Severance pay in the public sector: TVöD & TV-L

Is there a right to severance pay in the public sector?

The short answer: no, at least not an automatic one. As in the private sector, the public sector also has no general statutory right to severance pay under employment law. Neither the Dismissal Protection Act nor the TVöD or TV-L give you a payment claim just because you’ve been dismissed. Severance pay arises almost always through negotiation: in a termination agreement (Aufhebungsvertrag), a court settlement, an offer under § 1a KSchG, or a social plan (Sozialplan) during restructuring.

One important distinction up front: this page is aimed at employees covered by collective agreements, that is, staff in the public sector under TVöD (federal and local government) or TV-L (states). Civil servants (Beamte) don’t have an employment relationship and are, in employment-law terms, effectively protected from dismissal. They’re governed by civil service law and separate procedures. Everything below applies exclusively to collectively agreed employees.

Why is this topic still worth your attention in the public sector? Because your negotiating position is often stronger there than in the private sector: long collectively agreed notice periods, a Dismissal Protection Act that practically always applies, and, after long service, protection against ordinary dismissal under § 34 (2) TVöD. If you’re barely dismissible, your employer has to buy you out. That’s exactly what this page is about.

Dismissal protection for collectively agreed staff: the KSchG applies as normal

For employees covered by collective agreements in the public sector, the Dismissal Protection Act applies under the same conditions as in any private company: more than 6 months’ qualifying period and, as a rule, more than 10 employees at the workplace. This employee threshold is practically always met in authorities, local councils, hospitals or state-run enterprises. An ordinary dismissal must then be socially justified, based on operational, conduct-related or personal grounds (§ 1 KSchG).

What this means for you: you can challenge a dismissal in the public sector with an unfair dismissal claim just like any other dismissal. Common grounds for challenge include a flawed selection process (Sozialauswahl), incomplete involvement of the staff council (Personalrat, the public-sector equivalent of the works council), a missing warning notice (Abmahnung) before a conduct-related dismissal, or an inadequate prognosis behind a dismissal due to illness.

The most important deadline applies here too: you must file a claim with the labour court within 3 weeks of receiving the written dismissal (§ 4 KSchG). After that, the dismissal is generally treated as valid, even if it was flawed. To see exactly how many days you have left, use our deadline calculator for unfair dismissal claims.

A first assessment in 2 minutes: use our severance calculator to see what severance pay is realistic in your case.

Notice periods under § 34 (1) TVöD: up to 6 months, ending at quarter end

Instead of the statutory scale under § 622 BGB, collectively agreed notice periods generally apply to employees under TVöD. Under § 34 (1) TVöD, they depend on length of service and, after the first year of employment, run to the end of a calendar quarter, that is, 31 March, 30 June, 30 September or 31 December. For a comparison with the statutory scale, see our article on notice periods.

The quarter-end rule often makes the periods even longer in practice than the table suggests. Example: if you receive a dismissal in early April and the 6-month tier applies, your employment can end at the earliest on 31 December, almost 9 months of continued salary. The collective agreement that applies to you is always decisive. TV-L and special rules for particular sectors can differ. It’s always worth checking your employment contract and the collective provisions it refers to.

Protection against ordinary dismissal: § 34 (2) TVöD

The most important public-sector feature for your severance negotiation is set out in § 34 (2) TVöD: in the Western collective bargaining area (Tarifgebiet West), employment relationships of staff who have reached more than 15 years of service and turned 40 can, as a rule, only be terminated for an important reason. This is known as non-terminability under a collective agreement (tarifliche Unkündbarkeit), protection against ordinary dismissal under the collective agreement.

What does this mean in practice? An ordinary dismissal, for example due to job cuts or restructuring, is then generally excluded. What remains for the employer is essentially an extraordinary dismissal for an important reason, which faces very high hurdles, in some situations an extraordinary dismissal with a social notice period, or a change notice (Änderungskündigung) to adjust working conditions. "Protected from ordinary dismissal" doesn’t mean "dismissible under no circumstances", but the bar is very high.

