This is probably the most frequently asked question after employees have received notice of termination.
The answer will probably surprise many people: From a legal perspective and contrary to popular belief, employees are not entitled to severance pay, apart from a few exceptional cases.
But why is it that most termination disputes end with a settlement that includes a severance payment?
We address this question in the following article and show why you can achieve a severance payment after all.
When are employers even willing to pay severance pay?
If employees file an action for protection against dismissal, this is aimed at establishing that the employment relationship has not been terminated by the dismissal. The continuation of the employment relationship is therefore the actual goal. However, employers are then generally no longer interested in continued employment. After all, they have clearly demonstrated this by giving notice of termination. This interest is the anchor for a severance payment.
In many cases, the termination proves to be unjustified or ineffective for other formal reasons. The reason for this is that dismissals by employers often do not meet the high requirements of statutory regulations. In these cases, employers fail to fully comply with the many laws that protect employees from losing their jobs. This makes them legally vulnerable. Many employees are convinced that their employers would not make such mistakes because they are either impressed by the employers' competence or know that they are seeking legal advice.
In our experience from representing employers, employers are aware of the legal vulnerability and deliberately take their chances. They hope that employees will not defend themselves against the termination for the reasons mentioned above. If employees do challenge the dismissal, employers know that the dismissal has at least created the basis for terminating the employment relationship by paying a severance payment and try to reach an agreement in this way.
Employers are effectively "buying" employees from the litigation and wage risk that they would run if a court judgment were actually reached.
What would be the alternative for employers?
If employers do not agree to a settlement, the court would have to make a judgment. The legal hurdles for an effective dismissal are very high and the litigation and wage cost risk for employers is enormous. In addition, the chamber hearing usually takes place several months after the failed conciliation hearing. During this time, the employee's wage costs continue to run and, in the case of a leave of absence, even without consideration.
Those who know their rights will be able to negotiate better, which in turn can result in a higher severance payment.
In our experience, well-advised employers are already willing to settle before and at the latest during the conciliation hearing when they become aware of the vulnerability of the dismissal.
