10 Key Steps to Take If You are Fired in Germany!

Layoffs, a word that used to be rarely heard in Germany has become very popular recently. I see the word popping up more and more in newspapers, on TV, and on social media. Even major German companies where jobs were thought to be stable have plans to cut down on their workforce. So even if your job is not at risk now, it could be tomorrow.

And dealing with a layoff is always challenging. So it’s important to know what to do and what your rights are so as not to panic and make the wrong decisions. So here, I will explain in detail how to handle such a situation and the steps you should take to get back on your feet. We will cover everything from unemployment benefits, health insurance, vacations, residency status, and more.

And in the end, I will give you three action points that you can take now to be prepared for such a situation. So, be ready, when the bell rings, because you will be ready to fight. Before we start, a short disclaimer. I am not a lawyer and this is not legal advice, so please do your research before you act on anything I say here. So, one fine morning, your HR or your manager schedules a meeting with you and tells you that you are fired. What would you do? Start crying, give angry replies, or just create a scene.

The first and most important thing you have to do, before anything else, is not to panic and stay calm. I know it's easier said than done. But know that you are in Germany, and Germany has one of the strongest labor laws in the world that protect the working class.

So instead of being emotional, listen to the employer and understand the details of your dismissal.

Now there are three main reasons for a layoff, personal, operational, or behavioral. A personal reason could be that the employer does not see you as fit for the company. For example, if you are regularly missing or do not perform well. Behavior-related reasons could be like not being punctual, or simply refusing to work. Even with these cases, the company can't simply fire you. They will need to have documented proof that they spoke to you about it and provided enough time for you to improve.

Now finally, “betriebsbedingte Gründe” or Operational reasons mean that the employer is making structural changes in the company such as dissolving a department or closing a location. Mostly due to financial problems. But such dismissals could be more difficult for the company. First, they have to prove their financial situation in court and second and most important, the company has to follow Sozialauswahl or social selection. Means they cannot simply pick out say 20 employees to be laid off.

They have to consider many factors such as age, length of service, maintenance obligations, and severe disability of the employees. For example, they cannot fire a 50-year-old who has to support a family while retaining a single 30-year-old, even if the latter is much more productive.

That's the main reason why most employers don’t always go that route.

So understanding the reason for your layoff is very important. But irrespective of the reason, when a company wants to end your work contract, they will first provide a termination letter or so-called Kündigungsschreiben. This has to be a physical letter. Not verbally, not via phone, fax, email, WhatsApp, or whatsoever, This letter usually has your name, the notice period, and the reason why they are firing you.

This is the letter you have to provide to the concerned government bodies. So make sure that all the details in this letter are correct, including the signature. Sometimes employers ask for a confirmation of the receipt of this letter. That's okay, it's only a confirmation that you have received the notice and no way means that you agree to the termination.

Though you have to be careful here. Because there is often a misunderstanding between a termination letter and a termination contract. In some cases, your employer might suggest an Aufhebungsvertrag (termination agreement) or Aufhebungsvereinbarung (termination agreement). Under no circumstances I repeat, under no circumstances should you sign this without thoroughly reviewing all the details.

If you sign it, you don’t get fired; you are agreeing to leave. Your employer can’t force you to sign this. So just collect the termination letter and don’t sign any agreement. After you receive the letter, the first thing you have to do is inform the Bundesagentur für Arbeit. This is the government department responsible for handling unemployment benefits and you have to contact them within three days of being notified about termination. You can do this in person, online, or via phone.

Just Google “Agentur für Arbeit” with your city name to find the contact details. They will invite you for an appointment and guide you through the next steps. So do this before anything else.

The next thing to do is to check, if your company has a “Betriebsrat”, or Workers Council, If yes, then go to them within ten days and talk to them about how they can support you. The Workers Council has significant decision-making rights about staff reductions and company restructuring and in some cases, the dismissal can be contested within the labor union itself.

If that is not the case, then get a letter from them detailing the reason provided by the employer. This document will be helpful when you later challenge the termination which brings us to the next point, Kündigungsschutzklage or dismissal protection suit.

