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Myths in Labor Law Common Misconceptions in Labor Law

Legal Right to Severance Pay? Can’t Be Fired Due to Illness? Three Written Warnings Before Termination? Some myths in labor law are hard to dispel. We’re clearing up common misconceptions.

Nachdenkender Mann vor Notebook

3 February 2022 3 February 2022


“Employment contracts must be concluded in writing.”

It is true that the German Employment Evidence Act (Nachweisgesetz) requires employers to set forth the terms of the employment relationship in writing within one month of the contract’s conclusion. However, a verbal agreement is also valid. An employment contract can even be implied—for example, if an employee continues working after a fixed-term contract ends and the employer accepts this.


“Part-time employees are entitled to fewer vacation days.”

That’s wrong! Part-time employees have the same vacation entitlement under collective bargaining agreements—or at least under the law—as full-time employees. If they work only a few days a week, they may have fewer vacation days, but they don’t have to take vacation on their days off. Even those in mini-jobs and part-time employees have a legal entitlement to at least four weeks of vacation per year.


“An employee cannot be terminated while on sick leave.”

An employer may terminate an employee’s employment not only during an illness but even because of an illness. A so-called “person-related termination” may be justified if an employee has frequent short-term illnesses that total more than six weeks in a year. Or if the employee has constantly recurring or long-term illnesses that disrupt business operations or place a significant financial burden on the employer, and for which there is no prospect of a prompt recovery.


“Before a termination for cause, the employee must receive three written warnings.”

That’s not true! As widespread as this statement is, it is just as false. In most cases, a single written warning is sufficient for the employer to terminate the employment contract in the event of a subsequent breach of the employment contract. The decisive factor is the severity of the breach. However, the written warning must pertain to a similar set of facts. In cases of serious violations, such as criminal offenses, termination without a prior written warning may also be justified.


“Anyone who is terminated can definitely demand severance pay.”

If only! However, a claim to severance pay can only arise in the case of a layoff due to operational reasons, as stipulated in a collective bargaining agreement or a social plan. The employer may also offer severance pay if the employee waives the right to file a lawsuit for unfair dismissal. Furthermore, severance payments are always the result of negotiations in which the employer “buys out” the employee’s litigation risk.

Our tip: It’s not uncommon for important information and clauses to be hidden between the lines in an employment contract. Our guide provides initial answers to the most important questions about employment contracts. And: Metalworkers can have their employment contracts, termination agreements, and employment references reviewed by experts at IG Metall offices.


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