We at Allenstein Legal in Berlin recommend that you seek legal advice immediately upon receiving a dismissal notice. Only then can you be sure that you are exercising your rights optimally and have the best chances of a fair severance payment.

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Last updated on 25. June 2026

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