In times of economic crisis, business restructuring, or company shutdowns, employers may resort to large-scale layoffs. In Germany, this is referred to as a mass dismissal or mass redundancy (Massenentlassung). However, employers cannot simply terminate large numbers of employees without following a formal and strictly regulated process. If you’re affected by a mass dismissal in Germany, it’s essential to understand your legal rights, the employer’s obligations, and what role works councils and the employment agency play in protecting workers—especially in collective termination scenarios. This article provides a comprehensive overview of mass redundancy procedures, required notifications, and the rights of employees involved in large-scale layoffs.
1. What Is Considered a Mass Dismissal?
Under German law, a mass dismissal (also called a mass redundancy) refers to the termination of a significant number of employees within a short period of time, usually triggered by:
- Business closure or downsizing
- Relocation of operations
- Mergers or acquisitions
- Economic hardship or insolvency
📌 The legal definition is based on specific thresholds outlined in Section 17 of the Protection Against Dismissal Act (Kündigungsschutzgesetz – KSchG).
2. Legal Thresholds for Mass Redundancy Notification
Employers are legally required to notify the Federal Employment Agency (Agentur für Arbeit) if they intend to terminate:
| Company Size | Number of Dismissals Triggering Notification |
|---|---|
| 21–59 employees | 6 or more terminations within 30 days |
| 60–499 employees | 10% or at least 26 employees |
| 500+ employees | 30 or more terminations |
📌 The 30-day period begins when the first notice is delivered.
3. Difference Between Mass Dismissal and Individual Dismissal
| Individual Dismissal | Mass Dismissal |
|---|---|
| Based on personal, conduct, or operational grounds | Based on collective operational decisions |
| No agency notification required | Requires formal notification to the employment agency |
| Less structured process | Strict consultation, timing, and documentation required |
| Affects one or a few people | Affects a significant portion of the workforce |
4. Employer Obligations in Mass Redundancy
When planning a mass dismissal, employers must follow a structured legal process, including:
✅ 1. Notification to the Employment Agency
- Must occur before notices are issued
- Includes detailed information (number of dismissals, timing, reasons, social criteria)
✅ 2. Consultation with the Works Council (Betriebsrat)
- The employer must inform and consult the works council in writing
- A social plan (Sozialplan) is often negotiated
- The works council can object to dismissals or negotiate better terms
✅ 3. Observance of Statutory or Contractual Notice Periods
- Even in mass layoffs, standard notice periods apply
- Special protection rules for pregnant employees, those on parental leave, or severely disabled persons remain in effect
✅ 4. Individual Termination Notices
- Each employee must still receive a written termination notice
- The termination must be socially justified under Section 1 KSchG
5. What Is a Social Plan (Sozialplan)?
In large-scale redundancies, employers and works councils typically negotiate a social plan to mitigate negative effects on employees.
It may include:
- Severance pay formulas
- Extended notice periods
- Retraining or outplacement services
- Support for relocation or job search
- Early retirement options
📌 A social plan is not mandatory by law—but often required by collective agreements or court decisions.
6. Severance Pay in Mass Dismissals
While there is no statutory right to severance in Germany, mass redundancy cases often involve:
- Voluntary severance packages
- Negotiated settlements via the works council or labor court
- Payment based on: 0.5 × monthly gross salary × years of service
Use our Severance Pay Calculator to estimate what you may be entitled to.
7. Employee Rights During Mass Dismissals
Employees affected by a mass dismissal are entitled to:
✅ Advance notice of termination
✅ Equal treatment in selection (social selection criteria apply)
✅ Written explanation on request
✅ Representation by the works council
✅ Legal protection under the Protection Against Dismissal Act
✅ Right to challenge the dismissal in labor court
📌 Don’t assume your dismissal is valid just because others are affected. You can challenge it individually.
8. What Is the Social Selection (Soziale Auswahl)?
When selecting employees for dismissal, employers must apply social criteria such as:
- Length of service
- Age
- Maintenance obligations (e.g. children)
- Severe disability or health conditions
The selection must be documented and defendable. If it’s arbitrary or unfair, affected employees may sue and win reinstatement or severance.
9. Special Considerations for Expats
Expats involved in mass redundancies should be aware of:
- Residence permit status: Losing your job may impact your right to stay
- Blue Card holders have up to 3 months to find new employment
- Severance payments may affect tax residency or benefits abroad
- Inform the immigration authority (Ausländerbehörde) promptly
📌 Consider consulting both an employment lawyer and an immigration specialist if you’re affected.
10. How to Respond as an Employee
✅ Don’t panic—mass dismissals don’t override your legal rights
✅ Review the termination letter carefully
✅ Contact your works council or union
✅ File a dismissal protection claim within 3 weeks
✅ Consult a labor lawyer for severance or reinstatement options
✅ Register with the employment agency immediately to avoid benefit delays
Conclusion
A mass dismissal in Germany is a highly regulated process that offers substantial protection to employees. If you’re part of a mass redundancy, remember: every employee has the right to be treated fairly, to challenge termination, and—often—to receive severance compensation.
Don’t hesitate to seek legal advice and act quickly. Whether you’re a local employee or an international professional, German labor law protects you—even in large-scale layoffs.