Two caveats belong to an honest picture: first, this rule applies in this form in the Western collective bargaining area; the Eastern collective bargaining area (Tarifgebiet Ost) and other collective agreements may have different rules. Second, everything depends on the applicable collective agreement and the correctly calculated length of service, for example where you’ve changed employer within the public sector. Whether you actually fall under the protection of § 34 (2) TVöD should therefore always be checked case by case.

What protection from dismissal means for your severance pay

This is where it gets financially interesting. Severance pay is always the price an employer pays to end an employment relationship with certainty and without litigation risk. That price rises with the employer’s risk, and in the public sector that risk is structurally high: long notice periods, full dismissal protection, staff council involvement. For those protected against ordinary dismissal, there’s the added fact that the employer has no route to a unilateral termination without an important reason.

If an authority or local-government employer still wants to part ways with you, for example because a post is being cut or a facility closed, the only practical route is through your consent: a termination agreement. And whoever needs your consent has to pay for it. That’s exactly why results for employees protected against dismissal are often above the usual rule-of-thumb, more on this under termination agreement and severance pay.

The flip side: because the employer knows this, gentle pressure is common in the public sector ("the post will disappear anyway", "better to agree now than fight it out later"). Don’t let this push you into signing quickly. Every week you take for yourself works in your favour, because your salary keeps being paid and your legal position doesn’t weaken.

Before you go into a discussion about a termination agreement: use the severance calculator to work out your personal negotiating basis.

The typical routes to severance pay in the public sector

Even without a statutory entitlement, there are five established routes by which severance pay comes about in the public sector:

• Termination agreement: the most common route, especially for employees protected against ordinary dismissal. You and your employer end the employment relationship by mutual consent in exchange for severance pay, often combined with arrangements for your reference, release from duties and remaining leave. Before signing, the suspension period, supplementary pension and tax need checking, more on that below. We also have an annotated termination agreement template.
• § 1a KSchG following an operational dismissal: if your employer dismisses you for operational reasons, they can offer you, in the dismissal letter, severance pay of 0.5 months’ pay per year of service if you let the claim deadline lapse (§ 1a KSchG). Whether accepting or filing a claim is the better choice depends on your case, details under operational dismissal and severance pay.
• Court settlement: the classic route following an unfair dismissal claim. Many parties already agree on ending the relationship in exchange for severance pay at the settlement hearing, usually a few weeks after the claim is filed. The weaker the dismissal, the better your negotiating result.
• Dissolution application under §§ 9, 10 KSchG: if the dismissal is invalid but continuing the relationship would be unreasonable for you, the court can dissolve the employment relationship on request and order the employer to pay severance (§ 9 KSchG). Under § 10 KSchG, the amount can reach up to 12 months’ pay, or up to 15 or 18 months’ pay for older employees with long service. In practice this is the exceptional route, but an important bargaining chip.
• Social plan during restructuring: when facilities are merged, privatised or closed, the staff council or works council often negotiates a social plan with severance formulas, often alongside a reconciliation of interests or offers such as a transfer company. Social plan severance amounts are a floor, not a ceiling: individually, you can often negotiate more.

Which route is right for you depends on whether a dismissal has already been issued, whether you fall under § 34 (2) TVöD, and what you actually want: stay, or leave on good terms. Both are legitimate, but the strategy differs significantly.

Worked example: the 0.5 rule-of-thumb in the public sector

As a guide to the amount of severance pay, the public sector also uses the rule-of-thumb: 0.5 gross monthly salaries per year of service. It’s not an entitlement, but a negotiating anchor based partly on § 1a KSchG. For what else affects the amount, see severance pay amount.

Example: Sabine is 52 and has worked for a city council in the Western collective bargaining area for 20 years. As an example gross monthly salary, we’ll assume 4,200 €, roughly in the range of pay group E9b at a higher step (the actual pay-scale figures change with each collective bargaining round, your pay statement is what counts). Her department is due to be restructured, and the council offers her a termination agreement.

