New German Labour Rulings Raise the Bar for Employers on Parental Leave and Termination Notices

Employers in Germany who rely on Deutsche Post’s modernised recorded-delivery service to prove a dismissal was received can no longer assume the documentation will hold up in court. The Federal Labour Court (BAG), in a decision dated 7 May 2026 (Case 2 AZR 184/25), ruled that the current scanning procedure does not constitute prima facie evidence of actual delivery.

The problem lies in the timing: the postal worker scans the item to document the drop-off before it is physically placed in the letterbox. A signature therefore confirms only that the scan happened, not that the envelope actually landed inside. In the case before it, the employer had dismissed a worker with a long-term illness via this method. The court recommended alternatives such as personal handover in the presence of witnesses, courier services, or delivery by a court bailiff. It also stressed that a compulsory return-to-work process (betriebliches Eingliederungsmanagement, or bEM) must be re-offered even if the employee had previously turned down an earlier procedure.

A parallel June ruling addressed a different vulnerability: gaps in protection for employees who split their parental leave into separate blocks. The BAG (18 June 2026, Case 2 AZR 213/25) shut down an employer’s attempt to dismiss a worker during an interval between two pre-approved leave periods. The court held that the protective effect of the Federal Parental Allowance and Parental Leave Act (BEEG) begins as soon as the employee registers the leave—provided the application was made in time. The ruling covers the in-between phases too, preventing companies from exploiting the flexibility parents are allowed in scheduling their time off.

On the financial side, the BAG has tightened employers’ obligations around leave and variable pay during parental leave. A judgment from 16 April 2024 (Case 9 AZR 165/23) mandates that employers must pay out untaken vacation days if they failed to explicitly shorten the leave entitlement while the employment relationship was active. The case involved 146 days of accrued leave worth more than €24,000 gross. Employers are generally allowed to reduce holiday by one-twelfth for each full calendar month of parental leave, but they must issue an explicit declaration to that effect. Cuts for partial months have been prohibited since a 2011 decision.

Variable pay and bonuses during parental leave may be reduced proportionally, the court confirmed. Even if no company-level agreement covers the issue, employers can cut target-linked compensation because no work means no claim to performance-based pay.

Communication between parents and employers has become simpler since 1 May 2025, thanks to the Fourth Bureaucracy Relief Act (BEG IV). Parental leave and part-time work requests are now accepted in text form—email, for example—and the employer’s reply can be given the same way. The notification deadlines remain: seven weeks for children under three, 13 weeks for children between three and eight.

Looking ahead, the federal cabinet plans notable changes from 2027. Dismissal protection for top earners—those with a monthly gross salary of around €15,000—is set to be loosened. Experts are split on the impact. The Institute for Employment Research (IAB) warns it could stifle career progression; the German Institute for Economic Research (DIW) calls the reform largely symbolic, as it affects only a tiny fraction of workers. Also slated for 2027 are new rules on fixed-term contracts without objective grounds, which could allow such contracts to run for up to 48 months.

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