German Managers' Associations Push Back Against Plan to Weaken Dismissal Protection for High Earners
Published on 07/01/2026 at 22:04 | Redaktion boerse-global.de
Two major German managers' associations have launched a coordinated protest against government proposals to relax dismissal protection, arguing that leadership responsibility requires stable legal safeguards rather than market-driven flexibility.
The VAA, a union for executives representing roughly 30,000 members, sent an open letter to the state premiers of North Rhine-Westphalia, Bavaria, Hesse and Hamburg. Managing Director Stephan Gilow warned bluntly that an employee's need for protection cannot be measured by income level. The ULA (German Managers' Association) separately wrote to Chancellor Merz, Labour Minister Bas and Economy Minister Reiche, insisting that strategic responsibility demands reliable legal backing. Stable worker rights, the ULA argued, are a success factor, not a brake on competitiveness.
The conflict comes as the coalition committee meets Wednesday in the Chancellery to debate a package of changes. Central to the proposals is a so-called "founder protection zone" for startups, under which young companies could be exempted from certain dismissal rules for four years. Another model would raise the threshold for small businesses — exemptions for firms with up to 50 employees are under discussion. A third prong targets high earners: economist Simon Jäger proposes loosening protections from an annual salary of 77,000 euros, while other experts cite figures between 100,000 and 150,000 euros. The stated goal is to boost innovation and speed up corporate adjustment processes.
The governing parties remain divided. The Union is pushing for reforms, while the SPD has signaled openness to a four-year pilot but faces resistance from its own left wing. Verdi chief Frank Werneke has already threatened protests. Additional support for change comes from the CDU's Economic Council; its secretary-general Wolfgang Steiger is calling for employees earning above the social security contribution ceiling — 8,450 euros gross per month in 2026 — to be allowed to negotiate a severance agreement rather than retain dismissal protection. The council is also pushing for a switch from daily to weekly maximum working hours.
Negotiation results are not expected before Thursday. Also on the agenda is a tax reform aimed at relieving lower and middle incomes. In the broader debate, experts point to the Danish model but warn that greater labour-market flexibility there is paired with strong social security.
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