Employment Contract Termination Guide 2025: Rights and Obligations

Are you facing the challenge of carrying out a legally compliant employment contract termination? Many people are unsure which steps are really necessary to avoid mistakes and legal pitfalls.

Especially when terminating an employment relationship, there are numerous rights, obligations, and current legal regulations that must be observed – particularly in 2025.

Our comprehensive guide supports you in bringing order to the termination process, avoiding typical mistakes, and strengthening your position as an employee or employer.

In this article, you will receive practical tips on types of termination, deadlines, formal requirements, special cases, common mistakes, and the most important changes for 2025. Read on and secure a legally sound overview for your next decision.

Overview: Types of Termination and Legal Foundations

The employment contract termination is a topic that regularly concerns both employees and employers. Anyone who wants to terminate an employment contract must comply with numerous legal requirements to avoid mistakes and later disputes.

A close look at the different types of termination, the legal and contractual regulations, as well as important special cases, creates security and ensures that all parties involved know their rights and obligations.

Ordinary and Extraordinary Termination

In the case of employment contract termination, the law distinguishes between ordinary and extraordinary termination. Ordinary termination takes place while adhering to a contractually or legally stipulated deadline. Extraordinary termination, on the other hand, is without notice and requires an important reason, such as theft or gross breaches of duty.

Legal foundations:

• § 622 BGB: Regulates the ordinary periods of notice.
• § 626 BGB: Describes the requirements for extraordinary termination.

Examples of reasons for extraordinary termination:

• Theft of company property
• Physical attacks
• Massive refusal to work

According to Allianz and TimO Redaktion, over 80% of all terminations are ordinary. In the case of fixed-term employment contracts, termination is usually only possible if this has been expressly agreed. During the probationary period, shortened deadlines often apply (usually two weeks).

Type of termination	Deadline required	Typical reasons
Ordinary	Yes	Operational changes, personal reasons
Extraordinary	No (without notice)	Criminal offences, gross breach of duty

Who is Allowed to Terminate? Employer vs. Employee

An employment contract termination can be issued by both the employer and the employee. Both sides have different rights and obligations to observe.

Employer:

• Must often involve the works council.
• In the event of termination, the employer must state the reason for extraordinary terminations.

Employee:

• Can usually terminate without giving reasons.
• Typical mistakes: Incorrect deadline or formal defects.

Practical example: An employee submits her termination by email – however, this is ineffective because it is not in writing.

Statistically, around 60% of all terminations are issued by employees (TimO).

Sources of error:

• Missing co-determination of the works council in the event of employer termination.
• Incorrect calculation of the notice period.
• Incomplete information in the letter of termination.

Legal and Contractual Regulations

The following principle applies to employment contract termination: Legal regulations take precedence, but deviating conditions can be stipulated in the employment contract or collective agreement. Collective agreements and company agreements play a major role here.

Checklist for contract review:

• Which periods of notice are mentioned in the contract?
• Are there special regulations or extended deadlines?
• Are collective or company agreements to be observed?

The employment contract must be carefully checked before each termination. In many industries, stricter or more relaxed deadlines apply, depending on the collective agreement. According to statistics, collective agreements are relevant in around 50% of German employment relationships.

Anyone who is unsure will find a helpful summary of legal and contractual periods of notice as well as the most important rights and obligations in the overview of Periods of notice in labor law.

Special Cases: Probationary Period, Fixed-Term Contracts, Maternity Protection

Special regulations must be observed for employment contract termination in certain situations, for example during the probationary period, for fixed-term employment contracts or during maternity protection.

Probationary period:

• Notice period usually two weeks (§ 622 BGB).
• Easier termination, but still required in writing.

Fixed-term contracts:

• Termination usually only possible if expressly agreed.
• Otherwise, the contract ends automatically when the deadline expires.

Protection against dismissal:

• Pregnant women, people on parental leave and severely disabled people enjoy special protection.
• Termination during parental leave is only possible with the consent of the responsible authority.

In 2025, current judgments and changes in the law will bring additional clarifications, especially regarding maternity protection and fixed-term contracts. Anyone affected should always stay up to date and seek legal advice if in doubt.

Step-by-step: Terminating an Employment Contract – Procedure & Formalities

The employment contract termination is a process that should be carried out with care and precision to ensure legal certainty. Below you will find a practical step-by-step guide to help you avoid mistakes and correctly fulfill all relevant formalities.

