Termination for Business Reasons During the Probationary Period

Terminations for business reasons may also be issued during the probationary period. However, under employment law, employers are generally not required to provide a reason for termination during the probationary period. Therefore, termination during this phase can typically occur without a detailed explanation.

However, it is important to distinguish between the probationary period and the waiting period. The waiting period refers to the minimum duration of employment after which general protection against termination applies if the company regularly employs more than 10 employees. This period is independent of the probationary period and is typically 6 months.

In this article, we explain what dismissal for operational reasons during the probationary period entails, whether the employer is required to provide a reason for dismissal during the probationary period at all, and what the difference is between the probationary period and the waiting period.

1. What Does “Probationary Period” Mean?

When an employee is newly hired, the employer usually wants to assess whether the working relationship is going smoothly and whether the employee is performing the duties for which they were hired.

But the employee also has an interest in testing whether the working relationship with the new employer works out. That is why a probationary period is usually agreed upon at the start of a new job. Collective bargaining agreements can also regulate probationary periods and establish their own rules for them. However, a probationary period is not mandatory.

According to Section 622(3) of the German Civil Code (BGB), the probationary period may not exceed 6 months. As of August 1, 2022, the length of the probationary period for a fixed-term position must be proportionate—Section 15(3) of the German Part-Time and Fixed-Term Employment Act (TzBfG). The determining factors here are the nature of the work and the duration of the fixed-term contract. For example, if a position is limited to only 6 months, a 6-month probationary period would likely be disproportionate.

However, the terms of the probationary period have little to do with the issue of protection against termination or the grounds for termination. Section 622(3) of the German Civil Code (BGB) merely stipulates that a two-week notice period applies during the probationary period.

1.1 Waiting Period and Probationary Period

The waiting period is independent of the agreed-upon probationary period. The waiting period is decisive for the applicability of general protection against termination. According to Section 1(1) of the German Employment Protection Act (KSchG), general protection against termination applies if the company regularly employs more than 10 full-time employees and the employee has worked at the company for more than 6 months. The second requirement—employment for more than 6 months—is referred to as the waiting period. The waiting period is not shortened even if no probationary period is agreed upon or if a shorter one is agreed upon.

2. Can an employer terminate employment without cause during the probationary period?

General protection against dismissal safeguards employees from dismissal without cause or justification provided both conditions are met: the company regularly employs more than 10 employees, and the employee has been employed for more than 6 months.

If general protection against termination applies, the employer may only terminate the employment if the termination is socially justified. Social justification for termination exists if the employer’s termination is based on one of three statutory grounds for termination —operational reasons, behavioral reasons, or personal reasons.

2.1 Arbitrary Termination During the Probationary Period

Since the waiting period has not yet been fulfilled during the first 6 months of employment and general protection against termination therefore does not apply, the employer is generally not required to provide a reason for termination. The employer may therefore terminate employment without legal or factual justification, as they are not obligated to provide a reason for the termination.

Even though general protection against termination does not yet apply during the probationary period, terminations must not be entirely arbitrary or lack a minimum degree of social consideration. Thus, in rare individual cases, a termination based solely on replacement—where work is available and there have been no complaints about work performance—may be invalid even during the probationary period.

2.2 Termination that violates the prohibition against disciplinary dismissal under § 612a of the German Civil Code (BGB)

During the probationary period, a termination may also be invalid if it is based solely on the employee’s lawful exercise of his or her rights and is carried out for that reason alone. A typical example here is termination during the probationary period solely because the employee reported an inability to work during that period. In such cases, there must be evidence that the termination occurred solely because a sick leave notice was submitted.

Remarks such as, “Anyone who calls in sick during the probationary period has to go!” or expressions of displeasure regarding the inability to work may suggest such an invalid termination during the probationary period.

2.3 Discriminatory Termination During the Probationary Period

If an employer terminates an employee’s employment during the probationary period on the basis of a discriminatory ground, this termination is also invalid under the General Equal Treatment Act (AGG).