In Germany, those who have completed their probationary period and work in companies with more than 10 employees can file a suit in court to challenge their dismissal. You have exactly three weeks from the date you receive the termination notice to do this. After three weeks, there is nothing you can do against the dismissal, even if it is completely illegal. You can either do it by yourself or through a lawyer. I would recommend consulting a lawyer, as they have experience dealing with such situations and can guide you better.

But for this, it’s important to have legal insurance; or else, you may end up spending thousands of euros. Even if you don't have insurance, most lawyers will offer a free 10-15 minute consultation and can quickly tell you if you have a case. So without delay consult the lawyer with all the documents like the termination letter and the letter from your labor union.

If you do have a case, you will receive a cost estimate from the lawyer that you can submit to your legal insurance provider and proceed accordingly. But keep in mind that, German bureaucracy is slow, and all these could take time.

It can be stressful, and it’s natural to want to settle things immediately, but that won’t be in your best interest. You have to give the lawyers and insurance providers enough time to handle your case properly. This patience will help you come out of this situation in the most beneficial way.

Although the purpose of this legal suit is to get your job back for wrongful termination, in most cases, the company would offer you some amount as a settlement called Abfindung or severance pay. As a general rule, you can expect to receive 0.5 times your monthly income before taxes for each year of your employment. For example, if you worked for five years, your severance pay would be equivalent to 2.5 times your monthly salary. Again this is kind of an average figure, the exact amount will depend on how difficult it would be for the company to fire you otherwise.

This amount will be mentioned in your Aufhebungsvertrag and, you can accept, refuse, or negotiate this deal. But once you sign this, it cannot be revoked and, in principle, cannot be challenged in court. So read the agreement carefully and check with your lawyer before signing.

Now even if you accept or reject this agreement, you won't be asked to leave immediately. Every job comes with a notice period or Kündigungsfrist. This will be mentioned in your contract and can also vary according to how long you have worked for your company

• 1 – 4 years: 1 month to the end of the calendar month

• 5 – 7 years: 2 months to the end of the calendar month

• 8 – 9 years: 3 months to the end of the calendar month

• 10 – 11 years: 4 months to the end of the calendar month

• 12 – 14 years: 5 months to the end of the calendar month

• 15 – 19 years: 6 months to the end of the calendar month

• 20+ years: 7 months to the end of the calendar month

But if you accept the severance pay and agree to leave then there is no minimum notice period. This can be beneficial if you’ve already got another job and want to make a quick transition.

But If you don’t want to leave before your notice period ends, your employer is legally obliged to pay you your full salary until your last day of work, even if there is no work for you to do.

It's up to the employer to either make you work or send you on garden leave. And during this period, you are still entitled to your performance bonus, your sick leaves, and your vacations. In some cases, your employer may choose to compensate you for those unused vacation days with a payment.

I would suggest taking your remaining vacation days and using them for job hunting. And something that can help with your job search during the notice period is a Zwischenzeugnis or interim work certificate. This is like a formal record of your skills, responsibilities, and achievements at your current job. You can use this to boost your job hunt even before you leave your current position. Anyhow when you leave, you will get Arbeitszeugnis or a letter of reference to show proof of the work you did for your employer.

The letter must clearly explain the type of work you did and for how long. You will also receive "Urlaubsbescheinigung" which shows how many unused days of vacation you have, a "Lohnsteuerbescheinigung" or salary tax statement, and a "Gehaltsabrechnung" or your last pay slip. Make sure to get all these documents before you leave, because the Agentur für Arbeit may ask for these to calculate your unemployment benefits.

Before your notice period is over, there could be three possible outcomes:

• You won the lawsuit against termination and got your job back.

• You took the deal with the severance pay.

• Your contract was terminated by the company.

We don't have to talk about option 1 in detail. But if you took the deal with severance pay, it could have an impact on your unemployment benefits. Because in this case, you will have to wait for three months to get unemployment benefits. So in some cases, it might be more practical to decline severance pay and opt for unemployment benefits.