Step 1: Check Employment Contract and Periods of Notice

Before submitting the employment contract termination, it is crucial to carefully check the applicable periods of notice. Legal deadlines according to § 622 BGB are usually four weeks to the 15th or the end of the month. During the probationary period, a shortened period of two weeks often applies. In the case of fixed-term contracts, termination is usually only possible if this has been expressly agreed.

In addition to the law, also check the contractual regulations, collective agreements or company agreements. A checklist helps:

• Check the contract for special clauses
• View collective agreement or company agreement
• Calculate the deadline with start and end date

Example: If the deadline begins on May 3, the employment relationship ends four weeks later, i.e. on May 31. Many mistakes are made because special regulations are overlooked. Statistics show that 30% of employment contract termination are made with too short a deadline.

Step 2: Observe Formal Requirements and Mandatory Information

The employment contract termination must always be in writing – an email or fax is legally ineffective. According to § 623 BGB, a handwritten signature is required. The following information must not be missing in the letter of termination:

• Full name and address of the employer/employee
• Termination date and time of termination
• Handwritten signature

Formal errors, such as a missing signature or incorrect addressing, can render the employment contract termination ineffective. If possible, use a sample termination to avoid mistakes. Anyone who wants to be completely sure will find valuable tips on the legally compliant termination of employment relationships under How to terminate contracts correctly.

Step 3: Deliver the Termination Correctly

The type of delivery plays a central role for the employment contract termination. The notice period only begins to run when the recipient receives it. You can hand over the termination in person, send it by registered mail with return receipt or use a messenger.

Important points:

• Document receipt of termination
• Keep deadlines in mind during vacation or absence
• If in doubt, record refusal to accept

Practical example: If the employment contract termination is delivered during vacation, it is considered received as soon as it is in the mailbox. According to Allianz, 15% of terminations are delivered too late – which can have legal consequences.

Step 4: Reaction to the Termination – Confirmation, Employment Certificate, Return of Work Equipment

After receipt of the employment contract termination, a written confirmation by the recipient is recommended. Employees are entitled to a simple or qualified certificate. Request this as early as possible.

To note:

• Return of company property (e.g. laptop, keys)
• Clarification of remaining vacation and overtime
• Timely processing of all outstanding claims

Sample text for certificate request:

Hiermit bitte ich um Ausstellung eines qualifizierten Arbeitszeugnisses zum Beendigungszeitpunkt meines Arbeitsverhältnisses.

According to TimO, 90% of employees request a certificate after employment contract termination.

Step 5: Avoid Special Cases and Pitfalls

Special rules apply to employment contract termination during illness, parental leave or maternity protection. Employees should contact the employment agency in good time to avoid a waiting period for unemployment benefits. In some cases, a termination agreement is more sensible than a termination.

Typical pitfalls:

• Failure to register with the employment agency
• Termination without notice without an important reason
• Lack of knowledge of current case law for 2025

Make sure to check all the special features of the individual case to avoid legal risks and to make the employment contract termination effective.

Rights and Obligations after Resignation

After the employment contract termination, employees and employers face new challenges and obligations. It is crucial to know your rights and fulfill your obligations to avoid conflicts and assert claims.

Rights of the Employee

After an employment contract termination, employees retain various rights. Until the end of the employment relationship, there is a claim to the full wage, even if the exemption is granted. Remaining vacation must be granted or financially compensated. According to TimO, 85% of employees use this vacation compensation.

A central right is the right to an employment certificate. This can be simple or qualified and should be formulated in a benevolent manner. There is also a claim to an employment certificate for the employment agency to secure later benefits.

In practice, it is advisable to demand your own claims in writing and to observe deadlines. Anyone who is unsure will find professional support at Find labor law advice. This is the best way to secure your rights after an employment contract termination.

Obligations of the Employee

Even after an employment contract termination, employees must fulfill their work obligations until the last day. This includes the careful completion of all tasks as well as support in the handover to colleagues or successors.

Company property such as laptops, keys or confidential documents must be returned no later than the last working day. The obligation to maintain confidentiality often applies beyond the employment relationship and protects sensitive company data.

Anyone who violates these obligations risks warnings or claims for damages. Correct behavior after an employment contract termination also facilitates references and the search for a new job.