Grounds for discrimination include, for example, an employee’s disability, religious affiliation, age, ethnic origin, sexual identity or orientation, or gender. If there is evidence of discrimination, the employer must, in a wrongful termination lawsuit, prove that the termination was not discriminatory and was not based on such grounds.

3. Can an employer terminate an employee for operational reasons during the probationary period?

There are many reasons why an employer might want to terminate the employment of a newly hired employee who is still in the probationary period. The employee and employer may not be a good fit; the employee may not be performing as expected; the employee’s qualifications may be insufficient; the employee’s conduct may violate the obligations under the employment contract; or other reasons may justify termination by the employer.

However, as long as the employment relationship has not yet lasted 6 months, the employer is not required to have or state a reason for termination. Of course, termination during the probationary period can also be motivated by business-related reasons. This may be the case, for example, if the employee works in production and the order volume is declining. In that case, the employer no longer needs as many staff members and terminates the employment during the probationary period.

Operational reasons may also exist if the department or branch where the employee is working during the probationary period is closed, or if the entire division of the business is shut down or closed. In cases of operational reasons, it is not that the employee has done anything wrong; rather, the employer decides, for example, to close a department or implement changes within the company that result in a reduction in staff.

Other operational reasons may include:

• Modernization and more efficient production methods
• Restructuring and changes in the organizational structure (merging of departments or production sites)
• Shortage of raw materials
• Decline in revenue
• Decline in sales Decline
• in orders
• Loss of third-party funding

In the case of a termination for business reasons outside the probationary period, additional requirements must be met for the employer’s termination to be valid due to the application of general protection against dismissal. However, these requirements do not apply to a termination issued during the probationary period, as general protection against dismissal does not yet apply.

4. Can you be terminated overnight during the probationary period?

Under the law, a two-week notice period applies during the probationary period in accordance with Section 622(3) of the German Civil Code (BGB). This means that the employer cannot terminate the employment relationship overnight. However, collective bargaining agreements may provide for different rules regarding the notice period during the probationary period . For example, the collective bargaining agreement for painters and finishers stipulates a notice period of one business day during the first 2 weeks of employment and 6 business days during the first 6 months.

If the employer has good cause for extraordinary termination pursuant to § 626 BGB, the employer may terminate the employment relationship without notice, and it ends with immediate effect. In such a case, however, the employer must be able to provide a reason for termination even during the probationary period. This reason must also be communicated to the employee upon request pursuant to § 626(2), sentence 3 of the German Civil Code (BGB).

However, business-related reasons justify extraordinary termination only in very rare cases. In the event of termination without notice, it should be examined whether a claim for protection against wrongful termination is possible.

5. When is a termination during the probationary period invalid?

In addition to general protection against termination, there is also special protection against termination. For employees who are particularly deserving of social protection, the thresholds for termination are especially high. This applies, for example, to employees with a severe disability, pregnant employees, or employees serving on the works council or staff council.

However, even special protection against termination applies only to a limited extent during the probationary period. For example, an employee can be elected to the works council only after 6 months of employment ( Section 8(1), Sentence 1, BetrVG), and the special protection against termination for employees with a severe disability also applies only after 6 months of employment at the company ( Section 173(1)(1), SGB IX).

However, the special protection against termination for pregnant employees applies from the first day of employment and prohibits termination during pregnancy, even during the probationary period. The employer may only terminate the employment if they have first obtained official approval from the competent authority—in Berlin, the State Office for Occupational Safety, Health Protection, and Technical Safety ( LAGetSi).

6. Can you challenge a termination during the probationary period?

If a termination by the employer during the probationary period is invalid, employees can file a claim for protection against wrongful termination with the labor court. This claim must be filed within three weeks of receiving the notice of termination. Even during the probationary period, employees can take action against an invalid termination.

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