Termination for personal reasons

Termination for personal reasons / Personenbedingte Kündigung

November 03, 2023

Within the scope of application of section 1 Dismissal Protection Act (KSchG), a dismissal may be justified as a dismissal for personal reasons. A dismissals by the employer is possible for reasons that lie in the person of the employee, for reasons that lie in the conduct of the employee and dismissals for operational reasons. Termination for personal reasons means that the employee is no longer able to perform in accordance with the contract. Dismissal for personal reasons is only possible under certain conditions.

Contractual disruption

First of all, there must be a so-called "breach of contract". This means that the employee can no longer fulfil his/her contractual duties. This breach of contract must be based on the employee's personal abilities, characteristics or attitudes that cannot be blamed. This is a matter of "not being able" to provide the service and not a "not wanting" to provide it. This means that it must not be possible for the employee to eliminate the breach of contract through volitional behaviour - in this respect it is a breach of contract without fault. This does not mean, however, that the reason for the breach of contract itself must be without fault - the circumstances that cause the employee's inability to perform "may" very well be the fault of the employee.

Negative forecast

Furthermore, a so-called negative prognosis must be made: The breach of contract must be expected to continue at least until the expiry of the notice period.

Significant impairment of operational or economic interests

In addition, an impairment of the operational or economic interests of the employer due to the "inability" of the employee is required.

An interference of operational interests can, for example, be a disruption of the operational process due to the training of replacement workers or a production standstill.

An economic impairment exists if the breach of contract leads to economic burdens for the employer. This is the case, for example, if the employee is always absent from work and additional expenses for substitutes are to be expected.

Lack of opportunity for continued employment

In the case of dismissal for personal reasons, it must also be asked whether the employee to be dismissed can continue to work. It must not be possible for the employer to continue an occupation of the employee in another vacant job where the lack of aptitude is not or only insignificantly important.

First of all, another job must be available. Furthermore, this job must be comparable to the employee's previous job. Comparable jobs are those to which the employee can be transferred by means of the right of direction (section 106 German Trade Regulations Act (GewO). If the transfer of the employee to the vacant job is not covered by the employer's right of direction, a dismissal with notice of change may be considered as a less severe means of termination. The employer must also try to qualify the employee for other vacant jobs through reasonable retraining or further training measures before resorting to the "ultima ratio" of dismissal.

Weighing up interests

The Federal Labour Court (Bundesarbeitsgericht, BAG) also demands a balancing of the mutual contractual interests if the employment relationship is disturbed without the employee having acted in a reproachable manner. In particular, it must be taken into account whether the lack of suitability is due to an industrial accident or an occupational disease. The length of service shall also be taken into account. On the employer's side, the quality of the impairment or strain is to be taken into account.

Dismissal due to illness as a subcategory of dismissal due to personal reasons

The most important case of dismissal for personal reasons is illness of the employee.

Negative health prognosis

A negative health prognosis is first required for a dismissal of the employee due to his illness. A distinction must be made between frequent short-term illnesses and long-term illnesses.

Frequent short-term illnesses

In the case of a dismissal based on frequent short illnesses, objective facts must exist at the time of receipt of the dismissal which justify the concern of further illnesses to the same extent as before. In this context, past frequent short illnesses may speak for a corresponding appearance in the future. If several short illnesses occur annually during a period of three to five years, these speak for a corresponding future appearance.

Long-term illnesses

In the case of a dismissal based on a long-term illness, it is necessary that the employee is actually ill at the time of receipt of the dismissal and it must be expected that the illness will continue for a longer period of time.

Significant impairment of operational interests

Furthermore, as already mentioned, there must be considerable impairment of operational interests due to the illness. Here, too, a distinction must be made between frequent short illnesses and long-term illness.

In the case of frequent short-term illnesses, an impairment of the company's interests must be assumed at least if continued payment of remuneration costs exceeding six weeks within one year are to be expected in the future. According to section 3 (1) sentence 2 Continued Remuneration Act (EFZG), the employer may be obliged to continue to pay remuneration for a period exceeding six weeks, if either the absences are due to different causes of illness or if there were at least six months between the (same) illnesses.

However, this is different in the case of long-term illness. Since in this case the employer is not obliged to continue to pay remuneration for a period exceeding six weeks, the impairment of the employer's interests regularly lies in the fact that the employer cannot foresee when the employee will return to work.

Weighing up interests

When weighing up the interests in the context of a dismissal due to illness of the employee, the costs of continued remuneration, which must be "extraordinarily" or "extremely" high in order to make the continued employment of the employee unreasonable, are to be taken into account in particular. However, the BAG has so far failed to provide a specific order of magnitude. The circumstances that led to the illness must also be taken into account. Particularly unhealthy working environment with a lot of noise, dust and heat is to be considered in favour of the employee. A so-called "group comparison" with the average absenteeism rate of comparable employees is also required. If the default rate in this comparison group is also relatively high, only much higher default rates of the employee to be dismissed can justify the dismissal. Furthermore, it must be taken into account whether the employee himself/herself is responsible for the reasons that led to the breach of contract.