Germany: The Two-week Notice Period also Applies if the Employee is on Vacation

Termination for cause is one of the most severe measures under German labor law. It requires the existence of facts that make it unreasonable for the employer to continue the employment relationship, even until the end of the regular notice period. At the same time, it is subject to strict formal requirements. Of particular importance is the two-week notice period specified in Section 626 para. 2 of the German Civil Code: The employer must give notice of termination within two weeks of becoming aware of the relevant facts. While the employer may initially conduct an investigation and hear the employee’s side of the story to clarify the facts, these measures must be carried out with due urgency.

Against this background, the Federal Labor Court has clarified that there is no general prohibition on contact during an employee’s vacation. Employers may and must take investigative and hearing measures even during vacation-related absences, provided this is reasonable under the circumstances. If no attempts to clarify the facts are made for weeks on end, this may result in the deadline for extraordinary termination expiring.

 

Background

The proceedings concerned the case of a train conductor who, under the collective bargaining agreement, could not be terminated for ordinary reasons and against whom allegations of sexual harassment had been made. The employer became aware of this at the end of April 2023. At that time, the employee was initially on leave of absence and subsequently on vacation until May 21, 2023. It was only after his return that he was confronted with the allegations and heard. Following the conclusion of the internal investigation, the employer issued an extraordinary termination without notice in early June 2023, as well as, alternatively, an extraordinary termination with a notice period.

The employee filed an action for unfair dismissal, arguing that the two-week notice period under Section 626 para. 2 of the German Civil Code had not been observed. The employer countered that there was no obligation to contact the employee during his vacation, as doing so would otherwise interfere with the purpose of rest and recuperation. The Federal Labor Court did not agree with this view. Neither the German Federal Vacation Act (Bundesurlaubsgesetz – BUrlG) nor EU law established a general prohibition on contact during vacation. Rather, the interests of the employer in a prompt clarification of the facts must be weighed against the interests of the employee on a case-by-case basis.

 

Key Issues

In the opinion of the Federal Labor Court, the employer had not conducted the investigation with the necessary promptness. Although the employer had been aware of the allegations as early as April 27, 2023, no contact was made with the employee until May 22, 2023. Various means of communication – such as by telephone, email, or mail – would have been readily available. There were no special circumstances that would have justified waiting several weeks. Consequently, the notice period had already expired by the time the terminations were issued.

The decision also makes it clear that employers must carefully balance a thorough investigation with compliance with the short statute of limitations when terminating employment based on suspicion or actual misconduct. While investigations may be conducted, they must not be unnecessarily prolonged. Vacation or sick leave does not automatically preclude contact. The specific circumstances of the individual case and the reasonableness of the respective measures always remain decisive.

Practical Point

• In cases where extraordinary termination may be considered, employers should document at an early stage when they became aware of facts relevant to termination and what investigative measures were taken.
• The decision makes it clear that vacation periods do not automatically “suspend” the two-week notice period under Section 626 para. 2 of the German Civil Code. Inaction can result in the expiration of the notice period.
• Contacting an employee during vacation is generally permissible, provided it is proportionate and does not place an unreasonable burden on the employee.
• Investigations and hearings should be conducted with due urgency; longer delays require specific, objective justification. In cases of extraordinary termination, care must also be taken to ensure a proper works council hearing, as errors in the consultation process can further render the termination vulnerable to challenge.