Irrevocable Garden Leave does not automatically end when you file a dismissal protection claim, although its effect is limited to the original notice period. Many employees hope to keep working until the proceedings conclude, but this hope is often unfulfilled. What does this ruling mean for you in practice? What rights do you retain during the leave, and how can you strengthen your position for a severance payment? This article explains the background and offers clear recommendations.
Irrevocable Garden Leave: What the LAG Ruling Means for Employees
This type of leave is a unilateral statement by the employer that releases you from the duty to work – without you being able to influence it. Unlike the revocable version, which the employer can withdraw at any time, such a leave is final: you do not have to report for work, but you continue to receive your salary until the end of the notice period. This arrangement is common in practice, especially when the employer fears that you might disrupt operational processes or disclose confidential information to competitors during the notice period.
It is important to understand that garden leave is not a dismissal. It does not terminate the employment relationship; it merely suspends the obligation to work. Your employment contract remains in force – with all rights and obligations that are not expressly suspended. In particular, the employer’s duty to pay wages continues during the leave. The Niedersachsen LAG ruling (16 March 2026, Case No. 4 SLa 854/25) confirms that such leave does not become ineffective simply because you challenge the dismissal – its binding effect is, however, tied to the original notice period and does not automatically last until the proceedings conclude.
For employees facing an Irrevocable Garden Leave, the key takeaway is that the leave’s duration is fixed by the original notice period, not by the length of the legal dispute.
The Dismissal Protection Claim as a Core Element of Your Defense
The leave does not relieve you of the obligation to observe the three‑week claim period under section 4 of the Dismissal Protection Act. If you do not file the dismissal protection claim within this period, the dismissal is considered valid – regardless of whether you are on leave or not. This deadline is the biggest hurdle in any dismissal protection procedure. Missing it means you lose not only your job but also any claim to severance or continued employment.
The claim period starts with receipt of the dismissal and ends on the third working day of the following month. While this sounds simple, it is often tricky in practice: public holidays, weekends, and company closures do not extend the deadline. Moreover, you must file the claim with the competent labor court – that is merely the formal step. The real challenge begins after that: you need to present your arguments coherently and submit evidence. An employment law specialist can assist you and realistically assess the prospects of your claim.
What the LAG Ruling Means for Your Employment Relationship
In the case decided by the Niedersachsen LAG (16 March 2026, Case No. 4 SLa 854/25), the employer placed the employee on an Irrevocable Garden Leave until the original termination date after issuing the dismissal. Nevertheless, during the notice period the employer recalled the employee to work; the employee stayed away and relied on the irrevocability of the leave. The LAG ruled: filing a dismissal protection claim does not automatically invalidate the leave – it is a separate declaration whose binding effect generally extends beyond the point of judicial clarification.
This binding effect, however, is not limitless: in the decided case the claim for wages existed only until the original termination date. For the period thereafter the court denied any claim, because the employee did not report for work despite being recalled and the employment relationship still existing. For you this means: if you are called back to work – for example because the proceedings are delayed or the employer changes his stance – you should comply, otherwise you risk losing your wage entitlements. Although the leave remains an effective tool for the employer, its effect does not automatically last until the conclusion of your dismissal protection claim.
Your Rights During the Leave: Salary, Holiday and More
Even while on leave, you retain the right to your contractual remuneration. The employer must pay your salary until the end of the notice period – and beyond that, if the dismissal is ineffective and the employment relationship continues. Make sure your salary payments arrive on time and in full. If the employer reduces payments, you can enforce this claim in court, for example through a salary claim.
A frequent point of contention is the holiday entitlement. During the leave, you must have your holiday credited if the employer expressly states so. If no such statement is made, your holiday entitlement remains and can be paid out later. You are also entitled to a qualified reference that must be worded favorably – irrespective of whether you are on leave or not. Have the certificate issued promptly and check it for completeness and accuracy. When drafting a good reference, a lawyer can help, as they know the standard formulations and can tailor them to your career development.
Your Negotiating Position for Severance After the LAG Ruling
This type of leave does not mean you have to waive severance. On the contrary, many employers offer a severance payment to conclude the dismissal protection proceedings and obtain legal certainty. The amount of severance, however, is a matter of negotiation – there is no statutory entitlement, except in the rare cases of section 1a of the Dismissal Protection Act, where the employer expressly offers the severance in the dismissal letter. In practice, many settlements are based on the rule of thumb of 0.5 to 1.0 gross monthly salaries per year of service – but this is only a guideline, not a guarantee.
Your negotiating position depends on several factors: the length of your service, your age, your prospects on the labor market, and the chances of success of your dismissal protection claim. The leave can be a double‑edged sword: on the one hand it signals that the employer no longer wants you in the workplace – which can strengthen your position. On the other hand the employer may argue that, because of the leave, you have already left the company in fact and therefore you cannot build up much pressure. Seek advice from a lawyer on how to best use this dynamic. An experienced attorney can assess the prospects of your claim and set a realistic framework for the severance negotiation. Moreover, they can optimize the tax value of a severance payment, for instance by using the fifth‑rule, as shown in our article on the fifth‑rule for severance.
Practical Recommendations: How to React Correctly
For employees affected by this type of leave, concrete recommendations arise: first, check immediately whether the leave was communicated in writing and unambiguously. If such a statement is missing, you may continue to report for work and offer your performance. Second, document all relevant events – the dismissal letter, the leave declaration, pay slips and correspondence with the employer. These documents form the basis of your dismissal protection claim and any subsequent claims.
Third, clarify whether you are allowed to take on a side job during the leave. Many employment contracts contain clauses that prohibit secondary activities while the employment relationship exists – also during the leave. Violating these rules risks a warning or even an immediate dismissal.
Fourth, consider your social‑security situation: while on leave you remain compulsorily insured, but after the employment relationship ends you may face a waiting period for unemployment benefits if you resign yourself or sign a termination agreement. Seek advice from the Federal Employment Agency or a labor‑law lawyer on this matter. Another important point is whether you wish to enter a new employment relationship. The leave gives you the opportunity to look for a new job without the pressure of having to accept an offer immediately. Use this time wisely and plan your professional future strategically.
Conclusion: The LAG Ruling as a Wake‑up Call for Your Rights
The LAG ruling makes clear: this type of leave is an effective instrument for the employer, but its binding effect is tied to the original notice period rather than automatically lasting until the conclusion of your proceedings. As an employee you should not rely on remaining on leave for the whole process – respond to any recall by the employer and at the same time aim for the best possible economic solution. The leave provides you with time and space to secure your rights, negotiate severance and plan the transition to a new job. Seek professional assistance early on – an employment‑law specialist can realistically assess your chances and initiate the appropriate steps. If the cost of the proceedings is an obstacle, check whether a litigation funder such as RechtStark can finance your dismissal protection claim – so that your rights do not fail for lack of funds. Further useful information on dismissal protection claims can be found in our article on the dismissal protection claim after a prominent defeat.
Note: This article is for general information purposes only and does not replace individual legal advice. For a free initial assessment of whether litigation funding may be an option for your case, you can contact RechtStark.