Germany’s SPD Opens Door to Dismissal Protection Relief for Top Earners as Coalition Talks Heat Up
27.06.2026 - 13:14:36 | boerse-global.de
The Social Democratic Party (SPD) signalled a significant shift in German labour law on 26 June 2026, indicating it could support a temporary relaxation of dismissal protection for high-income employees. The proposal targets workers earning above the contribution assessment ceiling of 101,400 euros – and would apply for just four years. In return, the centre-right Union parties have floated the idea of a “flexibility premium” for affected staff.
The coalition committee is scheduled to debate the trade-off on 1 July 2026, marking the first serious attempt by the current government to alter one of Germany’s most cherished worker safeguards since taking office.
Works council founders face strict formalities
While the political debate focuses on top earners, the legal hurdles for rank-and-file employees trying to establish a works council remain unchanged. Under Section 15(3b) of the Dismissal Protection Act, anyone who initiates the creation of a works council enjoys special protection against dismissal – but only if they submit a formally correct declaration of intent that has been notarised. Without that notarial certification, the protection lapses. The requirement, designed to ensure the seriousness of the initiative, has become a common pitfall for activists.
Fraport election challenged over voting irregularities
At Frankfurt Airport operator Fraport, tensions between workforce and management flared again on 25 June 2026, when a complaint was lodged against the most recent works council election. The plaintiff, Hakan Cicek, alleged irregularities including freely accessible postal ballot papers and destroyed voting slips. The election was already under a cloud: a previous vote had been blocked by a court in 2025.
Mass dismissals: BAG draws a firm line
The Federal Labour Court (BAG) issued two rulings that clarify the boundaries of procedural compliance. On 1 April 2026, the court confirmed that if a mass-dismissal notice is missing or the required consultation procedure has not been completed, any subsequent layoffs are null and void. The defect cannot be cured by retroactive action.
However, a second ruling on 25 June 2026 showed that minor formal errors do not necessarily break a dismissal. In a case where 34 redundancies were announced but only 31 to 32 were actually carried out, the court found the dismissals valid because the overall purpose of the notification procedure was not compromised.
Swiss compromise on staff representation
Across the border, Switzerland’s employer federation signalled flexibility on 25 June 2026. Director Roland Müller said the organisation could accept strengthened dismissal protection for staff representation bodies – provided it imposes no additional financial or administrative burden on companies. A final decision is expected during the autumn session of the Council of States (Ständerat).
Volkswagen: resistance to 100,000-job reduction plan
Conflict escalated at Volkswagen, where plans envision the elimination of up to 100,000 positions and potential plant closures. Both IG Metall and the company’s works council rejected the proposals on 26 June 2026. The supervisory board is due to discuss the matter on 9 July 2026.
Mercedes-Benz delays bonus payments amid profit slump
At Mercedes-Benz, the general works council criticised management’s decision to postpone contractual special payments originally scheduled for July 2026 to 2027. The company, facing a sharp drop in earnings, has simultaneously called on staff to deliver higher output while maintaining current pay levels – a demand that has deepened worker distrust.
