German employment law, explained before it gets expensive.
Germany protects employees more strictly than most jurisdictions foreign employers come from — dismissal protection, works councils, codified working conditions. We advise international companies on the employer side only: building the German workforce correctly, managing it lawfully, and restructuring it when the business requires.
Dismissal protection is the system, not the exception
The center of gravity is the KSchG, the Dismissal Protection Act. Once a business regularly employs more than ten employees and the employment has lasted six months, a dismissal is valid only with a reason recognised by sec. 1 KSchG — conduct, person or operational requirements — and German labour courts review that reason in full. The employee has three weeks under sec. 4 KSchG to file a claim, and most dismissals end in negotiated severance not because the law prescribes it, but because litigation risk prices it in. Foreign employers who treat a German dismissal like an at-will termination buy that lesson expensively.
Collective structures add a second layer. From five employees, a works council (Betriebsrat) can be elected; once it exists, hirings, transfers and dismissals require its involvement, and restructurings of any size trigger information, consultation and often social-plan negotiations. Sending staff into Germany has its own regime: the AEntG (Posted Workers Act) makes German minimum working conditions, including the statutory minimum wage, mandatory for employees posted into the country — with documentation duties enforced by audit.
We draft German employment and managing-director service agreements, structure variable pay and post-contractual non-competes, run dismissals and separation negotiations, negotiate with works councils through restructurings, and represent employers before the German labour courts under the ArbGG. The pattern that saves the most money: have the German contract and the file in order before the conflict, because German labour litigation is decided on documentation the employer should have created years earlier.
What we handle — and in which situations.
Services
- Employment contracts — German-law contracts for staff and executives, including variable compensation, IP assignment and post-contractual non-competes.
- Managing-director service agreements — contracts for GmbH directors at the corporate/employment interface, including foreign-appointed directors.
- Dismissals and separations — planning and execution of terminations under the KSchG, severance negotiation, termination agreements.
- Works-council relations — day-to-day dealings with the Betriebsrat, co-determination procedures, shop agreements.
- Restructuring — headcount reductions, reconciliation-of-interests and social-plan negotiations, transfers of undertakings.
- Labour-court litigation — defence of dismissal-protection claims and other employment disputes before the German labour courts (ArbGG).
- Posted workers and hiring setup — AEntG compliance for staff posted to Germany, minimum-wage and documentation duties, onboarding structures for new German operations.
Typical scenarios
- A foreign group opens its first German operation and needs contract templates, working-time setup and a compliant onboarding structure for 20 hires.
- An underperforming country manager must be separated; the KSchG applies and the parent wants a clean exit at a calculable cost.
- Employees of a German subsidiary announce a works-council election and the foreign parent asks what it may and may not do.
- A restructuring will cut 30 of 120 German positions; reconciliation-of-interests and social-plan negotiations with the Betriebsrat are required.
- A dismissed employee files a KSchG claim; the labour-court hearing is in three weeks and the file is thin.
- A foreign parent posts specialists to its German site for a year and needs the AEntG, minimum-wage and documentation questions resolved before they travel.
The legal framework.
How an engagement begins.
First contact
Describe the hiring plan, the conflict or the restructuring. We reply within one business day and offer a free 30-minute orientation call.
Legal assessment
We put the position in writing — dismissal feasibility, restructuring roadmap, contract review — at a fixed fee from EUR 1,500 plus VAT.
Mandate
Ongoing advice and litigation run on hourly rates, fixed fees for defined packages such as contract sets, or a fee agreement under sec. 3a RVG.
Ongoing support
Employment law is continuous. We act as standing German employment counsel for foreign-owned operations — pragmatic, in English, at Mittelstand-compatible rates.
German dismissals are not forbidden — they are formal. The employer who respects the form keeps control of the cost.
Your contacts in this practice.
Clear before the engagement begins.
Employment work is plannable: contracts and policies fit fixed fees, separations and restructurings are scoped per project. You see the model before the work starts.
- Orientation call — 30 minutes, free of charge: feasibility, deadlines, realistic cost frame.
- Legal assessment — a written analysis (dismissal risk, restructuring steps, contract audit) at a fixed fee from EUR 1,500 plus VAT.
- Mandate — hourly rates, fixed fees for contract sets and defined projects, or a fee agreement under sec. 3a RVG.
- Court proceedings — in labour-court litigation the statutory fees under the RVG form the floor; at first instance each party bears its own lawyer costs, which we price into the strategy.
What clients ask first.
Can we simply terminate an employee in Germany?
How much severance does a German dismissal cost?
Our German employees want to elect a works council. Can we prevent it?
Do German rules apply to staff we post to Germany temporarily?
Is our managing director protected like an employee?
Articles on this practice area.
Articles on German dismissal law, works councils and employment structuring appear in our knowledge base.
Building or restructuring a German team? Get the file right first.
German employment disputes are decided on documents written long before the conflict. We reply within one business day.
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