German Courts Tighten Screws on Employers: One Missed Filing or Flawed Delivery Can Void Dismissals
21.06.2026 - 07:44:57 | boerse-global.de
A string of recent labour court rulings has turned routine procedural steps into landmines for German employers. From mass layoff notifications to the way termination letters are handed over, minor errors now carry outsized consequences—including permanently void dismissals and unexpected liability for back wages.
The highest stakes surround mass redundancies. In multiple judgments handed down on 1 April 2026, the Federal Labour Court (BAG) made clear that if an employer files the required mass-dismissal notification with the employment agency either too early or not at all, the resulting terminations are void with no chance of correction. Crucially, this applies even when the employer has not yet completed the legally mandated consultation process with the works council. The BAG’s stance follows a ruling by the European Court of Justice from October 2025.
The same principle applies to workplace safety: incomplete or missing risk assessments can expose employers to significant liabilities. With hazardous substances in particular, UK law requires thorough documentation under COSHH regulations. A free toolkit provides 43 customisable templates and checklists to help you stay compliant. Download the free COSHH Risk Assessment Toolkit
Under section 17 of the German Protection against Dismissal Act (KSchG), notification is triggered by specific thresholds:
- In workplaces with 21 to 59 employees: more than five dismissals within 30 days.
- In workplaces with 60 to 499 employees: at least 10 percent of the workforce or more than 25 people.
- In workplaces with 500 or more employees: from 30 dismissals onward.
A parallel ruling from the BAG on 7 May 2026 has also undercut the reliability of so-called “Einwurf-Einschreiben”—registered letters dropped into the recipient’s mailbox. The court found that postal carriers now increasingly digitise delivery records and often produce only scans rather than signed receipts. As a result, a proof-of-postage slip no longer guarantees legally valid proof that the letter arrived. Employers who rely on this method risk having to pay so-called acceptance-default wages if the employee denies receipt. Courts now recommend personal handover or delivery by a messenger.
Beyond dismissal procedures, employers face new traps in business acquisitions. Section 38 of the Austrian Business Code (UGB)—note: the German equivalent applies similarly—holds that anyone who buys, leases or inherits a business is generally liable for its pre-existing debts. A legal clarification from mid-June 2026 confirms that this liability applies regardless of whether the new owner keeps the company name. The seller, by contrast, remains liable only for debts that fall due within five years of the transfer, as set out in section 39 UGB. Effective exclusion of liability is possible only under very narrow conditions.
On the tax side, the Federal Ministry of Finance updated its definition of a permanent establishment with a directive dated 18 June 2026. A business location now qualifies as a permanent establishment under section 12 of the German Fiscal Code only if it has a physical facility fixed in location and time—at least six months—and if the entrepreneur has actual control over it. The guidance explicitly addresses modern work arrangements, including home offices, influencer activities and representative offices, aligning with the OECD Model Tax Convention standards.
Another court decision, this time from the Hessian Regional Labour Court in February 2026, clarified that being unfit for work does not automatically make someone unfit for office in the works council. If a works council member explicitly states they remain capable of performing their council duties despite illness, the chairperson must continue to invite them to meetings.
Keeping your safety documentation complete and up to date helps prevent legal surprises. A free Risk Assessment Toolkit offers 41 ready-to-use templates covering fire safety, manual handling, first aid and lone working – everything you need for comprehensive risk management. Download the free Risk Assessment Toolkit
Finally, digital record-keeping in occupational safety remains a grey area. Since the beginning of 2025, the “text form” has replaced the written form in many areas of labour law, but training documentation is still unsettled. Digital records without handwritten signatures are increasingly accepted, but a planned legislative clarification stalled in the Bundesrat at the end of 2025. Experts caution that online instruction cannot fully replace hands-on training for tasks such as handling hazardous substances.
