Redundancy dismissal – your rights and how to challenge it

This article describes the legal position under German law.

I. The typical situation

The company announces a restructuring – sites are closed, departments merged, positions cut. Suddenly you receive a redundancy dismissal (betriebsbedingte Kündigung): „Your position no longer exists, we have to let you go.“ Most employees accept the dismissal and resign themselves to it – yet many redundancy dismissals are flawed. An incorrect social selection process, no genuine operational grounds or formal errors can render the dismissal invalid. Those who know their rights and act quickly can either overturn the dismissal or negotiate a considerably higher severance payment.

II. What is a redundancy dismissal in legal terms?

A redundancy dismissal applies where urgent operational requirements prevent continued employment (section 1(2) of the German Dismissal Protection Act, KSchG). Typical grounds include a drop in orders, site closure, rationalisation measures, restructuring or outsourcing. The employer must demonstrate three stages:

Stage 1 – the business decision:

The employer makes a strategic decision (for example closing a branch or discontinuing a product line). In principle this decision cannot be reviewed by a court – businesses have freedom to organise themselves.

Stage 2 – loss of the need for the role:

The business decision must necessarily result in the loss of positions. If a department closes, the need for those roles disappears. The employer must show that the specific position is permanently gone – not just temporarily.

Stage 3 – social selection (Sozialauswahl):

Where several comparable employees exist, the employer must dismiss the one least in need of social protection. The criteria are length of service, age, maintenance obligations and severe disability (section 1(3) KSchG). A flawed social selection makes the dismissal invalid.

The employer must also check whether you could continue working in another vacant position – if necessary on changed terms or after reasonable retraining.

III. Common mistakes and misconceptions

Mistake 1: accepting the social selection without checking it

Most employees never check whether the social selection was carried out correctly. In practice errors are common: the wrong comparison group (not all comparable employees were included), incorrect social data (length of service or maintenance obligations miscalculated), or arbitrary retention of „key performers“ without objective criteria. Even small errors can invalidate the dismissal.

Mistake 2: not requesting information on the social data

You are entitled to find out which employees were included in the social selection and which criteria were applied. Without this information you cannot review the selection. Request the information in writing – ideally through a lawyer as part of an unfair dismissal claim.

Mistake 3: not checking the works council consultation

The works council must be properly consulted before every dismissal (section 102 of the Works Constitution Act, BetrVG). If the consultation did not take place, or the works council received incomplete information, the dismissal is invalid. Many employees never ask whether and how the works council was consulted.

Mistake 4: not checking the social plan

Where operational changes involve mass redundancies there is often a social plan (Sozialplan, section 112 BetrVG). It governs severance payments, transitional allowances or retraining. Many employees are unaware of their entitlements or settle for lower amounts. Ask the works council for the social plan and check what you are owed.

Mistake 5: not questioning alternative employment

The employer must check whether vacant positions exist within the company – including at other sites, in other departments or at a lower level. If such roles exist and were not offered to you, the dismissal is invalid. This check is often carried out superficially or not at all.

Mistake 6: missing the three-week deadline

An unfair dismissal claim must be filed with the labour court within three weeks of receiving the dismissal (section 4 KSchG). After that the dismissal is deemed valid – even if it was plainly unlawful. Many employees hesitate too long or underestimate the deadline.

Mistake 7: accepting the dismissal out of fear or embarrassment

„I don’t want to harm the company“ or „I don’t want a fight“ – thoughts like these stop people from pursuing legitimate claims. An unfair dismissal claim is your right, not a personal attack. Employers factor claims in and negotiate a severance settlement in more than 70% of cases.

IV. Concrete steps

Step 1: read the dismissal letter carefully

Are specific operational grounds given? Is the notice period calculated correctly? Is the letter signed? Missing details or vague wording („for operational reasons“) are warning signs.

Step 2: gather information

Talk to colleagues: were other dismissals issued? Are new staff being hired or existing staff promoted? Are positions genuinely being cut, or merely redistributed? Document everything in writing – emails, minutes, witness accounts.

Step 3: check the works council and social plan

Ask the works council: were they consulted? Is there a social plan? What severance payments does it provide for? Request a copy and check whether your entitlement has been calculated correctly.

Step 4: establish the social data and comparison group

Draw up a list: which colleagues do comparable work? How old are they? How long have they been with the company? Do they have maintenance obligations? Are any severely disabled? Compare your social data with that of colleagues who were not dismissed. If you are worse off, the social selection is flawed.

Step 5: check for alternative positions

Research: is your company advertising roles? Are there vacancies at other sites? Have new staff been hired recently? Ask the employer in writing for information on vacant positions.

Step 6: file the claim within the deadline

Instruct an employment lawyer within the first week after receiving the dismissal. The claim must reach the labour court no later than three weeks after receipt. Even if you are willing to negotiate: file the claim – it strengthens your position considerably.

Step 7: develop a negotiating strategy

Define your goal: continued employment or severance? If severance, what is your minimum? Your lawyer will build a strategy based on the prospects of the claim, your social data and the operational circumstances.

Step 8: use the conciliation hearing strategically

The conciliation hearing (Gütetermin) usually takes place four to eight weeks after the claim is filed. The court will try to broker an agreement. In more than 70% of cases a severance settlement is reached. Your lawyer negotiates on the basis of the prospects of success – the stronger your position, the higher the payment.

Step 9: get professional advice from day one

Have the dismissal reviewed by an employment lawyer immediately. The earlier you act, the more room you have. An initial consultation clarifies prospects, costs and strategy – and prevents expensive mistakes.

V. Frequently asked questions

1. Do I have to accept a redundancy dismissal?

No. Have the dismissal checked for validity – many redundancy dismissals are flawed. An unfair dismissal claim can invalidate the dismissal or lead to a severance payment.

2. What is social selection?

Where several comparable employees exist, the employer must dismiss the one least in need of social protection. The criteria are length of service, age, maintenance obligations and severe disability.

3. How high is severance in a redundancy case?

That depends on your prospects in an unfair dismissal claim. The usual range is 0.5 to 1.0 gross monthly salaries per year of service – more where dismissal protection is strong.

4. Can I review the social selection?

Yes. Request information on the comparison group and the criteria applied. Your lawyer will check whether the selection was carried out correctly.

5. What happens if the dismissal is invalid?

You are entitled to continued employment and back pay from the termination date. In most cases the parties agree on a severance settlement.

6. Is an unfair dismissal claim worth it?

In most cases yes. Even where the dismissal is formally correct, the claim often leads to a higher severance payment. The success rate is above 70%.

VI. What you should do now

A redundancy dismissal is not the end – it is often the start of a negotiation. Without a legal review you give away the chance of continued employment or an appropriate severance payment. The three-week deadline runs regardless – every day counts.

Have your redundancy dismissal reviewed professionally. We analyse the operational grounds, check the social selection for errors, examine the works council consultation and assess your prospects in an unfair dismissal claim. You receive a clear recommendation: pursue continued employment, negotiate severance, or accept the dismissal – with concrete figures and a realistic assessment.

Get in touch for a personal review of your redundancy dismissal – so that you protect your rights and get the most out of the situation.

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Andreas Schruff is a partner at the law firm KBS Legal in Munich and a cooperation partner of abfindungshero.de