German Court Tightens Rules on Mass Dismissals as Manager Joblessness Surges 14%
25.06.2026 - 23:25:32 | boerse-global.de
On April 1, 2026, the judges confirmed that dismissals are permanently invalid if the employer fails to properly notify the employment agency or complete consultation with the works council before acting. Crucially, the defects cannot be fixed retroactively — even if the missing steps are taken later, the original terminations remain void.
The decision, which follows the European Court of Justice’s line, adds a layer of legal risk for companies already navigating a tougher manager job market. In 2025, the number of unemployed executives rose by 14 percent to 49,000, according to labor-market data. Nils Schmidt of the Verband Die Führungskräfte (DFK), an association for managers, cautioned that severance payments typically amount to one month's gross salary per year of service — but only if recipients do not sign rushed agreements.
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Warning Signs for Executives
Legal experts point to several red flags that often precede a planned separation. A promotion to managing director, for instance, ends general dismissal protection under German law. Other indicators include the introduction of a dual leadership structure, removal of budget authority, or a transfer abroad after the age of 50. Managers who spot such moves are advised to secure legal advice early.
Sick Leave Fraud and the Limits of Employer Suspicion
Another area of tension involves employees who fake illness. The average sick leave in Germany hit 17 days in 2025 according to Techniker Krankenkasse, while surveys by Pronova BKK suggest a significant share of workers have called in sick despite being fit to work. Employers can challenge a medical certificate only if they present concrete evidence — a mere suspicion or an announcement that someone intends to call in sick is not enough.
The Labor Court in Nordhausen recently reinforced the high evidentiary value of a properly issued doctor’s note. To shake that value, an employer must produce substantial indications. If the certificate’s weight is nevertheless overturned, the burden shifts back to the employee, who must then release the treating doctor from medical confidentiality or submit to an assessment by the Medical Service.
Return-to-Work Obligations Tighten
Companies also face stricter duties when workers are repeatedly or long-term ill. If an employee is absent for more than six weeks within a single year due to sickness, the employer must offer a return-to-work program (betriebliches Eingliederungsmanagement, or BEM). Failing to do so leaves the employer with a heavier burden of proof in court — it must show that no alternative jobs or workplace adjustments were possible.
The broader picture: German dismissal law is thick with procedural hurdles. Workers have exactly three weeks after receiving a written termination to file a lawsuit — missing that deadline generally means the dismissal stands from day one. Experts advise employees to also claim outstanding overtime, unused vacation days, and a detailed reference letter without delay. For employers, the BAG’s April 1 ruling makes it clear that mass layoffs leave no room for procedural shortcuts.