The crucial point: with more than 15 years of service and having turned 40, Sabine generally meets the requirements for protection against ordinary dismissal. The council can practically not dismiss her through ordinary notice. If Sabine declines, everything stays as it is, which is exactly why a factor above 0.5 here isn’t wishful thinking, but a realistic negotiating goal. These figures are an example, not a promise. For how long service generally affects your case, see our article severance pay after 20 years.

Work through your own example: the severance calculator shows you your personal guide figure in 2 minutes.

Public-sector specifics: supplementary pension and benefit suspension

Supplementary pension (VBL): have it checked before you sign

Employees covered by collective agreements in the public sector generally have an occupational pension through a supplementary pension fund, at federal level and in many states through the VBL. This occupational pension is tied to your employment relationship and your contribution record. Ending it early through a termination agreement can therefore affect your later pension. How much depends on your individual contribution history and the relevant pension provider. General statements aren’t possible here: get specific information from your supplementary pension fund before signing and factor the consequences into your negotiation. This is another point that can justify higher severance pay.

Benefit suspension period for unemployment benefit (§ 159 SGB III)

The second thing to check applies to every termination agreement, including in the public sector: if you end your employment yourself without an important reason, you risk a benefit suspension period (Sperrzeit) of usually 12 weeks for unemployment benefit under § 159 SGB III, with your total entitlement period also reduced. Under certain conditions, the employment agency recognises an important reason, for example if you’re merely anticipating a lawful dismissal that would otherwise be issued, and severance pay within the usual range is paid. For employees protected against ordinary dismissal, though, this argument is tricky, since an ordinary dismissal isn’t actually threatened. For ways to minimise this risk, see benefit suspension period for unemployment benefit and termination agreement and unemployment benefit.

Practical takeaway: a termination agreement in the public sector needs checking against both these points before you sign. Both can be shaped, through the end date, how the reason for termination is worded, and the amount of severance, but only as long as you haven’t signed yet.

Already have an offer on the table? use the severance calculator to check whether the offered amount matches your negotiating position.

Tax: the one-fifth rule for your severance pay

Severance pay is taxable employment income but exempt from social security contributions: no contributions are deducted for pension, health, long-term care or unemployment insurance. For income tax, the one-fifth rule (Fünftelregelung) under § 34 EStG helps: the severance is notionally spread over five years, which eases the progressive tax effect of the one-off payment. This generally requires the severance to be paid in a single lump sum within one calendar year.

Important since 2025: the one-fifth rule is no longer applied automatically during payroll tax deduction by the employer, but is usually claimed through your income tax return. The timing of payment is also a tax lever: if the severance is paid in a year with low other income, for example in January of the following year, the tax burden is often noticeably lower. For details with worked examples, see the one-fifth rule and severance pay and tax.

What you should do now

Whether you’ve already been dismissed or offered a termination agreement, the order of steps is the same:

1. Don’t sign anything. No termination agreement, no "declaration of consent", not even under time pressure. In the public sector, your legal position isn’t going anywhere.
2. Gather your documents. Employment contract, the applicable collective agreement or reference clause, your current pay statement, evidence of your length of service, letters from your employer.
3. Check your length of service and protection against ordinary dismissal. Do you fall under § 34 (2) TVöD? That changes your entire negotiating strategy.
4. If you’ve been dismissed: keep the 3-week deadline. Without a timely claim, even a contestable dismissal becomes effective. First steps in detail: received a dismissal, what now?
5. Put a figure on your negotiating position. Calculate first, then talk: knowing your guide figure lets you negotiate better.

How can we help you?

Are you employed in the public sector and facing a dismissal or an offered termination agreement? We review your case together with lawyers specialising in employment law: your length of service, protection against ordinary dismissal, benefit suspension and pension consequences, and negotiate the best possible outcome for you.

We carry the risk: purely success-based, at no upfront cost, paid only on success. Start with a first assessment using our severance calculator, it only takes 2 minutes.