Germany’s 34-Point Labour Overhaul: High Earners Can Buy Their Way Out, but Severely Disabled Workers Keep Full Shield
04.07.2026 - 04:33:35 | boerse-global.de
Even as Berlin moves to let companies more easily sever ties with their highest-paid employees from 2027, Germany’s famously robust safeguards for workers with severe disabilities remain untouched – and a recent appeals court ruling shows how easily employers can stumble over procedural hurdles.
The coalition government unveiled a comprehensive 34-point programme on 2 July, including a change that for the first time loosens dismissal protection for a specific income bracket. Starting 1 January 2027, employees earning more than roughly €177,500 a year can have their contracts dissolved against severance pay under simplified legal conditions. The special protection for disabled and equivalent workers is expressly excluded from this relaxation.
The Shield That Stays: State Veto on Every Dismissal
For severely disabled employees – defined as those with a degree of disability (Grad der Behinderung, GdB) of at least 50 – any termination by the employer requires prior approval from the Integrationsamt (Integration Office). Without its explicit consent, a dismissal is legally void, whether ordinary or summary.
If an employer opts for an extraordinary dismissal, the application must be filed with the Integration Office within two weeks of learning the relevant facts. The authority itself also has two weeks to decide; if it misses that deadline, consent is deemed granted. Alongside this process, the company’s disabled workers’ representative must be consulted.
BEM: Where Many Good?Faith Efforts Fail
Beyond formal procedures, courts are tightening preventive obligations. The Cologne Regional Labour Court (Landesarbeitsgericht Köln) ruled on 23 October 2025 that employers cannot rely solely on a worker’s formal refusal to participate in a Betriebliches Eingliederungsmanagement (BEM – workplace reintegration management) when justifying a sickness?related dismissal – especially if contradictory signals, such as a request for an initial meeting, have been given. In such cases, the employer must clarify the situation. A flawed or omitted BEM typically renders a sickness?related dismissal unenforceable in court.
Limits to the Safety Net
Despite the broad protection, there are boundaries. The special dismissal shield only kicks in after a six?month waiting period – meaning employers can terminate without Integration Office consent during the first six months, often coinciding with probation.
In a separate ruling on 25 June 2026, the Federal Labour Court (Bundesarbeitsgericht) clarified that errors in a mass?dismissal notice do not automatically invalidate the resulting terminations, as long as the information function for the authorities is preserved. However, the court added that this does not relieve employers of their duty of care toward protected groups.
Other Reforms Coming in 2027
The 34?point package includes several additional changes:
- Fixed?term contracts: Without a specific reason, contracts can now run up to 48 months with a maximum of six renewals, and the requirement for written form disappears on 1 January 2027. This option is available until the end of 2030.
- Sick notes: Telephone?based sick?note issuance (telefonische Krankschreibung) is abolished. Employers may demand a doctor’s certificate from the first day of incapacity.
- Payroll costs: The flat?tax rate for mini?jobs rises from 2% to 5%. Tax?free supplements for Sunday and public?holiday work are extended to cover an hourly wage of up to €75.
Although the reform package aims to inject flexibility into the labour market, legal experts stress that the rights of severely disabled people remain a high hurdle for employers, thanks to the active role of the Integration Offices and the courts’ strict interpretation of procedural requirements.
