When do you get severance pay?

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If an employee is terminated after a long period of employment, he or she receives a severance payment under certain circumstances. Although this does not result directly from the law, it is often provided for in a works agreement or is negotiated in the course of the termination of the contract. Read here when you can hope for a severance payment with good prospects.

If you lay off for operational reasons, you have a good chance of receiving a severance payment.
If you lay off for operational reasons, you have a good chance of receiving a severance payment. © Jürgen_Burberg / Pixelio

When do you get severance payments from a social plan?

  • If you are employed in a larger company that has a works council, you can usually expect a severance payment from a social plan if you are laid off.
  • This plan not only regulates the conditions for a dismissal, but also the amount of severance pay that an employee receives based on years of employment.

Compensation from contract or court settlement

  • Even in small companies without a works council, your employer can of course make arrangements with you about severance pay in a termination agreement. Your chances are all the better, the more urgently your employer wants to part with you and the worse his chances of a quick, legal dismissal are. Please note, if you conclude a termination agreement with a severance payment agreement, that it must be in writing to be effective!
  • However, the most common case in which an employee receives a severance payment through agreement of the parties is the court settlement.
  • If you bring an action for protection against dismissal before the labor court after your dismissal, submit the court always one to shorten the expensive procedure with an uncertain outcome Settlement proposal. Most of the time, the parties then agree in court to cancel the contract in exchange for a severance payment.
    • Calculate severance pay - the severance pay regulations in the Dismissal Protection Act simply explained

    Anyone who loses their job after many years of activity because of operational reasons ...

Entitlement from the Dismissal Protection Act

As an exception, the Dismissal Protection Act also determines when an employee receives severance pay for two constellations:

  1. To avoid legal action, your employer can offer you severance pay at the same time as the dismissal. According to § 1 a KSchG, this must amount to at least half a month's salary per year of employment. If you do not file a lawsuit within the period of 3 weeks, you can then claim the severance payment.
  2. If, after a successful dismissal protection suit, it is unreasonable for the parties to resume the employment relationship, for example because mutual insults etc. have permanently destroyed the relationship, the labor court pronounces the annulment against payment of a severance payment.

If you have a termination is threatened and you cannot assert any claims from a company agreement, nevertheless try to negotiate with your employer. If you do not come to an agreement, seek legal advice as to when and in what amount you can claim a severance payment.

All information: as of June 2012

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