Act Now or Lose It: German Court Clamps Down on Mass-Dismissal Formalities as Coalition Loosens Small-Firm Protection
Published on 07/06/2026 at 03:25 | Redaktion boerse-global.de
Germany’s highest labour court has sent a stark warning to employers: skip a step in the mass-dismissal process, and every single termination fails. The same week, the black-red coalition unveiled plans to let companies with up to 49 staff fire without giving any social reason – a reversal that pits legal rigour against political pragmatism.
Two verdicts, one message: procedure is everything
On 1 April 2026, the Federal Labour Court (BAG) issued twin rulings (6 AZR 152/22 and 6 AZR 157/22) that effectively raise the bar for collective redundancies. Dismissals are invalid if the mandatory mass-dismissal notification to the employment agency is missing – or filed too early, for instance before consultations with the works council have finished.
The logic is unforgiving: without a correct notification, the statutory dismissal-blocking period never starts running. A March decision by the court’s Second Senate (2 AS 22/23) had already shut the door on any subsequent correction. The strict line flows from the European Collective Redundancies Directive and the case law of the European Court of Justice.
For employees, the practical takeaway is simple: anyone who files an unfair-dismissal claim within three weeks can win purely on a procedural mistake. The termination is void from the outset.
Coalition pushes the other way
While the courts tighten one door, the government is opening another. The ruling coalition plans to raise the small-business exemption from 10 to 50 workers. In practice, this means that firms with 11 to 49 employees would no longer have to justify dismissals on social grounds.
Exceptions remain for pregnant women, severely disabled people and works council members – their special protection stays untouched.
A second package, announced in early July 2026, targets high earners. Employees with an annual salary of around €177,450 could be eased out more easily with a severance payment from 1 January 2027.
Other planned changes include:
- Sick notes: a medical certificate must be presented from the first day of illness; the telephone sick-note procedure ends
- Fixed-term contracts: non?justified temporary contracts can last up to 48 months for new hires until the end of 2030
- Mini?jobs: the flat?rate tax rises from 2 to 5 percent
A signed severance agreement – and then nothing
A case from Solingen shows that even a signed settlement can collapse. One employee was entitled to a gross severance payment of €415,748 – and lost every cent.
After concluding the termination agreement, he misused the company’s internal purchasing system for private orders and falsely claimed they were business?related. The Solingen Labour Court (3 Ca 1629/25) ruled this a fundamental disturbance of the contract’s base under Section 313 of the German Civil Code (BGB). The payment was cancelled.
International compensation cases also made headlines. In the Netherlands, Lidl must pay €170,000 to a former store manager whose summary dismissal for alleged time?theft was deemed disproportionate. In Italy, a hotel worker received €60,000 because her dismissal after only five days on probation was invalid – the employment relationship had effectively started before the contract was signed.
Social selection remains the biggest trip?wire
“Social selection is still the most frequent source of error in operational redundancies,” warns employer?side lawyer Alexander Birkhahn. Companies often unlawfully include performance criteria in the selection matrix. Grouping by age brackets, by contrast, is used deliberately to reshape the workforce.
In the industrial sector, the pressure is mounting. At Zalando’s Erfurt site, negotiations over a social plan for roughly 2,100 affected employees are due in the coming days. Frank Sell, chair of Bosch’s works council, is demanding a political task force for the automotive industry – a reflection of massive cost?cutting, job reductions and the first loss in Bosch Mobility in more than 15 years.
For individual dismissals, behavioural reasons are gaining prominence – violations of home?office obligations or irregularities in expense reports are increasingly cited.
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