If an employee is dismissed by their employer, they are faced with the question of severance pay. You may also be entitled to this.
Entitlement to severance pay in the event of termination by the employer
Being given notice of termination can be a traumatic experience for you, especially if it is unexpected and sudden. To enable you as an employee to compensate for financial losses, compensation payments are often made in the form of severance pay. But not everyone is actually entitled to severance pay. Legally anchored cases are limited to the following:
- Employment contract:Check your employment contract to see if it contains a severance payment provision.
- Termination agreement: Usually concluded by mutual agreement, the employer can “get rid of” you with a severance payment before the actual notice period. This means that both of you are voluntarily terminating the employment relationship and you will receive the agreed severance payment in return.
- Operational changes: Terminations issued for this purpose may result in severance payments to compensate for disadvantages suffered, since no social plan is agreed.
- Dismissal protection suit: If you feel you have been treated unfairly and file a lawsuit against your dismissal in the labor court, a severance payment can be negotiated instead of reinstatement.
- Failure to file a wrongful termination suit: In the case of redundancies, employers often award the employee severance pay in order to avoid a potentially costly legal dispute. As an employee, you must confirm in writing that you will not sue upon receipt of the severance pay.
Your entitlement in the event of dismissal for operational reasons
In the case of dismissals for operational reasons, German law actually provides for a claim to severance pay. The prerequisite for this is that you, as the employee, refrain from filing a wrongful termination suit. The reference to this is always included in the termination letter. Other requirements are:
- Her employment relationship was subject to protection against dismissal.
- You have worked for your employer for more than 6 months.
- The company employed more than 10 people including you.
- The amount of the severance payment will depend on the length of your employment with the company. The law stipulates that half of your gross salary is to be paid per year of employment.
- Note: Your entitlement to any severance pay arises upon expiry of the notice period.