✂️ Dismissal in a small business
In brief
A dismissal must always be in writing, with a handwritten signature. E-mail is not enough.
The Kündigungsschutzgesetz (Protection Against Dismissal Act) applies if the employment relationship has lasted longer than six months (§ 1 Abs. 1). In small businesses its first section largely does not apply (§ 23 Abs. 1): with as a rule five or fewer employees it does not apply, except for §§ 4 to 7 and § 13 Abs. 1 Satz 1 and 2 (including the deadline for filing a claim). With as a rule ten or fewer, this applies to employees whose employment relationship began after 31 December 2003; these are not counted when counting up to ten employees. Part-time staff count proportionally.
Even in a small business a dismissal must be fair, for example not discriminatory or an act of revenge. The employee can file a claim within three weeks after receipt.
During the probation period (at most six months) a notice period of two weeks applies.
Step by step
- Count the size of the businessCount the employees (excluding trainees), part-time proportionally.
- Check the notice periodProbation period: two weeks. Otherwise statutory or contractual notice (in-depth section).
- Dismiss in writingHand over the signed dismissal in a way that proves receipt.
- Check special protectionPregnant women, severely disabled persons, those on parental leave etc. have special protection against dismissal; take advice first.
Deadlines
- Dismissal only in writing; electronic form is excluded (§ 623 BGB).
- Even in a small business, §§ 4 to 7 KSchG remain applicable, so the three-week deadline for filing a claim applies (§ 23 Abs. 1 KSchG).
- Special protection against dismissal (pregnancy, parental leave, severe disability, care leave) and anti-discrimination rules apply regardless of the size of the business; not evaluated here.
- The basic notice period under § 622 Abs. 1 BGB is four weeks to the 15th or to the end of a month. The longer periods depending on length of service (para. 2) were not evaluated in their wording.
In depth · legal basis, figures and practice – for advisers and professionals
Kündigungsschutzgesetz (Protection Against Dismissal Act)
§ 1 Abs. 1 KSchG: a dismissal of an employee whose employment relationship in the same establishment or company has lasted without interruption for longer than six months is legally invalid if it is socially unjustified. Reasons relating to the person, to conduct, or urgent operational requirements are socially justified (para. 2 sentence 1).
Small business clause (§ 23 Abs. 1 KSchG)
Sentence 2: with the exception of §§ 4 to 7 and § 13 Abs. 1 Satz 1 and 2, the first section does not apply to businesses in which as a rule five or fewer employees are employed, excluding those employed for their vocational training. Sentence 3: in businesses with as a rule ten or fewer employees, this applies to employees whose employment relationship began after 31 December 2003. Employees whose employment relationship began after 31 December 2003 are not counted in the count under sentence 2 until as a rule ten employees are employed (sentence 3, second half-sentence). Part-time employees count as 0.5 for up to 20 hours a week and as 0.75 for up to 30 hours a week. How "as a rule" and "business" are to be interpreted, and the minimum constitutional requirements for dismissals in small businesses (case law of the Federal Constitutional Court and the Federal Labour Court), were not evaluated from primary sources in this research.
Form and deadline for filing a claim
§ 623 BGB: dismissal and termination agreements require written form; electronic form is excluded. § 4 Satz 1 KSchG: action for a declaration within three weeks after receipt of the written dismissal.
Notice periods (§ 622 BGB)
The basic period is four weeks to the 15th or to the end of a calendar month (para. 1). During an agreed probation period, at most six months, a period of two weeks applies (para. 3). Employers with as a rule no more than 20 employees (excluding trainees; part-time at 0.5 or 0.75) can agree shorter periods in the individual contract, which may not fall below four weeks (para. 5). For a person hired as temporary help, a shorter period can be agreed in the individual contract as long as the employment relationship does not continue beyond three months (para. 5 sentence 1 no. 1).
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