Rights and Obligations of the Employer

After an employment contract termination, the employer is obliged to pay all outstanding salaries, any severance payments and vacation compensation on time. In addition, there is the issuance of qualified or simple certificates as well as the employment certificate.

Data protection must also be guaranteed after the end of the employment relationship. Personnel files must be kept safe or properly destroyed. Employers also have reporting obligations to social security institutions and authorities.

Delays in issuing the certificate or payment often lead to legal disputes. Employers who correctly implement the employment contract termination protect themselves from lawsuits and secure the company’s image.

Effects on Social Security and Unemployment Benefits

With the employment contract termination, the notification to social security also ends. The employer reports the resignation to the health insurance and pension fund. It is important for employees to register with the employment agency no later than three days after receiving the termination. According to Allianz, around 20% of those affected fail to do so, which can lead to waiting periods.

Especially in the case of self-termination, there is a threat of a waiting period for unemployment benefits of up to twelve weeks. This is usually not the case with termination for operational reasons. All relevant documents such as the employment certificate and the employment certificate should be submitted immediately.

A timely clarification of the claims after an employment contract termination helps to avoid financial disadvantages and to make the transition to the next employment smooth.

Typical Mistakes and how to Avoid Them

Have you ever wondered why so many terminations are ineffective? Mistakes in employment contract termination happen more often than many think. A small formal error or an incorrectly calculated deadline can have serious consequences. In this section, you will learn which typical pitfalls there are, how to avoid legal risks and what you should pay attention to in order to carry out your employment contract termination safely and correctly.

Common Mistakes in Resignation

The most common mistakes in employment contract termination include incorrectly calculated deadlines and formal errors. Many overlook special clauses in the employment contract or collective agreement that make stricter requirements. It is particularly critical if the termination is not in writing or the handwritten signature is missing.

Here is an overview of typical mistakes:

Type of error	Example	Consequence
Deadline incorrectly calculated	Termination pronounced too early/too late	Invalidity
Formal error	No signature, incorrect delivery	Contestability
Special regulation overlooked	Deviating deadlines ignored in the contract	Extended commitment
Access not documented	Termination not verifiably delivered	Dispute over effectiveness

In practice, according to TimO, every fourth employment contract termination leads to formal errors. Always document how and when the termination was delivered.

Legal Risks and Possibilities of Appeal

Formal errors or missing justifications can have far-reaching consequences. If an employment contract termination is not delivered correctly, the employee can file a lawsuit for protection against dismissal within three weeks.

The greatest risks include:

• Contestation of the termination due to formal defects
• Court proceedings with costs and time expenditure
• Subsequent obligation to continue employment

A current court ruling shows that even small formal errors can lead to ineffectiveness. Anyone who is unsure should consult current judgments and comments on the topic of Current case law on termination to stay up to date.

Tips for a Legally Compliant Termination

To ensure that your employment contract termination does not fail due to formal hurdles, careful preparation helps. It is best to use a checklist to secure all steps:

• Check deadlines and special regulations in the contract
• Use sample terminations and templates
• Document the delivery (e.g. registered mail)
• Seek legal advice early on
• Pay attention to current legal changes and judgments

According to TimO, 70% of employees use templates for employment contract termination to avoid mistakes. Anyone who documents all steps and pays attention to diligence minimizes the risk of an appeal and secures their rights.

Current Changes and Case Law 2025

The termination of employment contracts remains a sensitive topic in 2025, as new laws and judgments bring fresh momentum to labor law. Anyone dealing with the termination of employment contracts should be aware of the latest developments to avoid legal pitfalls. Below you will find an overview of the most important legal innovations, practical judgments, and expert recommendations for a legally sound termination of employment contracts.

Legal Innovations in 2025

The year 2025 brings important legal changes regarding the termination of employment contracts. Particularly relevant are new regulations on notice periods: For certain professional groups, the periods are adjusted to create more planning security. There are also changes to protection against dismissal, for example for severely disabled employees and parents on parental leave.

Digitization continues to advance, but the electronic termination of employment contracts remains inadmissible. Written form and a handwritten signature are mandatory. Companies must also observe new documentation obligations to ensure transparency in the termination process.

