Dismissal Based on Suspicion (Verdachtskündigung): Your Rights and Severance Pay

What is a dismissal based on suspicion?

A dismissal based on suspicion is a dismissal your employer doesn’t base on a proven act, but solely on the urgent suspicion that you’ve committed a serious breach of duty or even a criminal offence. The classic example: money is missing from the till, the evidence points to you, but nobody saw anything and nothing is proven. Your employer dismisses you anyway, because in their view the mere suspicion already destroys the trust needed for continued cooperation.

You won’t find the dismissal based on suspicion in any statute. It’s a construct of case law from the Federal Labour Court (Bundesarbeitsgericht), which recognises the suspicion itself as an independent ground for dismissal: it’s not the (unproven) act that justifies the dismissal, but the urgent suspicion founded on objective facts. This sets it apart from a dismissal based on proven conduct (Tatkündigung), where your employer considers the breach of duty established, as with the classic conduct-related dismissal.

Because someone can lose their job here without anything actually being proven against them, a dismissal based on suspicion is one of the sharpest, yet most error-prone, tools in employment law. Courts only allow it under strict conditions, and employers frequently fail to meet exactly those conditions in practice. For you, that means: a dismissal based on suspicion isn’t a verdict, it’s the start of a dispute in which your position is often stronger than it feels at first.

Important from the outset: even a flawed dismissal based on suspicion becomes final if you don’t file a claim within 3 weeks of receiving the written dismissal (§ 4 KSchG). This clock starts ticking immediately.

The strict requirements for a dismissal based on suspicion

Under case law from the Federal Labour Court, a dismissal based on suspicion must clear several hurdles. If even one is missing, the dismissal is usually invalid:

1) Urgent suspicion based on objective facts

It’s not enough for your employer to simply “believe you did it”. The suspicion must be urgent, meaning it must establish a high probability that you committed the breach of duty, and it must rest on objective, verifiable facts: concrete evidence, documents, analyses, witness statements. Mere assumptions, office gossip or a “gut feeling” on management’s part are explicitly not enough. The vaguer the factual basis, the more vulnerable the dismissal.

2) A serious breach of duty or criminal offence

The suspicion must relate to conduct that, if proven, would justify dismissal: typically theft, embezzlement, fraud, time fraud, manipulated expense claims, or comparably serious breaches of contract. Suspicion of a trivial matter or an everyday mistake isn’t enough. For smaller, correctable breaches of duty, a warning notice (Abmahnung) would be the milder option anyway.

3) Your employer must seriously investigate the matter

Your employer has a duty to investigate: they must do everything reasonably expected of them to clarify the matter before dismissing you. This includes establishing facts that work in your favour just as much as those against you, checking obvious alternative explanations, and above all, hearing you out on the allegations. Anyone who jumps on the first suspicion without checking alternatives fails to meet this requirement.

4) The prior hearing of the employee

The hearing is so central that it deserves its own section (more on that shortly). For now, the essentials: without a proper prior hearing, a dismissal based on suspicion is invalid under case law from the Federal Labour Court. It’s a condition for validity, not a mere formality.

5) Balancing of interests

Even if every condition is met, courts finally check whether the dismissal is proportionate in the specific case. This balancing of interests takes into account, among other things: your length of service, your conduct so far, the severity of the suspicion, and the consequences of losing your job. If you’ve worked for years without complaint, that carries real weight here.

If a works council (Betriebsrat) exists, there’s an additional hurdle: it must be consulted before every dismissal (§ 102 BetrVG), including on the fact that this is a dismissal based on suspicion. Errors in consulting the works council also render the dismissal invalid. You can read more about this body’s role under works council.

Many hurdles, many potential mistakes, plenty of room to negotiate: Use our severance calculator to find out in 2 minutes what severance pay might realistically be in your case.

The hearing: your employer’s obligation, your tactics

Before a dismissal based on suspicion, your employer must give you the opportunity to respond to the allegations. The point is to give you a real chance to dispel the suspicion before it costs you your job. For the hearing to serve that purpose, it must meet genuine minimum requirements:

• Specific allegations: your employer must describe the facts concretely enough for you to know what you’re responding to. “There are some irregularities, what do you have to say?” isn’t enough.
• A genuine chance to respond: catching you off guard in passing, or a meeting where the decision has clearly already been made, isn’t a real hearing. If you ask, you’re usually entitled to a reasonable, short period to think things over.
• Before the dismissal: the hearing must take place before the dismissal is issued. A hearing added after the fact doesn’t cure the defect.

If your employer refuses to hold a hearing at all, only goes through the motions, or stays so vague that you can’t defend yourself, the dismissal based on suspicion is usually invalid. In practice, a flawed hearing is one of the most common reasons such dismissals fail before the labour court.

How should you behave at the hearing?

