Letters of termination: following the formal requirements
By Sabine Feindura
In Germany, if an employer wishes to terminate an employment relationship with an employee, the first step is to determine whether the Act on Protection against Dismissal is applicable to the case, so the employer must have substantial grounds for the dismissal. Furthermore, in a variety of circumstances, like disability, pregnancy, maternity or parental leave, and works council membership, other laws provide specific protection against dismissal. Employers should seek legal advice if needed. No matter if protection against dismissal is applicable to the case, any notice of termination must comply with a long list of formal requirements stipulated by German law. When writing a termination letter, employers should heed the following recommendations to ensure the termination cannot be challenged on formal grounds:
First of all, the text should clearly state that the employment termination is unilateral on the part of the employer. It should not be possible to construe the wording as a simple offer to conclude a termination agreement or a proposition to negotiate an amicable termination of employment.
Although this has no bearing on the termination’s effectiveness, the employer’s notice letter must by law include a statement containing the following information:
We hereby inform you that upon receipt of this letter, you are obligated to immediately register with your competent labor agency as a person seeking employment. If you fail to notify the agency or your notification is delayed, this may result in a reduction of your unemployment benefits.
Summary dismissal or with due notice
If the termination is summary, with immediate effect, this too must be clearly stated. In a case of this nature, it is advisable to specify that the termination is “extraordinary” and comes into effect upon delivery to the recipient. If due notice is given, an ordinary termination, the applicable notice period must be determined and the end date indicated in the notice letter.
Notice must be given by the actual employer. If the employer is a group company, the notice of termination should not come from another company within the corporate group, for example the holding, by mistake. As a general rule, the company that last paid the employee’s salary and is named on the pay slips is the actual employer.
If the employer is a company, the name of the company must be indicated on the stationery or printed in plain text under the signature. It is also advisable to include the address of the employer or company, and to make sure that court letters sent to this address are reviewed promptly. Foreign employers sometimes lose protection from dismissal proceedings because they are not aware of the summons before the first court hearing.
Signed by hand only
Any notice of termination must be signed by hand by the employer. A notice of termination sent by fax or e-mail may be challenged because it lacks an original signature. A photocopy of a signed termination letter, even if sent by DHL, Fed-Ex or a similar postal carrier, is also void. Even a scanned signature — created with “DocuSign,”for example – makes the termination vulnerable. Only a signature written with pen on paper by the hand of the signatory meets the legal requirements. It is easier to distinguish an original signature if it is written in colored ink.
The identity of the signatory is also very important. If the employer is a company, not every supervisor and manager can legally act as the signatory. It is imperative that the authorized legal representative of the company signs any notice of termination. For companies legally seated in Germany, the letter must be signed by a representative of the company registered in the local Commercial Register (Handelsregister). Some companies are legally represented by two persons jointly – in these cases, both persons must sign the notice of termination.
If the legal representative of the company, the managing director, for example, is not available to sign the notice of termination, it can only be legally signed by another representative if the notice is accompanied by a power of attorney in which the legal representative of the company authorizes the signatory to give notice of termination. However, this power of attorney must also bear the handwritten signature of the company’s legal representative. A copy of a relevant power of attorney will not suffice. A power of attorney of this nature is unnecessary only if the employer informed the employee of the authorization of the signatory in advance of the dismissal. For example, an HR manager who has been working for the company for some time may already have settled matters, for example, hiring with the employee concerned. However, if the HR manager is employed by the parent company, to effectively terminate employment contracts concluded by the subsidiary, he or she must enclose an original power of attorney signed by the hand of the legal representative of the subsidiary alongside the notice of termination.
Signatures under a notice of termination as well as under a power of attorney must identify the signatory. If the signature is illegible, at minimum the surname of the signatory must be printed beneath the signature. It must be possible for the recipient to determine who signed the notice.
In the event of a dispute, the employer must be able to prove that the employee received the notice of termination. It is therefore recommended that the letter be personally handed to the employee or an adult family member of the employee opening his or her door. Preferably, the letter is handed to the employee by or in the presence of a witness, a coworker, for example. It is also legally permissible to deposit the letter in the employee’s correct home mailbox, though this option is not as secure. The deliverer should take photos and write a note upon delivery with the name of the person or persons delivering the letter alongside their signature(s), accompanied by the date, time and place of handover/delivery. The employee is not obligated to sign an acknowledgment of receipt, but the deliverer may request this.
If first-hand delivery is not possible, the notice of termination should be sent by registered mail or by DHL, Fed-Ex or a similar postal carrier. In order to comply with the statutory period of notice, the letter should be delivered to the post office early enough that it can be reasonably expected to arrive within the legal time frame. If the letter is deposited in the employee’s home mailbox after the usual mail delivery time, it is considered to have been received the next day.