Germany: Exception to the Strict Written Form Requirement for a Termination of Employment

A termination of employment declared abroad is not necessarily subject to the written form requirement applicable in Germany pursuant to Section 623 of the German Civil Code (Bürgerliches Gesetzbuch – BGB). The decisive factor is the law of the country from which the termination was issued.

Under German law, notices of termination and termination agreements must be in writing, i.e., signed by hand by both parties. This formal requirement is considered a mandatory protective provision to ensure the clarity and provability of termination declarations. A notice of termination or termination agreement that does not comply with this form is generally null and void.

 

Background

The Federal Labour Court recently dealt with an unusual international case: an employer based in the US had terminated the employment relationship of an employee working in Germany. The termination notice was sent from the US without a handwritten signature of a legal representative of the employer as would be required under German law. The employee challenged the termination in court and argued, alongside other points, that the termination was invalid due to a violation of the written form requirement under Section 623 of the German Civil Code.

 

Key Issues

However, the Federal Labour Court clarified that the formal validity of a declaration of intent must be assessed in accordance with Section 11 para. 1 of the German Introductory Act to the Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuche – EGBGB). According to this, a declaration is formally valid if it complies with either the law of the place where it was made or the law of the country in which it takes effect. A letter of termination sent from the US does not require any specific form under US law. The German requirement for written form does not apply in this case.

The plaintiff was therefore unable to invoke the lack of written form. The Federal Labour Court emphasized that although Section 623 of the Civil Code is a mandatory German protective provision, it does not automatically apply as an intervention norm to declarations made from abroad. The decision thus represents an important clarification in international labour law: in cross-border employment relationships, the validity of a termination also depends on conflict-of-law considerations.

The Federal Labour Court further ruled that the termination in question was also not invalid in terms of German termination protection laws. The operational scope of the German Protection Against Unfair Dismissal Act (Kündigungsschutzgesetz – KSchG) did not apply, as the employer did not have a domestic business within the meaning of this Act.

Practical Points

• The ruling makes it clear that the written form requirement under Section 623 of the German Civil Code does not apply worldwide in all cases with a link to Germany, but that for terminations declared from abroad, the formal requirements of the place of declaration may be decisive instead.
• Employers based abroad should nevertheless check whether the termination can be effectively received in Germany and whether it is recognized under German law. It remains the safest approach to terminate the employment relationship of an employee working in Germany through a termination notice with the handwritten signature of a legal representative of the employer. Furthermore, precise provisions on the choice of law and jurisdiction in the employment contract are highly recommended for cross-border employment relationships.