Increasing Severance Chances

Severance After Dismissal: What Counts Now

A termination often comes as a surprise for employees. In addition to uncertainty about their professional future, many immediately ask: Will I receive severance pay? Under German law, there is generally no legal entitlement to severance pay (see the exceptions in the article for more details). Nevertheless, severance payments are frequently made in practice. Why this is the case, under what conditions severance pay may be possible, and what severance amounts are typically achieved in practice are explained in this article.

*where only the masculine form is mentioned in this article, the feminine / diverse form is also included

1. Do I Automatically Have a Right to Severance Pay?

The short answer is: No.

Under German law, there is generally no entitlement to severance pay. Possible exceptions include:

Social plan severance: If a social plan provides for severance payments.
Severance under Section 1a KSchG: If the employer offers severance in the termination letter in case the employee does not file a wrongful dismissal claim.
Court-ordered severance under Sections 9, 10 KSchG: If the dismissal is found to be socially unjustified, but neither party can reasonably be expected to continue the employment relationship, the labor court may terminate the contract and set a severance payment upon request.

A statutory entitlement to severance pay exists only in these limited exceptional cases. Nevertheless, employers often agree to severance payments in practice to avoid lengthy legal proceedings or to reach an amicable settlement.

Therefore, employees should always have the prospects of a wrongful dismissal claim reviewed by a lawyer within the three-week limitation period.

2. Why is severance pay still often paid?

It is true that labor court dismissal protection proceedings often end with a severance payment. This is because employers face significant litigation risk in unfair dismissal cases, as the legal requirements for a valid termination under the German Protection Against Dismissal Act (Kündigungsschutzgesetz – KSchG) are very strict.

To minimize this risk, employers frequently offer severance pay as part of an amicable settlement. This allows them to achieve legal certainty that the employment relationship is finally terminated. In effect, the employer “buys out” of the litigation risk through the severance payment.

As a specialist lawyer in employment law, I assess your chances of receiving severance pay. Contact me now.

3. How high can severance pay be?

As a general guideline, the following rule of thumb is often used:

½ gross monthly salary × years of employment

Example: With a gross monthly salary of €4,000 and employment from 01/04/2021 to 30/05/2026 (5 years and 1 month), this formula results in a severance payment of:

€10,000 gross = €2,000 (½ gross monthly salary) × 5 years of employment

However, this is only an indicative value. The actual amount of severance pay depends on numerous factors, in particular:

the prospects of success of an unfair dismissal claim
the size of the company
the employee’s position within the company
the employee’s age
the length of service
the company’s financial situation

In many cases, significantly higher severance payments can be achieved. What is decisive is not only the prospects of success in potential court proceedings or the existence of a valid reason for dismissal (including in the case of a termination agreement), but also a strategically skilled negotiation approach by your lawyer.

Conclusion: What matters

Whether severance pay is realistic, and in what amount, generally depends on several factors:

the individual case (in particular whether there are valid grounds for dismissal),
a consistent and strategically skilled negotiation approach by your lawyer,
as well as an early legal review within the three-week limitation period.

As a specialist employment lawyer, I am happy to assess the prospects of your individual case and inform you whether and in what amount severance pay may be achievable.

Note: Severance payments are exempt from social security contributions; only income tax is payable.

Please feel free to call me or schedule a consultation appointment.

Contact me

Mohannad Rajab

Jörg Humburg

Ich kann Frau Rechtsanwältin Janina Aue uneingeschränkt empfehlen.

Frau Aue hat mich in meiner Kündigungsschutzklage gegen meinen Arbeitgeber vertreten und das Verfahren mit hoher fachlicher Kompetenz, großem Engagement und hervorragender strategischer Vorgehensweise geführt.

Besonders beeindruckt hat mich, dass sie nicht nur juristisch sehr stark argumentiert hat, sondern auch die richtigen Druckmittel eingesetzt hat, wodurch die Abfindung am Ende deutlich erhöht werden konnte. Während des gesamten Verfahrens fühlte ich mich jederzeit ernst genommen, professionell beraten und hervorragend vertreten.

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Ich kann Frau Aue als Rechtsanwältin im Bereich Arbeitsrecht uneingeschränkt empfehlen. Die Beratung war von Anfang an äußerst kompetent, verständlich und sehr engagiert. Frau Aue hat sich viel Zeit genommen, meine Situation genau zu analysieren und mir alle rechtlichen Möglichkeiten klar zu erklären.

Besonders beeindruckt hat mich ihre fachliche Expertise im Arbeitsrecht sowie ihre strukturierte und lösungsorientierte Vorgehensweise. Durch ihre professionelle Unterstützung fühlte ich mich jederzeit gut beraten und sicher vertreten.

Meine Erwartungen wurden deutlich übertroffen. Wer eine zuverlässige, kompetente und engagierte Anwältin im Arbeitsrecht sucht, ist bei Frau Aue in den besten Händen.

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