Germany has amended laws on protection against unfair dismissal and on
fixed-term work, which should make it more attractive and affordable to employ
people in the country.
Under current law, protection against unfair dismissal is only available for
staff who work in organisations with more than five employees, and who have
been employed with the same employer for at least six months.
From 1 January, the ‘five-employees limit’ will be modified and up to five
fixed-term employees, whose employment starts after 1 January 2004, will not
count towards the limit.
This means employers that currently employ five workers will be able to
employ more without the law on unfair dismissal being applicable.
Alternatively, they could appoint six fixed-term staff who work no more than
30 hours a week, 10 who work no more than 20 hours a week, or a combination –
as long as they are fixed-term and the threshold total of five full-time staff
is not exceeded.
Other changes mean that when employers terminate employment for operational
reasons (similar to redundancy), they will be able to offer a ‘statutory
compensation payment’ if the employee decides not to file a complaint for
This statutory compensation payment is equal to a half-monthly gross salary
per year of employment. It is then up to the worker to decide whether to take
court action, bearing in mind that if the dismissal is held to be justified,
they might leave the court empty handed.
Martin Fischer, of the German British Chamber, said: "The new rules in
connection with the termination of employment will make consequences of
redundancy more predictable. The additional costs caused by judicial
proceedings will now be saved in many cases," he said.