Termination by the employer: In these cases, the employee is entitled to a severance payment

A severance payment is a one-time, extraordinary payment that can be paid to the employee by the employer upon termination of the employment relationship. It can provide enormous relief, because it allows employees who have been made redundant to bridge a certain period of time and compensate for the lack of incoming payments. One often reads and hears about rich, high five or even six-figure severance payments. But when can you claim a severance payment?

right to severance pay

As a rule, there is no legal entitlement to a severance payment. But that does not necessarily mean that the door to a severance payment has closed. A single statutory regulation on severance pay can be found in Section 1a of the Dismissal Protection Act (KSchG). According to this, the employee is entitled to a severance payment if there is a termination for operational reasons and the employer allows the legal period to expire. Here the employee has to decide for himself whether he wants to accept the termination and claim the severance payment or fight for his job and file a lawsuit. A mandatory requirement for the severance payment entitlement is a termination for operational reasons. The employer should point out to the employee in the notice of termination for operational reasons that he will receive severance pay if he does not take legal action against unfair dismissal.

Compensation after a dismissal protection suit

Such an action for protection against unfair dismissal can be filed for any type of termination. However, the law only regulates severance pay in the event of a termination for operational reasons and the associated suspension of the period.

In principle, the employee pursues the goal of being reinstated with an action for protection against unfair dismissal. For example, if the court classifies the dismissal as socially unjustified under the Dismissal Protection Act. However, if reinstatement is deemed unreasonable for the employee, severance pay may be ordered by judgment.

Unreasonability can exist if, for example, the relationship of trust has been shattered in the course of the legal dispute against unfair dismissal, the employer has made defamatory statements about the employee or his behavior or there is a possibility that the employee would not be treated properly if he returned to the company.

Severance pay through individual regulations in the employment contract

A look at the employment contract can also be recommended for the right to a severance payment. There may be an individual regulation on a potential severance payment that guarantees the employee a severance payment under certain circumstances or conditions. In addition, social plans, collective bargaining agreements and management contracts may contain provisions on severance payments.

Compensation by termination agreement

In practice, according to arbeits-abc.de, termination agreements are more common. After all, the employer is aware that he cannot terminate the employee without reason and that the latter enjoys strict statutory protection against dismissal in this country. He therefore offers him the voluntary termination of the employment contract in return for payment of a corresponding severance payment. Here, however, the employee must be careful, because this can block the unemployment benefit that he would normally be entitled to.

If the employee is dismissed as a result of a social plan or a change in the company, he is entitled to a severance payment to compensate for the disadvantages he has suffered as a result.

Philipp Beißwanger / Editor finanzen.net

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