As strict as your employer’s obligations are, it’s just as easy to damage your own case at the hearing. The most important rules:

• You don’t have to incriminate yourself. Nobody can force you to make statements against your own interest. Staying silent is permitted. But remember: the hearing is also your chance to dispel the suspicion. Whether silence or a prepared, precise statement is wiser is a tactical question that depends on your case.
• Get advice before you respond. Ask for the allegations in writing and for a short deadline to respond. Use that time to talk to lawyers specialising in employment law. A carefully considered written statement is almost always better than answering spontaneously under pressure.
• Don’t sign anything. No confession, no “minutes note”, and above all no termination agreement (Aufhebungsvertrag). Hearings are often used to pile on pressure: dismissal and a criminal complaint on one side, a “quiet” termination agreement on the other. A termination agreement signed under pressure is almost impossible to undo and can also trigger a benefit suspension period (Sperrzeit).
• Stay calm and document everything. Right after the meeting, note down who was present, what was asked, and what you answered. These notes become valuable later, when the question is whether the hearing was conducted properly.

Been told a hearing is coming and unsure how to react? Start with the severance calculator, then let us assess your case before you say anything.

Summary or ordinary dismissal: which form does it take?

In most cases, a dismissal based on suspicion is issued as an extraordinary summary dismissal (fristlose Kündigung): your employer relies on good cause under § 626 BGB and ends the employment relationship from one day to the next. For what that generally means and what rights you then have, see our articles on summary dismissal and extraordinary dismissal.

Particularly important for you: with the summary variant, the two-week deadline to declare the dismissal under § 626 para. 2 BGB applies. Your employer must declare the dismissal within 2 weeks of learning the key facts. For a dismissal based on suspicion, this deadline has a special feature: as long as your employer investigates promptly, for example by reviewing documents and conducting your hearing, the period usually doesn’t start running yet. But if they drag out the investigation without good reason, the two-week deadline can expire, making the summary dismissal invalid for that reason alone. The timeline between the first suspicion, the hearing and the dismissal is therefore always worth examining closely.

A dismissal based on suspicion is also possible as an ordinary dismissal with a notice period, often as a “backup” second stage: summary dismissal, with ordinary dismissal to the next possible date as a fallback. If the summary dismissal fails, the ordinary one is meant to apply instead. But an ordinary dismissal based on suspicion must also meet the requirements described above, including the hearing, and if the Dismissal Protection Act (Kündigungsschutzgesetz) applies, it must meet its standards too. Read more about this type of dismissal under ordinary dismissal.

Suspicion, criminal proceedings and innocence: what actually applies?

Many people affected assume: “As long as I’m not convicted, nothing can happen to me under employment law.” Unfortunately, that’s wrong. Employment law and criminal law operate independently of each other:

• No conviction required: whether a dismissal based on suspicion is valid doesn’t depend on whether criminal proceedings are running or how they turn out. What matters is solely whether the employment-law conditions were met at the time of dismissal.
• An acquittal doesn’t automatically protect you: even a later acquittal or a dropped criminal investigation doesn’t automatically invalidate the dismissal. In criminal proceedings, “in doubt, for the accused” applies; in an unfair dismissal claim, the court independently examines whether the urgent suspicion was justified at the time of dismissal.
• But: a right to reinstatement if your innocence is proven. If your innocence is established after the dismissal, case law from the Federal Labour Court may give you a right to reinstatement: your employer may be obliged to re-employ you because the basis for the dismissal based on suspicion has fallen away. Whether and to what extent this applies depends heavily on the individual case, for example on when the exonerating evidence emerges.

So the criminal-law presumption of innocence doesn’t translate one-to-one into employment law. All the more reason to use the levers employment law actually gives you: the strict requirements for a dismissal based on suspicion, hearing mistakes, your employer’s burden of proof, and judicial review through an unfair dismissal claim (Kündigungsschutzklage).

If a parallel criminal investigation is running, this also applies: don’t make statements to your employer, the police, or the public prosecutor without legal advice beforehand. Statements made at the employment-law hearing can play a role in criminal proceedings, and vice versa.

The 3-week deadline to sue: your most important deadline

No matter how flawed the dismissal based on suspicion is: if you don’t challenge it in time, it becomes valid. Under § 4 KSchG, you must file an unfair dismissal claim with the labour court within 3 weeks of receiving the written dismissal. This deadline also applies to extraordinary dismissals. If you let it pass, the dismissal is generally treated as valid from the outset, even if the hearing was missing and the suspicion stood on shaky ground.

A letter of objection to your employer, an email to HR, or a request for a meeting do not preserve the deadline. Only a claim received by the labour court in time counts. Our deadline calculator for unfair dismissal claims works out exactly how many days you have left.

Filing a claim doesn’t necessarily mean you want to go back to the company. At first, it’s simply the tool that keeps your options open: continued employment if you want it, or an ending on much better terms. Many cases already settle at the conciliation hearing (Gütetermin).