But if it was the third case and you were forcefully dismissed by the company, you would become eligible for Arbeitslosengeld (ALG1) or unemployment benefits immediately. After your last day of work, you must register again with the employment agency to get these benefits. You will receive around 60 percent of your previous net salary or 67 percent if you have children. But again not everyone is entitled to this.

To get the Arbeitslosengeld, in normal cases, you should have paid social security contributions for at least a year. For 12 months of work experience, you get paid for 6 months and for 2 years or more, you will receive benefits for a maximum of 12 months.

After this period, if you still can’t find a job, you move into the next phase and will be provided with a minimum support amount also known as Burgergeld or citizen's allowance. This is around 500 euros for a single adult, but there are conditions to receiving this money. This can cover your basic living expenses.

But what if you get sick during this period? Will the insurance still pay for the treatment? In most cases, the coverage does not change, but the price can. So you have to inform your health insurance provider once you lose your job. If you are on private health insurance and you start receiving unemployment benefits, you must switch to public health insurance.

And you have to pay your own health insurance until unemployment benefits start coming through. Alternatively, your spouse’s or your parents’ public health insurance can cover you for free under Familienversicherung.

But your main focus in the meantime should be to get a job. As soon as you register as a job seeker, Agentur Fur Arbeit or AFA will provide you professional counseling and help you search for jobs. Technically you are still employed by the govt and your main job is to find a job. So you are supposed to stay in the city and inform them of everything like Krank, vacations, etc as you do in a regular job. If not, they can deregister you from their system and not pay you anymore.

Now what about your right to stay in Germany? If you are an EU citizen or a German permanent resident, nothing happens, even if you are unemployed. However, if you are an expat who has a Blue Card linked to your job, things can become more complicated. Normally, your Blue Card remains valid for three months after your last working day.

You must inform the Ausländerbehörde or Foreign Office about your unemployment status. Write a letter in German with all the relevant information and include a copy of your termination notice. They will reply within four to six weeks and in most cases grant you another three to twelve months to find a job.

Even if you are unable to find a job within the timeframe given by the Foreign Office, you can explore other options like switching to a job search visa or language visa. If you still can’t find a job, your residence permit expires, and you may have to leave Germany.

But if you managed to find a new job before your permit expires, you should contact the foreign office and send them a copy of your new work contract. If your residence permit is tied to your previous employer, you’ll need to apply for a new work visa or Blue Card. If you have had your Blue Card for more than 21 months or have a permanent residence permit, then don't need to contact the foreign office.

Also if you are in the process of applying for a permanent residence permit or citizenship, this could be delayed until after the Probation period in the next job is over. Now, even if your job is not at risk right now, there are certain things that you can do to prepare for a worst-case scenario.

First and foremost, get legal insurance for yourself and your family. According to me, this is the second most important insurance in Germany after health insurance. Because lawyer fees in Germany are quite high. And having insurance coverage can help to reduce that burden. It can also help in many other situations, such as road accidents, or disagreements with your landlord.

If you want to be totally on the safer side, then consider also job loss insurance, which can provide you up to €1000 per month on top of your unemployment benefit to cover your expenses. And most importantly, start building an emergency fund to cover at least 6 months to a year of your expenses. A sudden job loss is an emergency, and this is exactly why you need an emergency fund. You can either put it in a high-interest Tagesgeldkonto or low-cost conservative debt mutual fund.

And finally, if you are eligible for a permanent residence permit, apply for it without further delay. Having a permanent residence permit will get rid of the time pressure to find a new job. I know losing a job can be one of the most difficult times in your life. So it’s important to give yourself time to process your emotions and seek support from friends and family. But understand that it's not the end of the road.

People move to Germany for better job opportunities, but also for the strong worker's rights that this country provides.

Among these rights is the ability to defend against unlawful termination and receive support to get back on your feet. This is one reason we pay higher taxes compared to countries like the USA. However, this won’t be useful if you aren’t aware of your rights and don’t use them when needed. If you found value in this blog, share this with everyone who you think might benefit from this information.