Severance pay during job cuts — this question arises for many employees when a corporation like Generali announces the elimination of 800 positions in Germany. The news comes as a shock, yet it is no isolated case. Time and again, workers face a redundancy dismissal without knowing their rights. Anyone who understands the legal basics and acts quickly can often achieve more than the employer’s initial offer suggests.
Generali cuts 800 jobs: What matters for you now
When an insurance group like Generali announces the elimination of 800 jobs in Germany, it is a deep blow for the affected staff. Yet an announcement is not a dismissal. Months can pass between the public statement and the actual receipt of a termination letter. You should use this time to prepare, organize your documents, and review your options.
First, not every dismissal issued in connection with job cuts is automatically valid. The employer must follow certain rules. These include consulting the works council, observing notice periods, and the so-called social selection. If you suspect the dismissal is unlawful, you should seek legal advice immediately. The sooner you act, the better your chances of negotiating a higher severance payment or even defeating the dismissal.
Redundancy dismissal: When it stands and when it does not
The redundancy dismissal is the most common type of termination during job cuts. It requires that the job has permanently ceased to exist. This can result from restructuring, a site closure, or technological change. The employer must demonstrate that the business decision actually leads to the loss of the position and that there is no possibility of continued employment elsewhere in the company.
A key point to examine is the social selection. The employer must compare those employees whose positions are being eliminated and decide who is dismissed based on criteria such as length of service, age, maintenance obligations, and disability. Errors in the social selection make the dismissal vulnerable. This is exactly where a protection against dismissal claim comes in. Special rules also apply in mass redundancies, which you should know if you are affected by large-scale job cuts. Learn more in our article on the protection against dismissal claim in mass redundancies.
Reconciliation of interests and social plan: Your rights in large-scale job cuts
In a larger round of job cuts, the employer is required to involve the works council. A reconciliation of interests sets out how the job cuts will be implemented — which departments are affected and how many employees must leave. The social plan governs the compensation for the economic disadvantages suffered by affected employees. In practice, the social plan often contains severance formulas. The amount of severance pay during job cuts depends largely on the provisions in the social plan.
For you as an employee, the social plan is especially important because it often forms the basis for the severance amount. If you work at a company with a works council, you should inform yourself about the social plan’s contents. Check whether it includes a severance formula and whether there are cut-off dates that determine your entitlement. The question of whether the employer has concluded a reconciliation of interests with a named list can also be decisive for the validity of the dismissal. A named list creates a presumption that the social selection was conducted properly, but errors can still occur.
Severance pay job cuts: Guidelines, not automatic entitlements
Many employees assume they are automatically entitled to a severance payment after a dismissal. That is a misconception: there is no general right to severance pay simply because the employer is cutting jobs. A severance payment is either agreed in a social plan, offered as part of a termination agreement, or achieved through a settlement before the labor court. Only in one exceptional case — Section 1a of the Protection Against Dismissal Act — does the employee have a statutory claim, and even then only if the employer explicitly offers the severance payment in the termination letter.
As a rule of thumb, the formula of 0.5 gross monthly salaries per year of employment has become established in practice. However, this is not a guaranteed amount but a reference point that can vary depending on the social plan and the negotiating situation. Anyone seeking severance pay during job cuts should not rely on verbal assurances but insist on a written agreement. Further details on calculation and tax aspects can be found in our guide severance pay after dismissal.
Three-week deadline: Why acting fast decides your rights
The most important deadline in dismissal protection is the three-week period. After receiving the dismissal, you have exactly three weeks to file a protection against dismissal claim with the labor court. Miss this deadline, and the dismissal is deemed valid — even if it was actually unlawful. The law then presumes you accepted the dismissal. Anyone aiming for severance pay during job cuts must keep the three-week deadline firmly in view.
The period begins when the dismissal is received, usually the day you get the letter. You should document the date of receipt without fail. Note that the deadline also runs on Saturdays, Sundays, and public holidays. What counts is the date the claim arrives at the court. If you are unsure whether a claim has prospects, consult a specialist employment lawyer quickly. An overview of the procedure is available on our page on the protection against dismissal claim.
Engage a specialist lawyer: What matters in a protection against dismissal claim
A protection against dismissal claim should not be filed without legal support. A specialist employment lawyer examines whether the dismissal is formally and substantively valid, whether the social selection was correct, and whether severance claims exist. They represent you before the labor court and, in the best case, negotiate a settlement that includes a severance payment. Similar pitfalls to those in a termination agreement without a lawyer can be avoided by seeking advice early.
You initially bear the costs for the lawyer and the court yourself, even if you win the case. Legal aid exists, but not everyone qualifies. An alternative is litigation funding, where a provider such as RechtStark covers the costs if the case has good prospects. Severance pay during job cuts is therefore not automatic, but the result of negotiations, a social plan, or a settlement. Those who know their rights and secure support early are in a far stronger position.
Litigation funding: How to limit the cost risk of a claim
Litigation funding is a way to limit the financial risk of a protection against dismissal claim. The litigation funder reviews your case and, if successful, covers the legal and court costs. In return, they receive an agreed share of the severance payment obtained. If the claim fails, you do not have to repay the costs.
This model is particularly suitable for employees who could not otherwise afford a claim. However, not every case qualifies for funding. The litigation funder will only step in if the prospects of success are good. That is why it is important to provide your lawyer with all relevant documents. A litigation funder specializing in employment law, like RechtStark, knows the typical pitfalls and can realistically assess your chances.
A round of job cuts like the one at Generali is an ordeal for affected employees. Yet anyone who knows the deadlines, seeks legal advice, and keeps the cost risk in check can successfully assert their interests. Do not let yourself be pressured into signing a hasty termination agreement. A well-prepared protection against dismissal claim often leads to a significantly higher severance payment than the employer’s first offer.
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.