Germany Scraps Phone Sick Notes, Loosens Dismissal Rules in Sweeping Labour Overhaul
Published on 07/03/2026 at 14:46 | Redaktion boerse-global.de
From January 2027, workers in Germany will be required to produce a doctor’s certificate from the very first day they call in sick, ending the pandemic-era practice of a telephone-based sick note. The change is one of 34 measures adopted by the federal government in a labour-law reform package that also weakens dismissal protection for high earners and dramatically extends the scope of fixed-term contracts.
Under the new rules, employees earning at least €177,450 a year – equivalent to 1.75 times the 2026 social-security contribution ceiling – can be let go for any reason provided the employer pays a severance. The condition applies from 1 January 2027 and is designed to make restructuring easier. The coalition plans to give such severance payments favourable tax treatment as long as the affected worker finds a new job quickly.
The maximum duration of fixed-term contracts without a specific reason will double from 24 to 48 months. Within that window, employers will be allowed to extend the contract up to six times. The relaxed rules apply to anyone hired before the end of 2030. Additionally, from January 2027 written form will no longer be required for fixed-term agreements – oral or electronic consent will suffice.
On the tax side, the government plans relief worth around €10 billion a year for low and middle-income earners, starting in 2027. Child benefit adjustments and changes to the top tax rate for high earners are also part of the package.
Labour-market economist Simon Jäger called the easing of strict dismissal rules a necessary step, arguing that while strong protection is sensible, it can block essential restructuring in times of economic upheaval.
Employers welcomed the broad reform. Rainer Dulger, head of the Confederation of German Employers’ Associations, described it as a long-overdue change of direction. Gabriel Felbermayr, a member of the German Council of Economic Experts, called the adjustments for high earners a fair compromise.
But unions reacted with fury. IG Metall chairwoman Christiane Benner said the package mixes welcome tax measures with damaging cuts to workers’ rights, particularly the expansion of fixed-term contracts and the dilution of dismissal protection. Frank Werneke, head of the ver.di service-sector union, attacked the stricter sick-note rules as a sign of growing distrust toward employees. DIW president Marcel Fratzscher dismissed the whole plan as a symbolic package unlikely to deliver any major economic breakthrough.
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