German High Earners Face Weaker Job Protections Under 2026 Reform Package
Published on 07/22/2026 at 07:22 | Redaktion boerse-global.de
A series of recent rulings from Germany’s Federal Labor Court (BAG) and new legislative initiatives are reshaping the balance of power between employers and works councils. The changes touch everything from how job postings are written to how bonuses are calculated — and who can be fired more easily.
Job Ads Must Now Include Exact Hours
A BAG decision from September 2025 tightens requirements for internal job postings. Employers must specify the exact working hours alongside the job description and qualifications. Without that detail, the posting is considered incomplete.
That gives works councils a powerful tool. Under Section 99, Paragraph 2, Number 5 of the Works Constitution Act (BetrVG), they can block a hiring decision if the hours were missing. The court also ruled that automated filters in recruitment software cannot fix the omission. However, the employer does not need to re-advertise the position, as long as their intent to fill it remains clear.
Mass Layoff Rules Get Slightly Easier — But Not Much
In June 2026, the BAG loosened requirements for mass layoff notifications — but only slightly. Minor inaccuracies, such as overstating the number of workers to be let go, no longer automatically invalidate the dismissals. The key test is whether the protective purpose of the procedure was preserved.
Errors in the consultation letter sent to the works council are also harmless if they were obvious to the employee representatives. But the court drew a hard line on fundamental failures: a dismissal without the required notification or before the consultation process ends remains void.
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Disabled Workers’ Elections Loom for Autumn
Many companies face an organizational challenge this fall. Under Section 176 of the Social Code IX, any workplace with at least five severely disabled or equivalent employees must elect a representative body (SBV). Those elections are scheduled for autumn 2026.
The SBV participates in works council meetings in an advisory capacity. Works council members can also run for SBV positions. In some industries, enforcing these structures remains a legal battle. Food manufacturer Nutracorp, after multiple court proceedings, was forced by the Elmshorn Labor Court to accept the appointment of an election committee.
Bonus Deadlines: Miss Them and Pay Up
An April 2026 BAG ruling brings clarity to variable compensation. Employers violate their obligations if they fail to communicate corporate targets for bonus payments on time. If the targets are not announced by the end of the measurement period, employees can claim damages.
In the case at hand, the court awarded the employee a bonus based on 100-percent target achievement — even though the actual company result was far below that. The judges also banned framework agreements that switch back and forth between negotiated targets and unilateral directives. Employers must commit to one model.
Job-to-Job Trial Period and Weaker Protections for Top Earners
The federal government passed several reform packages in July 2026. The Job-to-Job Trial Law allows employees to work for up to four weeks at a new employer on a trial basis without terminating their existing contract.
A second package, dated July 2, 2026, proposes loosening dismissal protection for high earners — those with annual gross income of roughly €177,500 or more. Starting in January 2027, employers would find it easier to end the employment relationship in exchange for a severance payment. That law has not yet been passed. At the same time, fixed-term contracts without a specific reason would become possible for up to four years.
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