Many employees wonder whether age and severance are linked when an employer makes an offer or issues a dismissal. The short answer: age must not be used arbitrarily to worsen conditions, but it can indirectly affect the amount through social selection and the company’s age structure. Lawyer Ansgar Dittmar pointed out in a recent interview that the line between permissible consideration and prohibited age discrimination is often thin.
age and severance: Legal Framework
The Section 1a Dismissal Protection Act (KSchG) regulates the severance entitlement in case of operational dismissal, but it does not create a general legal claim to a specific amount. The General Equal Treatment Act (AGG) prohibits discrimination on the grounds of age. This means: an employer may not simply pay lower severance to older employees just because they are older. Differential treatment is only permissible if it is objectively justified by a legitimate aim and proportionate – for example, when a social plan provides age‑dependent scales that serve to protect older workers.
Social Selection and the Age Factor under the Dismissal Protection Act
In cases of operational dismissal, the employer must carry out a social selection. The Dismissal Protection Act (KSchG) stipulates that criteria such as length of service, age, maintenance obligations and severe disability must be taken into account. Age is therefore a legally anchored factor – but only for deciding who is affected, not directly for the amount of severance.
Nevertheless, age has an indirect effect: older employees often have longer tenure and maintenance obligations, which protects them in the social selection. If a dismissal still occurs, the long tenure can improve the bargaining basis for a higher severance, because the employer faces a greater risk of losing an unfair dismissal claim. This often provides the leverage for negotiations.
Case Law: How Courts Assess Age in Severance
The case law of the Federal Labour Court (BAG) shows that age‑graded scales in social plans are generally permissible if they serve to compensate older workers for disadvantages. Conversely, clauses that systematically place older employees at a disadvantage are ineffective. In practice, the expression age and severance is frequently used when talking about severance packages. In individual cases, courts have declared severance formulas null and void when they used age as the sole criterion for a cap.
Important: There is no fixed “severance table by age”. Each case depends on the circumstances – industry, company size, bargaining power. An example from practice shows how in large‑scale layoff programs age‑graded offers are often made, but they remain negotiable.
Negotiation Strategy: Using Age Arguments Effectively
Employees who receive a dismissal should not view their age as a weakness but as an argument. Older workers often bring experience, loyalty and low turnover – points that an employer can reward in an amicable settlement. In negotiations, it is advisable to:
- emphasize the long period of service and the associated social need for protection;
- point out the increased difficulty of finding new employment in the labor market;
- cite individual rulings or industry‑typical benchmark amounts as a reference, without presenting them as an entitlement;
A specialist employment lawyer can assess the individual situation and take over the conduct of negotiations. RechtStark, as a litigation funder, reviews the financing of such a procedure, thereby minimizing the cost risk for the employee.
Pitfalls: When Age‑Related References Are Unlawful
Not every reference to age is prohibited. It becomes unlawful when:
- the employer preferentially favors “younger staff” and makes a lower offer to older employees;
- a social plan sets age thresholds after which the severance drops sharply without a compensatory function;
- the dismissal itself is motivated by age discrimination (e.g. “rejuvenating the workforce”).
In such cases, besides an unfair dismissal claim, a claim for damages under the AGG may also arise. The burden of proof initially lies with the employee, but indications such as a conspicuous age pattern among those dismissed can be sufficient.
Litigation Funding: Support for Enforcement
An unfair dismissal claim costs time and money. Many employees shy away from the risk of being left with lawyer and court fees. This is where litigation funding comes in: RechtStark, after assessing the prospects of success, covers the costs for lawyer, court and expert witnesses. In the event of success, the funder receives an agreed share of the severance or the judgment amount. Thus, affected persons can enforce their rights without financial risk – even if the employer sticks to its position.
Conclusion and Checklist for Affected Employees
Age must not serve as an arbitrary devaluation factor in severance, but it does flow in via social selection and bargaining position. Employees who are dismissed should check the following points:
- Is there an operational dismissal that makes Section 1a of the Dismissal Protection Act applicable?
- Has a social selection been carried out and was the age factor weighted correctly?
- Does the severance offer contain age‑graded scales that are not justified by compensatory purposes?
- Are there indications of age discrimination in the motive for dismissal?
- Has a specialist employment lawyer been consulted to realistically assess the negotiation basis?
With solid legal support – and, if needed, litigation‑funding backing – significantly better outcomes can often be achieved than with the employer’s first offer. age and severance is not an obstacle; when used correctly, it can strengthen bargaining power.
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.