Severance pay after a dismissal based on suspicion: why your position is often strong

Here too, there’s generally no legal entitlement to severance pay after dismissal. Even so, a striking number of cases involving a dismissal based on suspicion end in a settlement that includes severance pay. There are solid reasons for that:

• Your employer bears the full burden of proof. They must set out and prove the objective facts underlying the urgent suspicion, and show they met their duty to investigate. With a mere suspicion, that’s naturally difficult.
• Hearing mistakes are common. Allegations that are too vague, deadlines that are too short, catching you off guard, a hearing added after the fact: any of these mistakes can bring down the entire dismissal, regardless of whether the suspicion has any substance.
• The litigation risk is costly for your employer. If they lose, they must continue to employ you and backpay your wages for the entire duration of proceedings (employer’s default of acceptance, Annahmeverzug). With proceedings lasting several months, that adds up quickly.
• Reputational risk: a public trial over unproven allegations, complete with evidence and witnesses from within the company, is uncomfortable for many employers. A discreet settlement is often the easier route.

As a rule of thumb for the amount: 0.5 gross monthly salaries per year of employment. This isn’t an entitlement, it’s a negotiating anchor. The shakier the dismissal, the more room there is to negotiate beyond it. For what influences the amount in detail, see severance pay: amount, and for the tax treatment, it’s worth looking at the one-fifth rule (Fünftelregelung).

Worked example: Miriam fights her dismissal based on suspicion

Example: Miriam has worked at the company for 12 years, earning €4,200 gross a month. She’s summarily dismissed on suspicion of manipulating expense claims. The “hearing” consisted of a 10-minute meeting where she was only confronted with vague “discrepancies in the accounts”, with no concrete evidence and no chance to review the documents. Miriam signs nothing and files an unfair dismissal claim in time. At the conciliation hearing, it becomes clear that the hearing barely meets the standards set by case law, putting the summary dismissal on shaky ground. Result of the settlement: the employment relationship doesn’t end summarily but ordinarily, at the end of the notice period, which for 12 years of service is 5 months to the end of the month. On top comes severance pay based on the rule of thumb, with the reason for termination worded neutrally.

Without pushing back, Miriam would have faced: an immediate stop to her salary, a looming benefit suspension period, and a summary dismissal leaving a mark on her CV. By pushing back, she gets around €46,200, a neutrally worded ending, and typically a favourable reference. These figures are an example, not a promise, but they show the leverage involved. You can also see how long service affects the outcome under severance after 10 years.

How much could be realistic in your case? Work it out in 2 minutes with our severance calculator.

Benefit suspension risk: what happens to your unemployment benefit?

After a conduct-related dismissal, the employment agency checks for a benefit suspension period (Sperrzeit): under § 159 SGB III, your unemployment benefit is suspended for usually 12 weeks if you gave cause for the dismissal through conduct in breach of your contract, and your total entitlement period is reduced as well.

With a dismissal based on suspicion, though, the situation is special: you’re not being accused of proven misconduct, only a suspicion. Whether the conditions for a benefit suspension are met is therefore often doubtful and depends on the individual case. All the more reason to push back: a successful unfair dismissal claim, or a settlement with a neutrally worded reason for termination, can often prevent the suspension. You’ll find all the details, exceptions and ways around the suspension under benefit suspension period.

Regardless of all that: register as a jobseeker immediately. Under § 38 SGB III, if there’s only a short time between dismissal and termination, you must do this within 3 days of finding out, so with a summary dismissal based on suspicion, ideally on the same day or the day after. You must register even if you’re challenging the dismissal in court, and it won’t harm your claim.

What you should do now

Whether the dismissal based on suspicion is already on the table or you’ve only been told a hearing is coming, the order of your next steps has a real impact on the outcome. You’ll find the full step-by-step guide under received a dismissal, what now? Here’s the short version for suspicion cases:

1. Don’t sign anything, don’t admit anything on the spot. Not at the hearing, and not afterwards. No “harmless” minutes and no termination agreement, however much pressure is applied.
2. Ask for the allegations in writing and request time to think. This is well within your rights and gives you time for a considered response.
3. Note the date you received the dismissal. The 3-week deadline to sue runs from that day. Keep the envelope and letter and document the circumstances of delivery.
4. Secure evidence. Your employment contract, statements, emails, rotas, the names of possible witnesses: anything that disproves the suspicion or documents how the hearing went.
5. Register as a jobseeker immediately (§ 38 SGB III), regardless of whether you’re taking legal action.
6. Have your case reviewed legally. Whether the hearing was proper, the two-week deadline was met, and how solid the suspicion really is, can usually be assessed quickly, and that shapes your strategy: continued employment or ending the relationship in exchange for severance pay.

First, get a clear picture of your leverage: The severance calculator shows you your personal benchmark figure in 2 minutes.

How can we help you?

A dismissal based on suspicion hits you twice: your job is gone, and there’s an unproven allegation hanging over you. This is exactly where we review your case together with lawyers specialising in employment law: was the hearing proper? Does the suspicion hold up? Was the two-week deadline met? And what’s realistically achievable, continued employment or an ending on good terms?

We carry the risk: no upfront cost, paid only on success. Start with an initial assessment through our severance calculator, it only takes 2 minutes, and remember the 3-week deadline.