German labor law allows termination of employment only under clearly defined legal grounds. One of these is dismissal for personal reasons, known in German as personenbedingte Kündigung. It applies when an employee is permanently unable to fulfill their contractual duties—through no fault of their own.
Unlike dismissals based on misconduct or business restructuring, personal dismissals are sensitive and must meet strict legal requirements. They often involve long-term illness, loss of licenses, or legal restrictions that make continued employment impossible.
This article explains when a dismissal for personal reasons is legally justified in Germany, what rights employees have, and what expats should watch out for.
Content
- 1. What Is Dismissal for Personal Reasons?
- 2. Common Examples of Personal Reasons
- 3. Legal Conditions for Valid Dismissal
- 4. Long-Term Illness and Termination
- 5. Procedural and Formal Requirements
- 6. Special Protection and Restrictions
- 7. Legal Remedies for Employees
- 8. Severance Pay in Personal Dismissals
- 9. What Expats Should Know
- Conclusion
1. What Is Dismissal for Personal Reasons?
A dismissal for personal reasons occurs when the employee, for individual, non-behavioral reasons, is no longer able to perform their job. These reasons must be:
- Related to the employee’s personal situation or capacity
- Not caused intentionally by the employee
- Permanent or long-term in nature
📌 Dismissals for personal reasons are only legal if the situation is unavoidable and the employer has no reasonable alternative.
2. Common Examples of Personal Reasons
Legally accepted reasons include:
✅ Long-Term Illness or Incapacity
- Serious medical conditions preventing the employee from working for extended periods
- No reasonable expectation of recovery
- Frequent absences that disrupt operations
✅ Loss of Work Authorization
- Residence or work permit expired or revoked (especially for non-EU expats)
- Failure to renew essential legal documentation (e.g. security clearance)
✅ Physical or Mental Inability
- Reduced work capacity due to injury or disability
- Inability to operate required machinery, tools, or vehicles
✅ Loss of Required License or Qualification
- Revocation of a driver’s license (if driving is essential)
- Withdrawal of a professional license (e.g. medical, legal)
📌 Personal lifestyle choices (e.g. moving far away, changing childcare arrangements) are not sufficient grounds for dismissal.
3. Legal Conditions for Valid Dismissal
To justify a personal dismissal, the employer must satisfy all of the following criteria:
1. Negative Forecast
The employee’s condition or situation must be long-term or permanent. A temporary illness or one-time event is not sufficient.
2. Substantial Impact on Work Performance
The personal limitation must significantly impair the employee’s ability to perform essential duties.
3. No Reasonable Alternatives
The employer must examine whether:
- Reassignment to a suitable position is possible
- Workplace accommodations (e.g. reduced hours, modified tasks) can resolve the issue
4. Balancing of Interests
The employer must show that continued employment is no longer reasonable, even after considering the employee’s tenure, age, and personal situation.
📌 Courts evaluate these dismissals carefully and often request medical documentation and internal business assessments.
4. Long-Term Illness and Termination
Dismissal due to illness is one of the most complex personal reasons. Employers must follow a multi-step legal analysis:
- Has the employee been absent repeatedly or for more than 6 months?
- Is a positive health prognosis unlikely?
- Does the absence cause serious disruption or economic burden?
- Have occupational reintegration measures (e.g. BEM – Betriebliches Eingliederungsmanagement) been offered?
📌 Dismissal based on illness is only permitted if all options for reintegration or accommodation have failed.
5. Procedural and Formal Requirements
Even if the reason is valid, the dismissal must also meet all formal criteria, including:
- Issued in writing, signed by an authorized company representative
- States the termination date and applies the correct notice period
- Respects works council consultation (if applicable)
- Considers any applicable special protection rules (e.g. for disabled employees)
📌 Verbal terminations, vague references, or missing signatures render the dismissal invalid.
6. Special Protection and Restrictions
Some employees cannot be dismissed—even for personal reasons—without additional legal steps:
- Severely disabled employees: require prior consent from the Integration Office (Integrationsamt)
- Pregnant employees or those on parental leave: protected by maternity and family leave laws
- Works council members: enjoy extensive dismissal protection
Failure to obtain official approval leads to automatic invalidity of the termination.
7. Legal Remedies for Employees
Employees who believe the dismissal is unfair can file an unfair dismissal claim (Kündigungsschutzklage) within 3 weeks of receiving the notice.
The labor court will examine:
- Whether the personal reason was valid and documented
- Whether reasonable accommodations were considered
- Whether notice periods and formalities were respected
Possible outcomes:
- Reinstatement of the employee
- Negotiated severance package
- Legal confirmation of valid dismissal
8. Severance Pay in Personal Dismissals
There is no automatic entitlement to severance under German law. However, severance is often:
- Negotiated during court proceedings
- Offered voluntarily by the employer to avoid litigation
- Based on standard formulas (e.g. 0.5 monthly salary × years of service)
📌 The actual amount depends on the case specifics and negotiation strategy.
9. What Expats Should Know
For non-EU professionals, a dismissal for personal reasons can affect your:
- Residence permit (if it is tied to employment)
- Health insurance and social security status
- Eligibility for unemployment benefits
Always:
- Review the grounds for dismissal carefully
- Request written documentation of the reason
- Contact a labor lawyer immediately
- Notify the immigration office (Ausländerbehörde) if required
Conclusion
A dismissal for personal reasons is only lawful in Germany when it meets strict legal and procedural standards. Employers must prove that continued employment is no longer possible and that all reasonable alternatives have been considered.
As an expat or international employee, it’s essential to understand your rights and respond quickly. With the right legal advice, you may be able to challenge the dismissal or negotiate a fair settlement.