A recent statistic shows that around 60% of companies are already prepared for the new requirements. Comprehensive information on the labor law changes in 2025 can be found in the article on labor law changes in 2025. Stay informed so that your termination of employment contract remains legally compliant in 2025.

Important Judgments and Their Effects

Current judgments have a direct impact on the termination of employment contracts. In particular, the issue of receipt of the termination notice was again specified by the Federal Labor Court in 2025: Terminations are only considered to have been received if they have been handed over to the employee personally or to the correct address. Absence, for example due to vacation, postpones the start of the period – employers must take this into account when terminating employment contracts.

The necessity of a detailed justification was also emphasized again in the case of extraordinary terminations. If this is missing, the termination of employment contract may fail in court. Complete documentation is particularly crucial in the case of termination without notice.

Anyone who wants to find out about current judgments and their practical significance will find practical case studies in the article on protection against dismissal and current case law. Therefore, check regularly whether your termination of employment contract meets the current standards.

Expert Tips and Recommendations for Action

For a legally sound termination of employment contract in 2025, labor law experts recommend implementing the new deadlines and protection regulations in the company at an early stage. Use checklists to meet all requirements:

• Check the currently applicable notice periods.
• Note new documentation obligations.
• Strictly adhere to the written form.
• Inform yourself regularly about current judgments.
• Consult a specialist lawyer if you are unsure.

Good preparation protects against expensive mistakes and lengthy legal disputes. Use sample terminations and templates to make the termination of employment contract efficient and legally compliant. Stay on the ball – this is the only way to prevent pitfalls and optimally protect yourself and your company.

FAQ: the most Frequently Asked Questions about the Termination of Employment Contracts

Do you have questions about the termination of employment contracts? Here you will find answers to the most important topics that concern employees and employers in 2025. Use this overview to avoid uncertainties and make your own process legally compliant.

What Deadlines Apply to Employees and Employers?

The statutory notice period is usually four weeks to the 15th or the end of the month. However, longer or shorter periods can be agreed in the employment contract or collective agreement. During the probationary period, a period of two weeks usually applies. Before each termination of employment contract, be sure to check all contractual regulations to avoid missing any deadlines.

How Must a Termination be Served?

The termination of an employment contract must be in writing. It can be handed over in person or sent by registered mail with return receipt. The date of receipt is decisive for the effectiveness of the termination of employment contract. Email or fax are not legally sufficient!

What to Do in the Event of Termination During Illness or Parental Leave?

During an illness, there is generally protection against dismissal, but not always a ban on dismissal. During parental leave, terminations are only permitted in exceptional cases. Those affected should definitely seek advice in such situations when terminating employment contracts. Our Guide to Swiss Labor Law can help with complex cases.

Is there a Claim to Severance Pay?

A statutory claim to severance pay only exists in exceptional cases, such as in the case of operational redundancies with a social plan. Severance payments are often agreed as part of a termination agreement. If you are unsure about the termination of employment contract, it is best to seek individual advice. Tips on how to find a lawyer can be found in the Guide to Finding a Lawyer for Termination.

What should be Considered in the Job Reference?

After a termination of employment contract, you are entitled to a simple or qualified job reference. The reference should be formulated in a benevolent and truthful manner. Request it in good time and check whether all activities are listed correctly.

Can I Withdraw a Termination?

A termination of employment contract that has already been issued can only be withdrawn with the consent of the other party. Speak to your employer or employee as early as possible if you would like to reverse your decision.

What Happens to Remaining Vacation and Overtime?

After the termination of employment contract, remaining vacation must be taken as far as possible during the current employment relationship. If this is not possible, a payment will be made. Overtime is also compensated or paid out – check the regulations in the employment contract.

How Do I Avoid a Suspension of Unemployment Benefits?

Register with the employment agency within three days of receiving the termination of employment contract. A suspension period threatens if you resign yourself. If in doubt, seek advice early on to avoid financial disadvantages.

You can see how many details and pitfalls there are when terminating an employment contract – especially with the new regulations in 2025. Regardless of whether you are an employee or an employer: It is worth having your personal situation checked carefully and proceeding in a legally sound manner. Take the opportunity to talk to a specialized lawyer, clarify your questions and avoid mistakes before it becomes expensive or costs you nerves. Via GETYOURLAWYER you will receive non-binding offers from experienced specialists – simple, digital and transparent. Start your Start request now and play it safe!