The Kündigungsschutzklage: What It Protects and Who Can Sue

In Germany, a dismissal that is not socially justified can be challenged through a Kündigungsschutzklage – a dismissal protection lawsuit. Employees covered by the Protection Against Dismissal Act (KSchG) must act fast: the claim must be filed with the competent labour court within three weeks of receiving the written notice. If the deadline passes, even an unlawful dismissal becomes legally effective.

Two key conditions must be met for the KSchG to apply. The employer must have more than ten full-time employees – part-timers count proportionally – and the employment relationship must have lasted at least six months. However, even when these thresholds are not met, a dismissal can still be invalid for other reasons, such as a formal defect. In such cases, a labour court challenge can still succeed.

If the court finds the termination was unlawful, the employee is entitled to default wages (Verzugslohn) – the salary they would have earned from the dismissal date until the end of the proceedings. Any income earned from a new job during that period is deducted from the back pay under §615 of the German Civil Code (BGB). The majority of these lawsuits never reach a judgment; the initial conciliation hearing frequently ends with a settlement that includes a severance payment.

Why Your Post-Dismissal Job Hunt Now Decides the Payout

While the right to back pay may sound straightforward, recent developments have made the process more demanding for employees. The real battleground is not whether the dismissal was unfair, but what the former employee has done to find a new job.

The Burden of Proof Has Shifted Onto the Worker

Under §615 BGB, anyone who “wilfully omits” to seek new employment must accept a reduction of the default wage by a notional income. Historically, employers had to prove that suitable vacancies existed and the dismissed employee had deliberately ignored them – a high legal hurdle. That is no longer the case. The Federal Labour Court has tightened the rules: today, employees are expected to demonstrate that they made genuine, sustained efforts to find a new job. If a dismissed worker cannot show a documented job search, the court will presume they could have found work and will reduce the Verzugslohn by an estimated salary.

The 2025 Lower Saxony Ruling: A Clear Signal

A decision by the Lower Saxony Regional Labour Court (5 SLa 465/25) illustrated how strictly this can be applied. After a summary dismissal, the court granted the employee just one week as a “grace period” before he was expected to start applying. Because he waited a further four weeks to send out applications, his wage claim was cut drastically. While the one-week figure is not enshrined in law and the judgment is a single instance, the message is unmistakable: speed and seriousness matter.

Active Job Hunting Strengthens Your Severance Negotiation

The majority of dismissal protection suits settle before a verdict, and a strong default wage claim is a powerful lever. “An entitlement to Verzugslohn is a key bargaining chip for the employee,” says Cologne employment lawyer Nathalie Oberthür. If the former employer sees that the dismissed person has left no openings for a böswillig omission argument, the risk of a large back-pay award increases sharply – and so does the willingness to pay a higher severance.

What Every Wrongfully Dismissed Employee Must Immediately Do

  • File the lawsuit within three weeks. The clock starts when the written dismissal arrives. Miss this deadline and the termination becomes final, regardless of its legality.
  • Register as a jobseeker immediately. Notify the Arbeitsagentur (German employment agency) straight away and accept any reasonable placement suggestions or job offers they send.
  • Start applying without delay. In a summary dismissal, begin sending applications within days. In a notice-period dismissal, be ready to apply no later than the end of the notice period. Document every application, interview and rejection.
  • Apply broadly, including to jobs without a stated salary. Current case law does not oblige you to apply to vacancies that conceal the pay – but employment lawyers like Oberthür advise doing so as a safeguard, in case labour courts later tighten expectations.
  • Document your entire preparation effort. Keep records of CV updates, application photos, cover letters, job portal searches and any career coaching. The more you can prove a genuine, thorough job hunt, the harder it becomes for the employer to argue that you wilfully avoided new work.
  • Treat the search as a negotiating asset. A well-documented, rigorous job hunt not only preserves your full back-pay claim but also puts maximum pressure on the former employer to agree to a meaningful severance package at the conciliation stage.