Suing for Severance Pay: How to Enforce Your Abfindung

Can You Sue for Severance Pay?

Here’s the honest answer upfront: as a rule, you can’t sue directly for severance pay (Abfindung). There’s usually no claim “for severance pay” as such, because German law grants no general entitlement to it. If you want severance pay after a dismissal, you almost never sue directly for money, instead, you sue against the dismissal itself.

The route runs through the unfair dismissal claim. Legally, it challenges whether the dismissal is valid and formally aims at continuing the employment relationship. In practice, though, it creates exactly the pressure from which a court settlement including severance pay very often results. Severance pay is therefore the result of negotiation and agreement, not the consequence of an enforceable claim.

There are, however, clearly defined exceptions where severance pay actually is directly enforceable. We’ll look at both routes here.

Why There’s No General Entitlement

A common misconception is that you “automatically” receive severance pay after a dismissal. That’s not true. German employment law contains no general entitlement that guarantees severance pay to every dismissed employee.

So why is severance pay still paid out so often? Because both sides carry risk in an unfair dismissal case: your employer can never be certain the dismissal will hold up in court. If they lose, they must keep employing you and may owe back pay. They often buy their way out of that uncertainty with a severance payment. Severance pay is therefore the price of certainty, not a right that applies to everyone.

When Severance Pay Is Directly Enforceable

In these situations, a concrete and enforceable claim exists as an exception. Here, the question is no longer “whether”, only calculation and enforcement:

1) Offer Under § 1a KSchG

For an operational dismissal, your employer can offer severance pay in the dismissal letter in exchange for you not filing a claim. The statutory standard amount is 0.5 gross monthly salaries per year of employment. The claim only arises once the 3-week deadline expires, so it’s tied to waiving your unfair dismissal claim. Whether the offer is worthwhile or a claim would bring more should be checked beforehand.

2) Social Plan

When a business undergoes major restructuring (such as large-scale redundancies), the employer and works council (Betriebsrat) often agree a social plan. This can give rise to directly enforceable severance claims. A social plan usually sets only minimum standards though, so in individual cases, a claim could achieve more.

3) Contractual Promise

If severance pay has been promised in your employment contract, in a termination agreement (Aufhebungsvertrag), or in a court settlement, it’s binding and enforceable. If payment doesn’t follow, the promised severance can, if necessary, be pursued in court.

The Real Route: the Unfair Dismissal Claim

If none of these exceptions apply, the route to severance pay runs through the unfair dismissal claim. It’s the most important lever employment law gives you.

The idea behind it: you challenge the dismissal and have the court examine whether it’s valid. The more likely it is that the dismissal is flawed, the stronger your negotiating position, and the more likely your employer is to pay severance to end proceedings.

Typical weak points that strengthen your leverage:

• Procedural errors (such as a missing or flawed consultation with the works council)
• Errors in the social selection process for an operational dismissal
• A missing warning notice (Abmahnung) for a conduct-related dismissal
• A weak or contradictory justification for the dismissal

The 3-Week Deadline (§ 4 KSchG)

The single most important point: from the moment you receive written notice of dismissal, you have only 3 weeks to file an unfair dismissal claim with the labour court (§ 4 KSchG).

This is a strict cut-off deadline. If it expires without a claim being filed, the dismissal generally stands as valid from the start (§ 7 KSchG), even if it could otherwise have been successfully challenged. That also means your lever for severance pay is gone. Simply objecting to your employer doesn’t replace filing a claim.

Calculate your exact deadline, down to the day: Deadline calculator, how many days do you have left?

Process: Conciliation Hearing and Main Hearing

Once the claim is filed, the labour court typically schedules a conciliation hearing fairly quickly, an early settlement attempt led by the judge. Many cases are already resolved here with a settlement covering severance pay, the end date, your reference, and any remaining holiday.

If no agreement is reached, written submissions follow, then the main hearing. A settlement remains possible at any point there too, otherwise the court issues a judgment. From filing the claim to a conclusion, several months often pass. You’ll find the details in our guide to the unfair dismissal claim.

The Dissolution Motion (§§ 9, 10 KSchG)

There’s a special route where a court actually awards severance pay: the dissolution motion under §§ 9, 10 KSchG. It requires that the unfair dismissal claim was successful, meaning the dismissal is invalid.

If continuing the employment relationship is nonetheless unreasonable, the court can dissolve it on request and order your employer to pay severance. The amount is based on your earnings and length of service, up to twelve months’ pay, or up to 15 or 18 months’ pay for older employees with long service (§ 10 (1), (2) KSchG). The requirements are strict: for employees, further cooperation must be unreasonable; for employers, even stricter standards apply.

How Much? The Rule of Thumb as a Reference Point

A useful guide is the rule of thumb:

0.5 gross monthly salaries × years of employment

Important: this is a reference point for settlement negotiations, not a guaranteed claim. The actual amount depends on your claim’s chances of success, your negotiating position, and your employer’s willingness to settle. Where there are strong weak points, the factor is often negotiated upward; with a weaker starting position, it can be lower. You’ll find more on calculation and the factors from 0.25 to 1.5 under Severance Pay in Employment Law.

What Does It Cost? (§ 12a ArbGG)

Fees are based on the amount in dispute, usually three gross monthly salaries. This determines legal fees (under the RVG) and, in the event of a judgment, court costs. With a settlement, court costs often don’t apply at all.

A quirk of German employment law (first instance): each party covers its own legal fees, regardless of who wins (§ 12a ArbGG). So even if you win, your employer won’t reimburse your legal fees.

Depending on your situation, these costs can be covered by legal expenses insurance, legal aid (for lower incomes), or litigation funding.

Proceeding Without Financial Risk

This is exactly where Team Abfindung comes in. We’re a litigation funder, not a law firm: we work with lawyers specialising in employment law and finance your case. We carry the risk, purely on a success basis, with no upfront cost. Legal representation is handled by our partner lawyers.

That way, you can pursue your severance pay without paying anything upfront yourself. The first step is an initial assessment with no upfront cost: find out in a few minutes what’s realistically possible in your case, with no obligation and no cost risk.