A conduct-related dismissal severance – many employees believe these don’t go together. Wrongly so: Even if the employer alleges misconduct, a severance package can be the outcome – sometimes even higher than initially offered. This article explains what constitutes a conduct-related dismissal, why there is no automatic entitlement, and how you can improve your negotiating position.
What Is a Conduct-Related Dismissal? Definition and Requirements
A conduct-related dismissal occurs when an employee breaches their contractual duties, making continuation of the employment relationship unreasonable. Typical examples include repeated unexcused absences, refusal to work, theft, or insults directed at superiors or colleagues. The individual case is always decisive: How serious is the breach of duty? Were there prior warnings? How has the employee behaved overall?
Before issuing an ordinary conduct-related dismissal, the employer must generally issue a warning. Only in cases of particularly serious violations – such as a criminal offense against the employer – can the warning be dispensed with. There is also the extraordinary dismissal, which terminates the employment relationship without notice. It, too, is often conduct-related but requires an important reason. Read more in our article on extraordinary dismissal with notice period.
For the question of severance, the distinction matters: An ordinary conduct-related dismissal can end in a severance settlement; with a summary dismissal the path is often harder, but not impossible. A prerequisite for general dismissal protection is also that the employment relationship has lasted longer than six months and the establishment regularly employs more than ten staff.
Conduct-Related Dismissal and Severance: Is There a Statutory Entitlement?
The short answer: No. The Protection Against Dismissal Act does not provide for severance when an employer issues a conduct-related dismissal. The well-known severance rule in Section 1a KSchG applies only if the employer issues a redundancy dismissal and expressly offers the severance in the dismissal letter. In a conduct-related dismissal, this statutory automatic mechanism does not exist.
Severance payments arise in practice almost exclusively through a settlement before the labor court. The employer pays a severance; in return, the employee terminates the employment relationship on a specific date and waives further claims. Whether and how high this severance turns out is a matter of negotiation. Anyone looking for an overview of severance basics will find it in our guide Severance After Dismissal.
When Is a Higher Conduct-Related Dismissal Severance Possible? Negotiating Factors
The amount of a severance depends on several factors. An important benchmark is the rule of thumb of 0.5 gross monthly salaries per year of service. Someone with ten years of service can therefore roughly take five monthly salaries as a starting point. This is, however, not an entitlement but a negotiating yardstick.
The question of whether a conduct-related dismissal severance goes together cannot be answered flatly. What matters is how much the employer has to fear. The weaker the dismissal is justified, the higher the risk that a court will declare it invalid. If, for example, the required warning is missing, the works council was not consulted, or the notice period was not observed, the employer faces a genuine litigation risk. Precisely these weak points can be leveraged in negotiations.
A practical example: The employer dismisses over an alleged insult but cannot name witnesses. Additionally, the necessary warning is missing. In such a case, the dismissal has little chance of surviving in court. The employer knows this – and will be more willing to offer a higher severance than to enter an uncertain proceeding.
A higher conduct-related dismissal severance is therefore always possible when the employer sees litigation risk. Personal factors such as age, length of service, and prospects on the labor market also play a role. Take your time and argue objectively.
Another lever is the default acceptance wage. If a dismissal turns out to be invalid, the employer must pay the salary until the end of the employment relationship – even if you did not work. This risk increases the willingness to pay a higher severance. More on this in our article on default acceptance during short-time work.
The Role of the Protection Against Dismissal Action: How It Strengthens Your Negotiating Position
The most important lever for a severance payment is the protection against dismissal action. You must file it with the labor court within three weeks of receiving the dismissal. If this deadline is missed, the dismissal is deemed valid from the outset – and the chance of a severance drops dramatically.
The action initially aims to establish the invalidity of the dismissal. A conciliation hearing usually follows, in which the court encourages a settlement. This is exactly where the severance arises: The employer wants to eliminate the litigation risk, you want financial compensation and a clean break. Both sides usually meet in the middle.
Without an action, you have hardly any pressure. Filing one shows, by contrast, that you are prepared to enforce your rights. That increases the willingness to negotiate. The procedural basics – from the deadline through the process to the costs – are summarized in our guide Protection Against Dismissal Action: Everything You Need to Know.
If you shy away from the cost risk, you can have it checked whether a litigation funder like RechtStark will cover the costs. Legal representation is always handled by an independent specialist lawyer for employment law; the litigation funder bears the cost risk in the event of success.
Practical Tips: How to Respond Correctly to a Conduct-Related Dismissal
Anyone who wants to negotiate cleverly on a conduct-related dismissal severance should not let themselves be pressured. The first steps after receiving the dismissal are decisive:
- Note the date of receipt of the dismissal and calculate the three-week deadline for the protection against dismissal action.
- Do not agree to a hasty meeting without being prepared.
- Do not sign any termination agreements or waiver declarations on the same day.
- Secure documents: employment contract, dismissal letter, warnings, emails, references.
- Engage a specialist lawyer for employment law – ideally before the action deadline expires.
- Assess whether a protection against dismissal action makes sense for you.
If the employer offers a severance, you should not accept the offer immediately. Ask for a justification of the dismissal and demand a written list of the allegations. The vaguer the allegations, the stronger your negotiating position.
Agree in the settlement on the timing of the payout. A severance helps little if the employer is insolvent or delays payment. Read more in our article Severance Immediately Due: Your Rights After a Dismissal.
Common Mistakes to Avoid: What Employees Should Not Do Now
In the turmoil after a dismissal, mistakes happen quickly that later become expensive. The most frequent ones you should absolutely avoid:
- Letting the three-week deadline lapse. Without a timely action, the dismissal becomes effective even if it was substantively unjustified.
- Signing a termination agreement prematurely. This forfeits the possibility of having the termination reviewed by a court.
- Negotiating without legal advice. Employers often have experienced lawyers on their side.
- Becoming abusive or making threats in the heat of the moment. This can weaken your position and provide additional grounds for allegations.
- Calling in sick just to win the proceedings. This can backfire if the employer challenges the incapacity to work.
- Forgetting to demand a qualified employment reference. Also fix the content of the reference in the settlement.
The calmer and more objective you remain, the stronger your negotiating position. Emotions are understandable, but in employment law, facts, deadlines, and a clean strategy count.
Conclusion: Your Rights and Next Steps
A conduct-related dismissal is unpleasant – but no reason to capitulate immediately. Although there is no statutory entitlement to severance, many proceedings end in a settlement in practice. The weaker the employer’s justification and the more consistently you assert your rights, the better your chances of a reasonable severance.
Check the deadline first, then the justification, then your options. A specialist lawyer for employment law can assess how promising an action is. And if costs are an obstacle, a litigation funder like RechtStark can help limit the risk. Don’t be discouraged – a clean settlement is often the best path to a new professional future.
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.